Seeking Support on Evergreen Redevelopment Concept, Developer Instead Gets an Argument at Council

It was a simple enough letter, aptly described by Mayor Pro Tem Jessy Gregg as a “string of enthusiastic adjectives,” tucked away on the consent agenda for City Council’s Jan. 11 meeting. 

The purpose and intent of the letter — to signal enthusiasm from East Lansing’s Downtown Development Authority and City Council for redevelopment of the DDA’s Evergreen Properties by River Caddis Development — had not been an issue when the DDA voted to approve the letter in December.

But instead of a unanimous Council vote to allow Mayor Ron Bacon to sign the letter on the behalf of City Council, the issue was pulled from the consent agenda by Council member George Brookover and subjected to scrutiny. 

The resulting debate led to a 3-2 vote in favor of approving Bacon to sign — but not before Brookover and Council member Lisa Babcock laid out their reservations, countered by Gregg’s agitated attempt to, in her words, “cheerlead” for a potential project. 

Babcock and Brookover were the two “no” votes on the letter.

The two and only attorneys on Council, Brookover and Babcock argued that the City Council should not be attaching themselves to River Caddis’s “project” given that it is entirely theoretical at this point. They argued that signing off on the letter could create the appearance that the City has (or will) approve the project shown in a prospectus included with the agenda item when nothing has come to the City for any formal review, no less approval.

Gregg responded and said she did not think signing off on the letter will create an impression that the City intends for the exact project outlined in the prospectus to be built. She also seemed to take Brookover and Babcock’s reservations about signing off on the letter as the two of them not caring about East Lansing’s economic recovery amid the Covid-19 pandemic. 

Bacon, a voting member of the DDA by virtue of his position as Mayor, had already voted to approve the letter once at the DDA, and did so again on Tuesday at Council. In his comments during the debate, he recognized Brookover’s and Babcock’s concerns, but spoke mostly to the way Covid-19 wholly disrupted original plans for the project and said he thought the City should stand by these developers now.

So how did a seemingly innocuous letter become a flashpoint at the first City Council meeting of 2022? It helps to start with the letter’s origins.

At the DDA’s meeting in December, John McGraw of River Caddis Development, the firm which currently has a Memorandum of Understanding (MOU) with the City giving them the exclusive right to propose redevelopment of the Evergreen Properties, presented the next steps for the properties. Since the original plans for River Caddis to build a large office building on the properties fell through when an anchor tenant pulled out due to the pandemic, the entire project has been in a holding pattern. 

That hasn’t stopped the DDA from continuing to renew the exclusive deal with River Caddis, with the stalled concept now going on two years. The idea is still for office space to be built — and the concept still has the same “CITADEL” moniker — but the project will now “morph” to reflect what a potential anchor tenant needs and wants, McGraw told the DDA in December. 

To help attract a new anchor tenant to get this office space built, in December 2021, the DDA voted to approve this letter, signed by the “Mayor and DDA Chair.” When it came to City Council on Tuesday, the letter was presented alongside marketing materials produced by Friedman Real Estate advertising leasable “premier office space” over an artist’s rendering of the originally-proposed CITADEL from February 2020. 

The seeming connection of the letter to these marketing materials — and the possibility that someone would conclude that the building the rendering shows is being built — troubled Babcock and Brookover.

At Council on Tuesday, there was an intense split over whether it was a good idea to sign off on the letter.

“This makes me very nervous,” Brookover said. “If y’all want to go ahead and do this, go ahead and do it. I don’t want to spend a whole lot of time. But it just seems to me, the letter essentially, to me, is a truism. I think it is obvious based on everything — and I’m not speaking for the DDA, the DDA has a separate jurisdictional issue here — but it’s obvious from everything the DDA has done in the last five or seven years that it’s interested in marketing this property. The City has done nothing to inhibit that or to send any message to anybody that it doesn’t welcome any and all developers to propose things downtown.” 

Brookover continued: “On the other hand, as far as I know, based on the history of this thing, this proposal from River Caddis has not been vetted by the Planning Commission, has not gone through any of our processes in terms of approval or disapproval. So, the reality is, it’s already the case that, yeah, we all want somebody to come downtown, and they can quote what I’m saying right now. But I just don’t see why we need a letter and I guess an additional — just from a principle standpoint, it just really makes me nervous to have government start inserting itself in what I refer to as ‘the market.’”

Brookover added that he doesn’t think it’s smart for the City Council to be involved in marketing a project when they’ll be the ones ultimately approving site plans and the like.

Bacon responded, agreeing with Brookover on the issues of Council inserting itself in the market, but posited that this situation was also specifically about helping the developers weather the pandemic — something no one was prepared for.

“I think the world changed under their feet,” Bacon said. “Having sat in several of the meetings, obviously they had some good ideas and some good buy-in from the market, but I think all that has evaporated under the pressure of Covid and over the last two years. And frankly I think we’re back, in a way, at square one on some of this, just looking at what the market is going to bear moving forward. I don’t have a strong opinion either way on it, if Council chooses to support it or not. But I do think this has gotten a lot more challenging post-Covid than it was prior to.”

Babcock then chimed in, agreeing with Brookover.

“This looks like we have approved a building that looks like this, that takes up this much of the lot, that has a certain configuration on the inside — this looks like we’ve given it our approval when nothing of the sort has happened,” Babcock said. “And on the one hand, that might not be an issue because I don’t think we’re ever going back. I don’t know anyone who is going back to offices the way they used to.”

At this point Gregg responded. She explained that the purpose of the letter was to show the City of East Lansing was enthusiastic for a project at the Evergreen properties, which isn’t obvious if you’re not from mid-Michigan, she said. She didn’t think the letter tied the City to anything specific or did anything other than give McGraw another tool to help sell the proposed project to a potential anchor tenant, perhaps, she suggested, a company out of San Francisco who otherwise wouldn’t consider East Lansing.

She also added that people in commercial real estate understand that early renderings don’t ever match the final project, and that any project would be “right-sized” to the anchor tenant.

“But what we’re trying to express to them is that we believe in this project, that we believe in East Lansing and that we think they should come here and do business with us,” Gregg said. “So, I would enthusiastically support this letter as a step forward in attracting a suitable tenant to anchor a west-of-Abbot business district. And I don’t know if I can cheerlead for you guys, or get you somehow on board with the idea that there is a recovery, even if it is a recovery that is dealing with an ongoing pandemic. I don’t know — you guys are a bummer, I guess, is the core of that comment. I would love to telegraph to anyone that would gamble on us that we’d be delighted to work with them.”

Babcock spoke up to say she is a believer in the economic recovery of this project and that her concerns about this letter do not mean otherwise.

“I am not saying I don’t believe in East Lansing’s recovery. Of course I do,” Babcock said. “But I’m saying that this is, at best, a Potemkin village and at worst this isn’t real. We haven’t approved it. And it could be misleading and that would be foolish on the City’s behalf.”

City Manager George Lahanas joined the discussion at this point, saying that the letter is just something for McGraw to use to attract an anchor tenant. Lahanas said it adds “oomph” to anything McGraw is saying about businesses being wanted in downtown East Lansing.

At this point Watson started asking about the origins of the letter, and asked why it was originally created.

Planning, Building and Development Director Tom Fehrenbach responded that the DDA wanted to take on a proactive role as River Caddis worked to bring something to fruition for this project, and thus the letter came to be. 

After Bacon and Gregg added more about how they’re ultimately optimistic a tenant will be found and the project will come to be, Watson had another follow up, this time directed to Bacon.

“So, if you’re with them [the DDA], and you’re a voting member, and City Manager Lahanas is a voting member, why couldn’t DDA just create a letter, write everyone’s names and you all sign it and send it to them?” Watson asked.

Fehrenbach answered.

“They certainly could do that,” Fehrenbach said. “I think the DDA was specifically looking for the authorization of the Mayor in his capacity as Mayor to sign on behalf of the Council to indicate the support of Council, not just the DDA.”

Ultimately, Council did vote to allow the Mayor to sign off on the letter signaling the City’s excitement for redevelopment of the Evergreen Properties — but only via a 3-2 vote following the testy debate. Not quite the support of Council that was imagined when this letter came from the DDA.

John McGraw of River Caddis Development did not respond to an email seeking comment for this story.