Tensions Run High at Council Over Possible Conflicts of Interest, Uses of Public Funds

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Dylan Lees for ELi

East Lansing Mayor Ron Bacon (right) and Mayor Pro Tem Jessy Gregg listen to public speakers during the Sept. 6, 2022, City Council meeting.

Public outcry over Attorney General Dana Nessel’s decisions in an East Lansing police shooting case wasn’t the only source of tension at East Lansing’s City Council on Tuesday night. 

The mayor and city manager expressed their frustration at each other over a question of support for businesses downtown. Additionally, during public comment, two members of a City commission objected strenuously to the possible removal of one of their own from a key advisory group. 

Both discussions implicated questions of possible conflicts of interest and what constitutes proper decision-making over use of public funds.

A dispute breaks out over the question of how to support East Lansing businesses.

The sharp exchange between City Manager George Lahanas and Mayor Ron Bacon occurred over two items on the agenda aimed at supporting local businesses and entrepreneurs.

First, City staff presented an idea for allowing pop-up retail space in the covered area on Albert Avenue under the colorful parking structure, so that entrepreneurs could try out new concepts. Then staff also presented a concept for allowing businesses to apply to close streets outside their shops or restaurants for special events. Normally, street closures are initiated by City staff, not private businesses.

In the discussion, Bacon said that the ideas presented would require too many hurdles, including potentially requiring businesses to take out million-dollar liability insurance policies and being charged by the City for barricading the streets. 

With staff saying applications for street closures would probably go all the way to the desk of the city manager, Bacon said he thought the City should reduce the red tape in terms of approvals.

“I know how we kind of do things here,” Bacon said, “and everything goes to die a death of a thousand cuts in East Lansing and doesn’t ever really find a home.”

“We went through all the rigamarole with food trucks,” he added. “And we’ve done nothing with food trucks.”

He also said the city should pay for much or all of the publicly-incurred costs of closing streets to promote businesses, including the cost of marketing the events.

Bacon declared he is tired of waiting for the city to get business support options in place when so many are struggling to survive right now. 

He objected to the idea of charging businesses according to “cost recovery” calculations when “we already cost recover quite a bit from our local businesses. I think it’s not a bad idea to sometimes partner with them and create opportunities with them” to get people downtown, he said.

But City Manager Lahanas replied (with the help of staff at the meeting) that putting concrete safety barriers in place to close a downtown street on a weekend could cost the city as much as $3,000. 

Dylan Lees for ELi
East Lansing City Manager George Lahanas during the Aug. 6 city council meeting.

Lahanas said city money couldn’t be used to support single businesses for “private purposes.”

Bacon countered that public funds were used for Albert EL Fresco – with upwards of $150,000 in tax revenues contributed by the Downtown Development Authority. He said he was tired of going to ribbon-cuttings for new businesses and then providing little follow-up support. 

“Unacceptable,” he concluded.

Mayor Pro Tem Gregg weighed in, saying she also wanted to see support for businesses. But, Gregg said, she understands where Lahanas is coming from with his concerns of risk management and cost control. 

Dylan Lees for ELi
Mayor Pro Tem Jessy Gregg offered support for areas businesses during the Aug. 6 city council meeting.

She suggested closing Division Street just off Grand River Avenue for a weekend event – an idea proposed by a business there – is logistically complex.

“We do have a true-cost accounting system,” Gregg said. “We can’t just write off expenses, because that’s not the kind of body we are.” 

She said Council could support the idea by figuring out where the money would come from.

Threaded through Tuesday’s council meeting were subtle references to the fact that the city has provided Gregg no-cost support for the Fashion Fiber Festival she organized outside her downtown fabric store Seams last fall, when she was the mayor.

Responding to questions from ELi, Gregg confirmed via email on Thursday that her business did not have to pay anything for the Grove Street closure just outside her shop.

She said she “organized the vendors and demonstrations, [while] the city organized the music, picnic tables, street painting and provided a tent for one of the vendors who didn’t have their own.”

“The F3 festival is co-sponsored by the city and there is no Seams or Woven Art inventory on the street during the festival,” she wrote. “All the street space is dedicated to independent vendors.” 

City staff, not elected members of council, “decided that the city should co-sponsor” the event outside the mayor’s privately-owned shop, Gregg said. 

“My understanding was that it had been discussed between the planning staff,” she said.

At Tuesday’s meeting, after being given verbal support by Gregg, Lahanas persisted in his view that businesses who want streets closed have to pay for some or all of the costs. He told Bacon he wants to know where council wants to pull the money from, if the city is going to do this kind of street-closure support.

Gregg said at the meeting that perhaps a special fund will need to be set up to cover such costs for businesses.

Questions about how to use U.S. Housing and Urban Development (HUD) funding continue to cause strife.

Also at Tuesday’s meeting, East Lansing Parks & Rec Advisory Commission Chair Adam DeLay and Vice Chair Chuck Overbey came to public comment to voice strong objections to an earlier council discussion. 

They were referring to council’s consideration on Aug. 16 of removing Parks & Rec Commissioner Pam Weil from the East Lansing committee set to advise council on how federal HUD Community Development Block Grant (CDBG) funds should be used.

In East Lansing, the use of the funds has a controversial history. These federal funds are meant to support economic development in low-income areas. The city has historically deployed these HUD funds in student-heavy areas of East Lansing – like the Bailey neighborhood – because such areas appear demographically to be “low-income” due to college students’ earning little compared to other adults. 

The recording from the Aug. 16 council meeting to which DeLay and Overbey were referring shows council member Dana Watson made the motion to remove the Parks & Rec seat from the CDBG advisory group and give the seat instead to a Planning Commissioner.

Dylan Lees for ELi
Council member Dana Watson makes a point during the Aug. 6 meeting.

“During our CDBG discussions, Parks and Recreation [Commissioner Weil] asked for funding and it felt and appeared conflictual,” Watson said then. “I know that, you know, the commissioners don’t get paid out of Parks & Rec. But to me obviously that commissioner might be passionate about the dollars or the things that Parks & Rec is doing in a possible unfair way to the representation that’s being asked for by the CDBG advisory group.”

Bacon formally seconded the motion and supported Watson’s comments, saying “appearances matter” when it comes to conflicts of interest. 

But Mayor Pro Tem Jessy Gregg questioned their read of Weil’s actions. She suggested council take up the matter at a later date, when there had been more time to consider the issue. 

The council then continued on with business with no resolution of the moved-and-seconded item, contrary to parliamentary rules, as confirmed by the minutes

At Tuesday’s meeting, Parks & Rec Chair DeLay (who ran unsuccessfully for Council last year) and Vice Chair Overbey questioned the idea that Weil had demonstrated a possible conflict of interest. 

They argued it was reasonable for Weil to advocate strongly for use of CDBG funds to be used for Parks & Rec facilities, as she is a Parks & Rec commissioner. The two said Weil  had demonstrated appropriate compromise in the group.

What will happen on that item remains to be seen, but the dispute recalls many previous arguments and controversies over how to manage decisions about CDBG funding in East Lansing.

What else you might want to know about this week’s council meeting:

With little discussion, council also approved the 2023 Humana Medicare Advantage program which, according to a staff memo, “offers comprehensive medical and pharmacy benefits to the retirees.” Humana had asked for an increase in premiums of 3.12 percent, but the city asked for no change and Humana agreed. 

By his request, Bacon was recused from the vote because he works in the pharmaceutical industry and he wanted no appearance of conflict.

You can see what else council dealt with by checking the agenda and the archived recording

Council has not been at full strength for a long time.

Council member George Brookover has been absent from council of late, missing five meetings since early June. Council has been formally voting to excuse him, a move necessary to keep Brookover from being automatically removed from office for absenteeism by provision 3.4.b in the City Charter

ELi has sent messages to Brookover and the city communications department asking for an explanation of the absences and an expected date for Brookover’s return. We have not yet received a response.

Update (4:05 p.m.): Brookover has sent a statement and you can find it here.

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