By now, we thought we’d be providing some important updates on the refinancing of the Center City District bonds – the financing used to pay for the construction of the Albert Avenue parking ramp and other new public infrastructure in the $125 million deal made between the City of East Lansing and developers Harbor Bay Real Estate and Ballein Management.
- Has the bondholder on the original $25 million in bonds, Scottsdale Capital, asked to be paid back? Has an investor been identified for the refinancing bonds? If so, who is it?
- If refinancing bonds have now been sold to that investor, under what terms? What rate is East Lansing paying? For how many years? For what amount? Who was paid how much out of the new bonds, and for what reason? Who signed off on the new deal?
- If Scottsdale Capital hasn’t been paid back out of refinancing bonds, has East Lansing’s Brownfield Redevelopment Authority (BRA) fulfilled its legal obligation to Scottsdale Capital by asking the developers to write a check to the trustee to cover the $2.4 million fund shortfall for the approximately $3.7 million payment that’s due next Tuesday, Dec. 1, 2020?
But in spite of our asking these questions, we’ve gotten no answers. Not from those authorized to sign off on the bonds, not from Mayor Aaron Stephens, and not from Director of Planning Tom Fehrenbach, who handles the bonds.
Additionally, Stephens still hasn’t answered our Freedom of Information Act (FOIA) appeal from Nov. 13 asking to be told who sent in questions about the bonds that City staff answered a month ago.
Meanwhile, no one from City Council seems to be signaling a clear intention to defend the $6 million in taxes that former mayor Mark Meadows has indicated they should.
Council member Lisa Babcock did push two weeks ago for a discussion of the bonds at City Council. And she got some answers. But she was cut off by Mayor Aaron Stephens before she could ask about the $6 million.
Asked for comment, Babcock told ELi yesterday, “It’s frustrating trying to untangle deals that were made by others who have abandoned their roles and left us with conflicting narratives. I also want the answers to these questions [from ELi], and I don’t believe it should be an excruciating process for the public or council members to receive them.”
Mayor Pro Tem Jessy Gregg essentially agreed with Babcock that the situation is murky, saying yesterday that “Due to the way these were structured it’s even more confusing than ordinary municipal bonds. On the one hand we do have a chance to refinance at a lower interest rate, but on the other hand it’s still not clear to me what our legal and ethical obligations are. I did find the presentation at the recent council meeting helpful. It gave me a chance to get some plain English answers to some of my questions.”
Gregg continued, “I hope there is a future where I understand both the original bond and the refinance but I still don’t understand why the previous Council pushed to include the parking structure in what could have been a reasonably straightforward development on private property. Since I don’t understand why they thought this was in our best interest in the first place, I suspect that true clarity is never going to dawn. I would like to get to a point where I feel like we are honoring our half of the contract without feeling like we’re being taken advantage of. I do think that we are headed in that direction.”
Mayor Stephens and Council members Dana Watson and Ron Bacon have not yet responded to requests for comment.
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