It’s been over two-and-a-half years since East Lansing’s Downtown Development Authority gave River Caddis Development the exclusive right to redevelop the DDA’s properties on Evergreen Avenue.
But now that members of the DDA have signaled they’re done waiting for the office-space dream called “The CITADEL” that John McGraw of River Caddis first offered in February 2020, the recently published agenda for this week’s DDA meeting shows that McGraw wants six months more of exclusivity to propose an entirely different redevelopment project.
What the DDA decides at this Thursday’s noon meeting (on Dec. 15) could determine not just whether McGraw obtains this special deal for River Caddis or whether other developers will get a shot at redeveloping the land, but also what gets built next downtown and how much longer the DDA will prolong its bond debt.
As ELi reported last week, City Council members have started to ask questions publicly about what’s going on with the DDA’s finances, specifically with regard to the bond debt taken on to buy the Evergreen Properties.
In 2009, the DDA purchased the series of properties at issue. They stretch from 314-344 Evergreen Ave. At the time, the Council agreed to let the DDA take out about $5.4 million in debt in the name of the City of East Lansing to buy the properties in order to support big downtown redevelopment.
Thirteen years in, over $1.8 million in public funds have been expended to pay interest on that debt, with hundreds of thousands more paid in fees to manage the debt. Today, the principal stands at about $5.1 million – not much less than the original sum. The DDA and City Council just voted to support refinancing of that debt for the third time.
For all these years, the DDA has been hoping some developer would solve its debt with a big redevelopment project. That’s what River Caddis was supposed to do with The CITADEL.
Despite periods of frustration, over the years, City Council members have made no real move to force the DDA’s hand on the situation, with one exception: In October 2019, the Council voted unanimously to reject the “Park Place” proposal for the Evergreen Properties from Royal Properties in partnership with Paul Vlahakis, owner of the Dublin Square property.
At the time, the DDA had wanted to keep trying with those developers, but Council said no more on the Royal Vlahakis deal.
A month later, in November 2019, the DDA members voted to issue a Request for Proposals on the Evergreen Properties to see what other ideas they could attract.
Only two developers responded. Convexity (the co-developer of The Abbot Apartments and The Graduate) proposed a big housing project. River Caddis proposed an 8-story project called The CITADEL, primarily consisting of office space.
Convexity dropped out a month later due to a change in tax assessment that they said rendered their project infeasible. With just River Caddis’s concept left, the DDA gave McGraw’s company an exclusive agreement in April 2020.
Just a couple of months later, River Caddis changed its design in a major way. Originally, McGraw and his company promised to build expensive indoor parking as part of its private redevelopment on the Evergreen Properties. But, by June 2020, McGraw had shifted the expensive parking problem to become the city’s financial problem. Still, the DDA stuck with McGraw and River Caddis.
By July 2021, the City was interested in considering an Artspace project for the Evergreen Properties. The DDA voted to make that a possibility, but decided to maintain the exclusive right to redevelopment with River Caddis, meaning if anyone built the Artspace project on the DDA’s properties, it would be McGraw’s company.
Then, over a year later, in October of this year, with River Caddis still holding the exclusive right to redevelopment, Paul Vlahakis came forward with a new concept for the DDA’s land and a new partner, the New Jersey-based Michaels Organization.
Vlahakis used the public comment period at the DDA’s meeting two months ago to pitch a mixed-use project that would include retail and apartments built on the Dublin Square property, the DDA properties, plus several owned by private entities, including Convexity.
No one at the DDA publicly responded to Vlahakis’s new pitch, and the owners of the private properties told ELi they had not given Vlahakis permission to include their properties in the plan.
But, at the DDA’s very next meeting, on Nov. 17, City Manager George Lahanas – a member of the DDA by virtue of his office – said he believes it’s time to give up on the office space plan. DDA members started talking about the possibility of opening the properties up to a new Request for Proposal – open to all interested developers – or even selling the land.
Selling the land wouldn’t bring anywhere near the $5.1 million owed, but could generate a seven-figure sum that would pay down a chunk of the debt, reducing how much more in public funds will be needed to pay for interest.
But now, the agenda for this Thursday’s meeting has been released and it shows city staff want the DDA to consider letting River Caddis Development have an exclusive deal that would allow them to create a proposal for a mixed-use project that would primarily be housing.
In his recent letter to the DDA (misdated Dec. 9, 2023), McGraw said he wants six months of exclusivity to explore work on this proposal. Presumably, when he gets this proposal together, he could ask for continued exclusivity, continuing to forestall any other developers’ attempts.
River Caddis Development “is still the best partner for the City for this project,” McGraw writes in his letter. “We are uniquely positioned to leverage our prior work on the site and our national expertise in creating diverse housing and mixed-use developments to create a feasible plan based on real, trusted partnerships and solid data garnered through time and money already spent on the project.”
But, as Mayor Ron Bacon (also a member of the DDA) pointed out at the DDA’s November meeting, River Caddis is not the only partner in this deal who has lost money waiting for River Caddis to start a project. In the time since McGraw first pitched his idea for The CITADEL, the DDA has paid about a half-million dollars in interest on the debt, waiting for a solution.
At the last DDA meeting, City Attorney Anthony Chubb raised the question of whether giving River Caddis another exclusive deal now, allowing McGraw to propose and build something entirely different from what he had first proposed, might irritate other developers enough to bring a lawsuit against the DDA and/or the City.
Regardless of the possibility of a lawsuit, some DDA members wondered at the last meeting whether issuing a new call for applications or selling the property would be a better choice for the DDA and city.
Want to watch the decision-making or weigh in? This week’s DDA meeting will take place starting at noon on Thursday, Dec. 15, in Room 300 of the Technology Innovation Center at 325 E. Grand River Ave.
The agenda allows for public comment near the start of the meeting. Written comments to be communicated to the DDA can be sent to Director of Planning Tom Fehrenbach at email@example.com and should explicitly state they are meant to be shared with the DDA. (To be included in this meeting’s packet, they should be sent no later than noon on Wednesday, Dec. 14.)
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