UPDATE: Wrench Thrown Into MSUFCU’s Downtown Office Building Plan

What looked like a sure-thing may not be after all, now that the owners of the Dublin Square property are throwing a legal wrench in MSU Federal Credit Union’s plans to build a seven-story office building just south of there.

In late September, East Lansing’s City Council unanimously approved the MSUFCU project, to be constructed on what is currently publicly-owned parking lot #4. The closing on the sale of the land from the City to the credit union was expected to happen shortly thereafter.

But Tuesday night, City Council was asked to approve a request from MSUFCU to extend the closing deadline to Jan. 6, 2021, “to allow MSUFCU additional time to negotiate construction easements with a neighboring property owner prior to closing the sale.”

Council passed the extension unanimously, and MSUFCU CEO April Clobes confirmed the trouble: “The owners of the property to the north of our proposed property did notify us of their legal intentions regarding any infringement of our construction project to their property. We have been in conversations and hope to reach an amicable resolution.”

The property to the north is the Dublin Square, co-owned by developer Paul Vlahakis.

Vlahakis had hoped to redevelop the Lot 4 property himself under the “Park Place” concept – a concept that called for a large redevelopment spanning Lot 4, his property, and the DDA’s Evergreen properties, and featuring movie theaters and condos. The “Royal Vlahakis” deal kept morphing and finally collapsed about a year ago.

The project MSUFCU wants to build on Lot 4 now involves constructing a seven-story brick wall right up to property line shared with Dublin Square. Typically, building right up to a property line like this requires some construction easements from the adjacent property owner, as construction workers necessarily cross the property line during construction.

If built as proposed, the new building’s north side would consist of a 105-foot-tall, windowless brick wall constructed essentially right up against the Dublin Square deck.

Understanding that to be an unattractive featured of the design, the credit union’s architects only rendered that side of the proposed building in the last round of approvals.

On Thursday, City Council members Aaron Stephens and Lisa Babcock provided ELi with the letter from Vlahakis’s attorney, Joseph Fazio of Miller Canfield, to MSUFCU. (See it here.) Fazio says his client had previously advised the credit union of “significant concerns that the Development will have significant and detrimental effects on and cause damage” to the Dublin Square property.

Fazio indicates his client was told that “the proposed Development will in no way, shape, or form cause any damage” to his client’s property, “interrupt the operations” there, “or require any easements or intrusion on, over, or across” the property. Fazio then makes clear that MSUFCU must stay off the property, including in terms of “the swinging of cranes or any other construction over the air space.”

Clobes said that her company is hoping “to reach an amicable resolution.”

The MSUFCU project has been hailed as a potential boon to downtown, as it promises to bring many office workers to the downtown during the day and to offer community space on the second floor. It will also produce significant tax revenues.

That said, some have criticized the proposal for the blank north wall, the large footprint, and the net loss of parking spots at that spot. The construction period would undoubtedly have an impact on local businesses, especially Dublin Square, as it would involve months of lane closures on Abbot Road and Albert Avenue.

Voting in favor of the land sale contract extension Tuesday night, Mayor Jessy Gregg wished the credit union luck in working out a deal with the neighboring property owners.

This story, originally published on Nov. 11, was updated with information from the Miller Canfield letter on Nov. 13.

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