East Lansing to review Park District developer finances

EAST LANSING – East Lansing City Council plans to enlist the help of outside legal and financial experts to make sure a proposed development project downtown is financially sound.

City administrators are in the process of hiring consultants that will review drafts of a development agreement and brownfield plan, Mayor Nathan Triplett said today. The firms are expected to review the developer's finances – in part to determine whether the Park District project can be built – and whether the documents have enough safeguards to protect the city in the event the project isn't completed.

Meanwhile, a company looking to redevelop a blighted downtown East Lansing intersection says it is planning a smaller building in response to concerns that its original 10-story tower would be too tall.

Park District Investment Group LLC, which plans a $92 million overhaul at the corner of Grand River Avenue and Abbot Road, instead wants to build an eight-story building with apartments, retail and hotel rooms, revised site plans show.

The company, PDIG, now plans 83 hotel rooms, instead of 120; 77 apartment units, instead of 102; and 273 underground parking spaces, rather than 283, city documents show.

Hotel Indigo, a boutique brand of British hotel chain InterContinental Hotels Group PLC, will remain part of the project, said Tom Eckhardt, an attorney representing PDIG.

PDIG had planned to own and operate the hotel on a license first awarded in 2008, Eckhardt wrote this month in a letter to East Lansing administrators. It since has found an unnamed Chicago company to operate the hotel, Eckhardt said, after the city's approval process prevented PDIG from meeting license deadlines.

Eckhardt said the identity of the hotel operator would be disclosed during the city's review process.

Apartments will have one, two and three bedrooms, documents show. Plans for studio units have been scrapped. The apartments will not be marketed to undergraduate students and will offer such amenities as valet parking, room service, dry cleaning and concierge services, PDIG said.

PDIG plans a second, four-story building on Evergreen Avenue that includes retail space and offices on the ground floor and apartments or more offices on upper floors. Those plans have not changed.

Developers hope to begin construction this year, Eckhardt said. The entire Park District project should take two years to finish.

Council members have asked PDIG to revise site plans, Triplett said. They could be reviewed again in March.

Under proposed development and brownfield agreements, PDIG would be required to handle infrastructure upgrades, including roads, sewers, water mains and utilities. Eckhardt said the cost of that work is roughly $17 million, which would be offset in part through a 25-year brownfield plan and state tax credits.

The latter include more than $12 million in Michigan Business Tax credits originally approved for City Center II, an earlier project at the Abbot-Grand River intersection that fizzled in 2012 over issues with financing.

Glen Arbor-based Crouch Investment Group LLC is a majority owner of Park District Investment Group. East Lansing developer Scott Chappelle is Crouch Investment's manager, city and state records show. Chappelle's Strathmore Development Co. was the developer behind City Center II.

PDIG is the only developer remaining for the area known as Park District after Lansing Township-based DTN Management Co. withdrew its $70 million proposal to redevelop nearly 3 acres of city-owned property after a ballot issue failed to sell three public parking lots DTN needed for its project.

View the Park District documents here.