East Lansing error delays Park District project demolition

Alexander Alusheff | Lansing State Journal

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EAST LANSING - The blighted buildings on Grand River Avenue between The Peoples Church and Abbot Road will remain standing for longer than expected.

Demolition of those properties, part of the $154-million Park District project, could be delayed by about one month because East Lansing city employees overlooked an amendment to the state's brownfield laws in April.

The recently amended law requires the city to formally terminate the 2008 brownfield plan approved for the City Center II project and give 30-day notice to its former developers before the Michigan Strategic Fund can consider approving a credit for the new project, said Lori Mullins, the city's community and economic development administrator.

The city was notified of the problem by the staff of the Strategic Fund, which was expected to consider a $10-million Michigan Business Tax credit for the Park District project in July. The project will consist of a 13-story hotel and apartment complex.

The amendment went into effect on April 5. The city passed the current project, proposed by Convexity Properties, on April 25.

Notices were sent to Strathmore Development Co., CADA Investment Group and City Center Two Project LLC on Monday. The city will terminate the old plan, which naturally lapsed in 2013, on July 27 and re-approve the Park District plan immediately after, Mullins said.

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Developer Scott Chappelle's Strathmore Development is an assumed name of CADA Investment Group and managed City Center Two Project. The Park District properties were sold at a foreclosure auction in 2015 to Chicago-based WGR Financial, a subsidiary of DRW Holdings. Convexity is the development arm of DRW.

The former developers have the right to speak about the termination at the public hearing during the July 27 meeting, Mullins said.

Chappelle said he had not yet reviewed the matter and had no comment at this time. David Pierson, Convexity's Lansing-based lawyer, could not be reached for comment.

Demolition of the blighted buildings was expected to start in early August, shortly after the Strategic Fund meeting in July. The Park District project is now expected to go before the fund's board on August 22.

"At this point it appears that asbestos removal and utility disconnection will proceed this summer and the building demolition will now begin in late August or September," Mullins said.

Contact Alexander Alusheff at (517) 377-1096 or aalusheff@lsj.com. Follow him on Twitter @alexalusheff.