From brownfields to beers and ballpark apartments: How Pat Gillespie built the Stadium District

LANSING — A minor league ballpark replaced the topless bars and adult bookstores along the 500 block of Michigan Avenue in the mid-1990s.

Just over a decade later, Pat Gillespie got to work on the other side of the street.

A city parking lot became the Stadium District. Then the site of the former City Market became the multicolored Marketplace Apartments.

He helped to turn an abandoned auto warehouse into the Lansing Brewing Company, which regularly hosts live music, cornhole tournaments and yoga. He built an apartment building overlooking the outfield of what's now Cooley Law School Stadium. He bought a former Napa Auto Parts that's since been redeveloped into Michigrain Distillery.

Little by little, the Lansing native has pieced together underused lots and vacant buildings into a neighborhood of his own design, now known as the Stadium District. In the process, he brought hundreds of new residents into Lansing's downtown.

“The Stadium District has fundamentally changed the way people think about downtown," former Lansing Mayor Virg Bernero said.

Gillespie, 48, has an oversize map of the Stadium District in his office showing the properties he owns. Large swaths of the area are highlighted in orange, the color his development company, The Gillespie Group, uses in its advertising.

By the end of the year, he hopes to have firmed up plans for the 600 block of Michigan Avenue, where he says a grocery store and additional housing could crop up. He expects there to be a hotel in the area in the next three to four years.

“We're pretty proud of what’s been able to happen in 10 years," he said. "But really now that the momentum is there, it’s just got us energized to do more on a bigger scale.”

The early years

Gillespie credits the book "Creating Wealth" by Robert G. Allen with sparking his interest in real estate. He read it when he was 14.

Gillespie has spent his entire life in Lansing. He was raised in a house on Foster Street, graduated from Lansing Catholic High School and then, in 1992, from Michigan State University's School of Planning, Design and Construction.

Gillespie bought his first house on Clemens Street when he was 18. His younger brother and fellow developer Scott Gillespie was just 17 when they bought their first rental home together several years later.

The brothers worked together for about a decade before taking over separate development companies, Scott Gillespie said. He described those early years working with his brother as fun and invigorating. They took risks, he said, and worked incessantly.

“We always had two or three projects going on at a time," Scott Gillespie said. "The challenge we had was staying on top of all of them.”

After buying and renting homes on Lansing's east side, the brothers started focusing on apartments around Muskegon and Allendale.

"Our first 10 years, our company did all suburban sprawl," Pat Gillespie said.

But in the mid 2000's, Gillespie started eyeing the area around the Capitol building. He was feeling more confident as a developer, he said, and wanted to take on more ambitious projects.

He made his first foray into the heart of Lansing in 2005 when he constructed the Prudden Place condos on the corner of Larch and Saginaw streets.

Three years later, Gillespie opened the $11.5 million Stadium District Building downtown on the site of a former parking lot across from what was then Oldsmobile Park.

But he said the redevelopment of Lansing Board of Water & Light's former Ottawa Power Station plant into the Accident Fund headquarters that same year was his green light to really move into downtown.

In a little more than 10 years, Gillespie has bought, redeveloped or constructed 10 buildings in the area immediately surrounding the ballpark on the east side of the Grand River in downtown Lansing. Today, his business employs 85 people.

He also owns commercial and residential properties in Jackson, Midland, Muskegon, Ionia and Allendale, but none of his other projects can compare to the amount of work pouring into the Stadium District, he said.

“This is the most focused,” he said. “This is the most fun — being able to put multiple blocks together and play off a theme."

'He can’t walk away'

It was a chilly Saturday in June, but a handful of Lansing Brewing Company visitors opted to sit outside to eat their burgers and nachos. People inside sipped beer with kids on their hips as pop songs from Halsey and Rachel Platten played on the sound system and soccer games played on TVs. Children were blowing bubbles and drawing stick figures on the cement on the patio.

The building that houses LBC was a vacant auto warehouse five years ago.

"I lived (in Lansing) when there were tumbleweeds blowing through downtown," manager Jeremy McKowen said. "Now look at it."

McKowen described the brewery and restaurant as a gathering space — whether that means families meeting up over weekend lunches or friends hanging out during weekly cornhole tournaments.

Lansing residents were craving something like it, McKowen said, and have embraced the space since it opened in 2015.

Brent Forsberg, a principal of development group Urban Systems, said the attention to detail Gillespie put into his projects can easily be overlooked.

“Look at Lansing Brewing Company. That wasn’t just a 'we’re going to put a brewery there' decision,” he said. “There was a lot of planning.”

The Gillespie Group invested $3.7 million to transform the former auto warehouse at 518 E. Shiawassee St. into a full-scale brewery.

The original Lansing Brewing Company closed its doors in 1914 because of local prohibition. Gillespie's iteration opened in 2015.

The brewery pays homage to Lansing leaders. One of its most popular brews is Angry Mayor IPA named after former Lansing Mayor Virg Bernero. They also serve beers like the Love Lansing Ale and the Michigan Medley Session IPA.

Gillespie wants to see more successes like it. Lansing lags behind other Midwestern cities like Madison, Indianapolis and Grand Rapids, he said. Those cities were more aggressive in their development efforts 15 years ago than Lansing was, and it shows.

“That doesn’t mean our time can’t come," he said. “I think people are starting to realize that we have some momentum. We’re just later in the growth stage than they are.”

To prevent tunnel vision, Gillespie looks outward. He's visited and taken notes on cities like Nashville, Columbus and San Diego and tried to incorporate elements of those cities into his plans for Lansing, even when the results are too colorful for some.

As a Lansing native, Gillespie has a more community-focused approach than outside developers, said Nancy Mahlow, president of the Eastside Neighborhood Organization. He listens and is open to feedback, even when people don't agree with him.

And his downtown redevelopment projects have had a ripple effect on the rest of the neighborhood, she said.

“It can only grow and get better. There’s so much energy going on down there," she said. "It’s filtering back into the neighborhoods.”

Gillespie has to fulfill his promises and surpass expectations because this is his hometown, said Bob Trezise, the president and CEO of the Lansing Economic Area Partnership. “He can’t walk away from it."

In 2012, Trezise came up with the idea to have a developer build a private building in Cooley Law School Stadium to help offset the city’s costs for improvements to the public structure. The city approached four developers to work on the project. Only Gillespie agreed. The result was The Outfield Lofts.

“There was no one else other than Pat," Trezise said. "People forget that.”

Jason Vismara, 24, graduated from MSU in 2016 and moved into The Outfield Lofts last summer. A sports fan, Vismara said the prospect of watching Lansing Lugnuts games from his balcony drew him to the building.

“It definitely feels like you're out in the outfield," he said. "You can hear the players talking to each other."

Vismara also likes that he's near downtown bars and restaurants. During the summer months, he often listens to live music at the Nuthouse Sports Grill just across the street. Lansing Brewing Company is a short walk from his apartment.

In April, Gillespie opened another venue inside the second phase of the Marketplace Apartments across the street. MP Social serves flatbread pizza, charcuterie boards, cocktails and wine with views of the Grand River.

Forsberg said Gillespie's energy and excitement for downtown Lansing and the region as a whole is contagious.

“He’s fun to be around,” he said.“So many ideas are coming out of Pat at any given moment.”

'Economic tools'

Gillespie has invested millions in local projects, but he’s also received help from the city and state in getting those projects across the finish line.

For example, the Lansing Brewing Company received about $50,000 in public investment, according to Lansing Economic Development Corporation annual reports. And the $11.8 million Outfield Lofts project was financed in part with a $2.5 million equity investment by the Michigan Economic Development Corp.

Bernero said incentives are "economic tools," and, while their use can be controversial, what's now the Stadium District wouldn't have been built without them.

“What we have never done in Lansing is write checks to people," Bernero said.

Cleaning up downtown also helps drive revenue for the rest of the city, he said. Gillespie's 272 apartments in the Outfield Lofts, Marketplace Apartments and Stadium District building brought additional people downtown, and those people pay income taxes, he said. The city collects 1% of residents yearly income.

“We are losing nothing," Bernero said. “We’re not giving away anything.”

Some Gillespie projects also used tax increment financing, which diverts future property tax revenue increases from a defined area toward a development or public improvement project.

The Marketplace's first phase had $6.7 million in brownfield tax increment financing (TIF) for site preparation, infrastructure and lead and asbestos abatement. The site also had about $3.5 million in Michigan Business Tax Credits.

TIF subsidies aren't taken directly from a city's budget, but a city loses out on increases in tax revenue because of them. Brownfield TIFs are a way to cover the costs of environmental clean-up and the construction of public infrastructure improvements.

Altogether, the Marketplace project — which includes 158 units — cost Gillespie about $19.8 million to build, including those incentives.

Gillespie said it wouldn't have made financial sense to redevelop some of the sites in the Stadium District — including the Marketplace and the Stadium District building itself — had incentives not been offered because environmental problems were so severe. Almost every property Gillespie has worked on in the Stadium District was a brownfield.

City Council President Carol Wood said Lansing's use of tax incentives for Gillespie's projects isn't out of the ordinary, but she thinks the city could have held out for other developers who'd be interested in the area without needing incentives.

And while there's always some risk for developers, she said the city also takes on risk. A developer can pitch a project as boon for income taxes for the city but end up with an apartment full of students.

"If you have a property that has a lot of incentives, it can be years before we see property taxes," she said.

More eyes on downtown

Gillespie isn't the only developer who has shown interest in downtown Lansing.

In September, four development groups — including one that Gillespie was involved in — pitched plans to redevelop the current City Hall building adjacent to the Michigan Capitol.

The Eyde Co. purchased the Oliver Towers apartment building on Capitol Avenue in 2015 and had incentives and a brownfield plan for the project approved last year.

And Forsberg's development group Urban Systems bought the former Lake Trust Credit Union headquarters on the south end of downtown Lansing in February. That building is just one part of larger plans Urban Systems has to build mixed-use housing between REO Town and the city's central business district.

That kind of interest in downtown would have been unheard of 20 years ago, fellow developers say.

“He really opened the door for that construction, and that was something that really helped us," said Forsberg, who called Gillespie the "pioneer of the downtown core."

Bringing more people downtown is good for businesses, City Council Member Adam Hussain said.

A city's downtown has a unique ability to draw tourists, large conventions, events that wouldn't happen elsewhere, he said.

“For so long, our downtown didn’t serve that need."

Hussain, who chairs council’s Development and Planning Committee, said he’s happy to see downtown begin to grow but wants to make sure the prosperity extends to other areas.

He believes the city council can do a better job of convincing developers like Gillespie to invest in smaller projects in other parts of the city.

“Unfortunately for so many communities …all the momentum is geared to downtown and major corridors," he said. “We need to ensure that this means progress for the entire city.”

Gillespie said he wouldn't be surprised to see more outside developers paying attention to the area. He'd be glad if they did.

“The more investment the better,” he said. “We welcome outside people. It validates that there’s a market here and that it's worth people spending their time and money on Lansing.”

Contact reporter Haley Hansen at (517) 267-1344 or hhansen@lsj.com. Follow her on Twitter @halehansen.