Center City developer tells East Lansing City Council member he's backing away

EAST LANSING - The developer of the Center City District project in East Lansing contacted officials Friday to say he was backing away from the project, one month after assuring that construction should begin “very soon.”

East Lansing Mayor Pro Tem Ruth Beier said she received a message from Chicago-based developer Mark Bell on Friday evening that the company was unable to meet the city’s specifications for the project. The inability to acquire a performance bond previously agreed upon means the developer will be walking away, according to the message.

“I don’t see this as a negative thing,” Beier said Saturday afternoon, adding that the area of downtown East Lansing where the project was planned is the city’s most valuable.

“We wrote a development agreement to protect the city,” she added. “We can’t have another area like Grand River and Abbot.”

For more than a decade, the former Citizen’s Bank building at the corner of Grand River and Abbot sat vacant for a decade while redevelopment plans failed to materialize.

Demolition of the site began earlier this month. 

Related:

Crews demolish vacant East Lansing Park District buildings

Construction on Center City project in East Lansing to start 'very soon,' developer says

Bell didn’t immediately respond to requests for comment.

The project called for a 12-story apartment building on the 100 block of East Grand River, with a small-scale Target on the first floor. Plans also called for the construction of a 10-story building on the site of City Lot 1 behind the apartment building, which called for retail space on the first floor, parking on the next four floors up, and a five-story apartment complex for people 55 or older.

Beier said the development agreement between East Lansing and Bell’s Harbor Bay Real Estate Advisors required a performance bond in the event the developer failed to complete the project. Without it, the city would have to pay to either restore the area or finish development if it stalled.

“We knew it was a high hurdle, but we couldn’t risk creating blight,” Beier said.

She said there was “nothing inherently wrong” with the area of East Lansing where the project was planned, citing profitable parking lots and popular existing shops.

East Lansing Mayor Mark Meadows said he hadn't heard from the developer as of midday Saturday but knew he had contacted city council members Friday night.

The East Lansing City Council unanimously approved the project's site plan, brownfield plan and development agreement in June. The Michigan Strategic Fund Board approved the project's $53 million brownfield plan in September.

The developer previously asked for the performance bond requirement to be waived, Meadows said, but the city didn’t feel it was appropriate to do so.

“The bond itself protects the city, and the city needs to be protected from the incompletion of the project,” Meadows said.

Reporter Haley Hansen contributed to this report. Contact RJ Wolcott at (517) 377-1026 or rwolcott@lsj.com. Follow him on Twitter @wolcottr.