Official: Lansing could eventually sell City Market to Detroit developers

Lansing State Journal

The former Lansing City Market in downtown Lansing, seen Tuesday, Sept. 8 2020. The building will be leased to Detroit Rising Development and transformed into the Lansing Shuffleboard & Social Club. Plans include food, drink, games, community classes, and entertainment.

LANSING — Detroit developers are looking to rent the former Lansing City Market site so they can run an events space with shuffleboard, food venues and other entertainment options.

If those plans go well, the city may eventually sell them the riverfront property, Lansing's economic development director said.

A lease pending City Council's approval would have the developers with Detroit Rising, LLC make renovations to the market building and the adjacent patio so that the Lansing Shuffleboard & Social Club can open along the eastern bank of the Grand River by 2022.

Any plans for a sale would depend on the venue's success while the developers are leasing, and there is no timeline to offload the property, Lansing spokeswoman Valerie Marchand said.

"We don't have any set plans to (sell) it," Marchand said. "It's just something we're considering."

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The Lansing City Market as seen from the Shiawassee Street Bridge July 6, 2018.

Sale would require voter approval

Since the property is city-owned parkland, voters would need to authorize a sale. A majority of Lansing City Council would first need to bring the issue to the ballot.

Eventual ownership makes more sense for the developer's bottom line, said Brian McGrain, Lansing's director of economic development and planning.

"We are looking for folks who can be the most tenable owners of the property long-term," he added.

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Detroit Rising is interested in buying the property in a few years should Lansing make that offer, the company's General Partner Jon Hartzell confirmed.

Total investment in the property is pegged at $3 million. The developers are seeking loans of $65,000 and $400,000 from the Lansing and Economic Development Corporation and the Lansing Brownfield Redevelopment Authority, respectively, Kris Klein of the Lansing Economic Area Partnership said.

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Reimbursement from the brownfield authority, which is funded by property taxes, could cover improvements such as utility work and exterior and interior renovations, Klein said.

Plans include building a second-floor mezzanine, adding permanent food stalls and replacing part of a wall with glass to provide views of the river, Hartzell said.

A view of the Grand River during a Grand Concert Series event at the Lansing City Market photographed on Thursday, July 12, 2018, in downtown Lansing.

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Detroit Rising to seek liquor license

The proposed lease bars tenants from running any type of cannabis business at the property, although Detroit Rising will seek a liquor license.

The agreement would allow Detroit Rising to sublease to other tenants with an initial discount to Lansing-based vendors. It specifies that the company must host free weekly community events, such as open mic nights or bartending classes. It also mandates that the company give reduced rates to Lansing community groups seeking to use the building.

Detroit Rising would start by paying $500 a month to the city if any businesses are open while the property is under construction. Annual rent would eventually rise to $24,000 in 2022 and increase by at least 2.5% — or the cost of inflation tied to the Consumer Price Index, whichever is higher — during every year after that through the end of the lease. And beginning in September 2029, Lansing can increase rent beyond that based on a percentage of the company's profits.

Despite long history, City Market floundered in recent years

The City Market's history dates back to 1909 when a farmer's market first opened along the banks of the Grand River. Lansing sold the former City Market building in 2008 to developer Pat Gillespie, who tore it down to make way for the Marketplace Apartments.

Since then, the newer market building — built just next door to the colorful apartments — has struggled to attract vendors of fresh food.

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The market lost its federal farmer's market designation in 2016, which meant people could no longer spend Supplemental Nutrition Assistance Program tokens there.

City Council cut off Lansing's $80,000 a year operations subsidy to the building a few years later, and, in 2018, Mayor Andy Schor announced Lansing would seek proposals for future use of the property.

Officials selected Detroit Rising's plans from among three completed proposals, according to documents provided by the city. The other submissions came from the Waterfront Bar & Grill, a former City Market tenant, and from Jackson developers seeking to open a brewery.

Schor has indicated previously he is interested in selling the market to a private developer. He initially said he wanted to bring sale of the property to the November 2018 ballot but walked back that proposal after encountering opposition.

Council members voted earlier this year to rename the street that leads to the building from City Market Drive to Riverfront Drive.

Contact reporter Sarah Lehr at slehr@lsj.com. Follow her on Twitter @SarahGLehr.