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East Lansing’s Downtown Development Authority (DDA) has granted another six-month extension on a contract that gives River Caddis Development exclusive rights to develop a plan for the DDA’s Evergreen properties.
The 7-2-1 vote at the Thursday (Dec. 15) DDA meeting is the latest development in a saga that’s been going on for years since the DDA purchased the land in 2009.
In early 2020, River Caddis initially proposed to the DDA an eight-story building primarily to be used as office-space. The exclusive redevelopment contract the company has held with the DDA from April 2020 forward had been for that project, called The CITADEL. It is unclear what River Caddis’ next proposal will look like.
In a letter to the DDA requesting the extension, River Caddis President John McGraw wrote:
“We have heard the City and DDA’s comments of late regarding the project, and there seems to be a willingness to explore solutions for the property that differ from the original guidelines. If that is the case, [River Caddis Development] would like the opportunity to explore, design, and present alternative plans.”
McGraw presented at Thursday’s DDA meeting, highlighting successful projects by River Caddis in other cities and explaining some of the challenges his team has faced with the Evergreen project. Those challenges include the COVID pandemic and losing commitments from potential tenants for the proposed office building.
Before getting the vote of approval from a majority of the DDA, McGraw said the additional six-month period would be used to meet with stakeholders, coordinate with the city for a use-and-demand study, explore a mixed-use concept, assess financial feasibility and present a revised concept.
While the extension was granted, it was not without dissent.
“I don’t think that we should continue down the path of one developer, as much as I like the McGraws,” DDA member Greg Ballein said. “I think opening it up to everybody makes a lot of sense.”
Mayor Ron Bacon also appeared reluctant to support the extension.
“I think the last time this came around, that was the moment of truth,” he said. Bacon twice called the approach being used “crony-ish.” But Bacon eventually voted “present” (neither for nor against).
DDA members across the board expressed gratitude towards River Caddis for the time, effort and money the company has spent on the project.
City Manager George Lahanas supported the extension, in part, because of River Caddis’ persistence.
“We gave them pretty tough constraints during an almost impossible period for two-and-a-half years,” Lahanas said. “It just seems fair that we give them a shot for six months and see what they can come up with.”
Lahanas said the city could always bail out and sell the property to the highest bidder. However, he said, the River Caddis project could bring a development that better suits the city’s needs and goals.
The vote was split with seven members in favor, two against and one “present” vote from Bacon. Ballien and Luke Hackney cast the votes against.
The vote comes against the backdrop of the DDA having to pay back the debt it accrued from purchasing the Evergreen Properties in 2009. At the time, Council allowed the DDA to take out $5.4 million in debt to purchase the properties stretching from 314-344 Evergreen Ave. to support big redevelopment downtown.
Today, the debt stands at about $5.1 million, with about $2 million having been spent to pay interest and management fees on that debt.
At the Dec. 6 City Council meeting, Council voted 3-1 to accept the DDA’s recommendation to refinance the debt for the third time since 2012. (The debt has been restructured two additional times.) Several Council members expressed concerns over the DDA’s debt and financial management at that meeting.
Under the new agreement, River Caddis will operate under a “Final Extension Period” that will expire July 17, 2023. Previously, the agreement extended automatically for six-month periods if no action was taken.
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DDA Grants River Caddis Another Six-Month Exclusive Deal on Evergreen Properties
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