When Stonehouse Village III is completed, the city of East Lansing will purchase the parking structure below it for $2.7 million.
Construction on the structure is expected to begin in mid-June, said Tim Dempsey, East Lansing's community and economic development administrator.
The East Lansing City Council approved a land contract between the city and developer Cron Management on Tuesday.
The city expects the structure to generate between $120,000 and $125,000 a year, Dempsey said.
"It's one of the final pieces in putting the whole transaction together," Mayor Pro Tem Vic Loomis said.
Stonehouse Village III will be located in what is now Lot 7, behind Taco Bell on Grand River Avenue. The plans call for a building with a two-level parking structure underneath and 36 condominiums on top. Stonehouse Village I was completed during summer 2006 and funding for Stonehouse Village II was eliminated in February.
Cron Management will construct the parking structure and condos at the same time.
Once the entire project is complete, the city will purchase the lower parking portion, Dempsey said.
The structure will have approximately 130 parking spaces, with 20 available for public use, said Dan O'Connor, East Lansing's parking administrator.
The remaining spaces will be reserved by permit for residents of the development.
Theta Delta Chi, 139 Bailey St., was demolished this week as part of the project. It will be used as an area to house construction materials until the development is complete.
Afterward, it will become an expansion of Lot 11, which will increase the number of spaces in the lot from 72 to 130.
The fraternity house was sold to Cron Management in March 2006. The fraternity's new location will be 445 Abbott Road.
Local businesses view the razing of the house and subsequent increase in parking as beneficial.
"It's better for our business," said Mike Zietlow, manager at Fast Repair and Gaming Center, 543 E. Grand River Ave.
"There's more space for parking and it opens up our business."
F.R.A.G. is one of several business whose customers use Lot 11.
Loomis said bringing condos into the downtown gives people an opportunity to own their own housing in the downtown that apartments and homes don't necessarily offer.
The Stonehouse Village developments are part of a plan the city has been working on for a number of years.
Its goal is to bring alternative housing into the downtown, he said.
"Mixed use is good," Loomis said.
Insomnia Cookies, 603 E. Grand River Ave., and Taco Bell, 601 E. Grand River Ave., share the lower level of Stonehouse Village I. The upper levels contain apartments.
Loomis said a stronger downtown makes for a stronger community.
"The heart of a community is its downtown, so anything we can do to make a better, stronger, more vibrant, more attractive downtown for all the residents of the city will make the city as an entirety better, stronger and more attractive." he said.
Sarah Norris can be reached at norriss3@msu.edu.
