With one month left until the site plans and special use permits for City Center II expire, the project’s developer still owes tens of thousands of dollars in property taxes to East Lansing, keeping the project from progressing.
The City Council cannot vote to renew the site plans unless the taxes are fully paid by the Dec. 17 deadline. If taxes aren’t paid by then, the months-long process of creating the site plans must start from the beginning.
Although city officials said they are confident the developer, Strathmore Development Company, will pay the about $87,000 it owes before Dec. 17, they said they don’t plan to abandon the project if the taxes remain unpaid.
For now, they’re waiting to make any moves.
City Center II is a $116.4 million mixed-use project slated for the corner of Abbot Road and Grand River and Evergreen avenues.
Since City Council told Strathmore in late September it would not grant any further extensions on the project unless Strathmore paid all taxes owed to the city, Strathmore has paid about $41,000 of the $129,090.23 it owed in summer 2009 taxes on the seven properties it owns slated for City Center II. Since then, no further payments have been made, East Lansing Treasurer Jill Martinez said.
Strathmore would need to pay all taxes and request an extension on the project by Dec. 17 to avoid having the site plans expire.
If the company is unable to pay its taxes before Dec. 17, council cannot vote to approve any site plans, permits or agreements pertaining to the project because of a clause in the city code, which states council cannot enter an agreement with anyone in debt to the city.
East Lansing Director of Planning and Community Development Tim Dempsey said Strathmore, city officials, Huntington National Bank — Strathmore’s financial backer — and private financers have discussed payment plans for the taxes. Dempsey said he feels confident Strathmore will fully pay the taxes before the deadline.
“We’ve had contact with Huntington and we’ve also been talking to the developer, so we know there’s negotiations going on,” Dempsey said.
Strathmore President Scott Chappelle said the company is working toward paying off the taxes.
“We are working through the financing process and remain optimistic the project will move forward as planned,” Chappelle wrote in an e-mail. “Property taxes will be paid as part of this process.”
City Center II is not the only development on which Strathmore faces back taxes. Ingham County Treasurer Eric Schertzing said the company owes about $90,000 on more than 165 parcels in Aurelis Township.
Dempsey said approving the City Center II project the first time took about six months. If Strathmore fails to pay its taxes before Dec. 17, Dempsey said he is unsure how long resubmitting the site plans might take. Because not all of the components of the plan would need to be resubmitted, he said he doesn’t expect it to take as long.
He said the city will wait until taxes are paid to decide the project’s fate.
The city owns several properties slated to become the site of the City Center II parking structure. For now, those properties will remain undeveloped unless City Center II moves forward, Dempsey said.
“To justify a ramp of that size, we would definitely need a project to move forward,” he said.
Despite the uncertain future of the project, Dempsey said city officials and Strathmore have been discussing altering its design to convert living space to office space. The discussions arose because of the growing number of technology-based companies moving into the area and the success of the East Lansing Technology Information Center, 325 E. Grand River Ave.
“There is a growing recognition that we’re developing a technology cluster (in East Lansing) and we want to be able to build on that,” Dempsey said.
Dempsey said Strathmore seemed responsive to the idea of expanding office space.
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