City Council defers frat house vote

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Members of the Lambda Chi Alpha fraternity delayed the fate of their 128 Collingwood Drive home as the East Lansing City Council referred the issue to the city’s Historic District Commission on Tuesday during its meeting at City Hall, 410 Abbot Road.

The referral was made to ensure the site plan to convert the home into 15 high-end apartments meets city code.

The site plan calls for an addition to the structure’s rear, which cannot be visible from the street in accordance with a historic district ordinance. Councilmember Nathan Triplett said he was not comfortable with the proposed plan based on photographs provided by Lambda Chi Alpha fraternity members.

“There’s been a lot of discussion about the fact that it’s in a historic district,” Triplett said of the 83-year-old, Tudor-style fraternity home.

“It’s unclear based on the photos and discussions tonight whether the site plan conforms to the requirements of the ordinance.”

The Historic District Commission, which informally reviewed and approved the site plan last week, will offer a formal recommendation at its April 12 meeting. The issue will then go before City Council at its April 20 meeting.

Both Lambda Chi Alpha Properties Inc., or LCAP, which owns the home, and developer Dale Inman have signed a binding contract authorizing the home’s purchase, and it could only be a matter of time before a deal is finalized.

Inman said he and partner Michael Dowdle have worked with city staff to ensure the site plan was up to code, and despite his disappointment Tuesday, Inman said he believes the site plan will move forward.
Dan Shupe, Lambda Chi Alpha chapter president, said the fraternity has considered going the legal route to block a sale, but it currently is searching for a new residence.

Councilmember Kevin Beard, who said Tuesday’s decision “bought them a little more time — that’s it,” said he wouldn’t be surprised to see the dispute in court. He noted correspondence from LCAP and the fraternity’s local housing corporation differ in the accounts and responsibilities for both parties.
The local housing corporation owned 128 Collingwood Drive until 1993, when it sold the property to the national fraternity, which had begun purchasing several fraternity homes. Under the agreement, the local housing authority had through 1997 to repurchase the home, after which the national fraternity could sell it.

In 2007, the chapter was informed by LCAP — which allegedly purchased the home in 2003 from the national fraternity, although Shupe said the deal was backdated from 2009 and breached contract because the fraternity was not officially offered first right of sale — that the organization planned to sell the home unless the local chapter bought it back for $806,000.

The local housing authority, however, claimed the property went into neglect when national leadership changed through the years, and LCAP was unresponsive to the local chapter’s needs. This prompted the fraternity to hire NAI Mid-Michigan, a local commercial real estate firm, to assess the house.
According to the local housing corporation’s correspondence, that value was between $300,000 and $350,000, amounting to a nearly $500,000 difference than what LCAP expected for the property.
LCAP said $300,000 was “substantially below” the home’s mortgage value and would have required LCAP to find outside funds to complete the sale.

Inman said, however, he was close to a contract with LCAP in summer 2009, when he said LCAP unexpectedly went back to the local fraternity to see if it could purchase the home.

A court battle probably still would not be solved before the fall semester begins, which means Lambda Chi Alpha members still could need a new home.

“Right now we’re in the process of working to find another large house in the community,” Shupe said. “Right now we’re willing to rent, but we haven’t been able to find any to rent-to-purchase.”

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