The plan to renovate Trowbridge Plaza has been updated to give the developer a bigger tax break. The proposal presented to the council by the project’s main developer in May has turned out to be inaccurate, with the construction costs being higher than expected.
The Trowbridge Plaza is one of the oldest shopping centers in East Lansing and the idea of a renovation has been floating around for awhile. The proposal calls for the renovation of existing buildings, a new parking lot, and the biggest addition, the construction of a five-story mixed-use building.
The proposal approved by the council was for a 50 percent tax increment financing capture. In simpler terms it is a public financing method where property taxes increase. However a mistake in the planning has been found as the costs of the project are now expected to be higher than originally thought.
“The developer originally came to us and said they had this project planned for the area and that it was not financially viable, so we were able to use are Brownfield redevelopment authority tools in order to set up a Brownfield plan for the developer that would reimburse them for some of their eligible expenses,” East Lansing economic development administrator, Lori Mullins states. “There were some errors made and some things that required changes to the project that change the economics after that plan was approved. The developer came back to us and said that this isn’t enough to meet the needs of the project to make it viable.”
The original plan called for 50 percent of the taxes collected to be distributed to taxing jurisdictions such as the school district and city of East Lansing, while the other 50 percent of the taxes are used to reimburse the developer. The new proposal instead calls for 65 percent of the taxes to go to the developer, with only 35 percent going to the taxing jurisdictions over the course of the next 16 years.
The proposal met a mixed reaction by members of the community and council.
“Like most cities in Michigan, East Lansing has a budget crisis,” Council member Ruth Beier states. “Last night, the developer asked for an increase in the tax break from 50 to 65 percent on the grounds that his profits would not be high enough at 50 percent. I am embarrassed to say that the majority of council agreed with the developer and voted to approve the change. It is clear to me that the majority of council puts the interests of developers ahead of the interests of city residents, and that makes me pessimistic about the future of the city.”