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Coalition says state could lose billions in Fairgrounds investment

***UPDATE: The Michigan Land Bank has advanced the Magic Plus, LLC proposal and will begin contract negotiations and develop a timeline to nail down milestones or the project, which is expected to have quick turn around.

The MLB voted Feb. 8 to advance the 500,000 square foot, $120 million proposal, which includes an entertainment complex and retail stores.

“The revitalization of this blighted property will help create jobs and have a sustained, positive economic impact on Detroit and the entire region,” said MLB Board of Directors Chair Deborah Muchmore. “Today represents an important step forward in the MLB’s process and an exciting opportunity for Detroit.”

The vote enables the MLB to enter into negotiations of a Development Agreement with Magic Plus, LLC to ensure the property is developed successfully. Binding contracts will also require the developer to meet certain benchmarks, with penalties established for failing to meet them. Once the development agreement is finalized, the MLB Board of Directors will vote whether to officially transfer the state fairgrounds property to Magic Plus, LLC.

For full background on the proposal and the State Fairgrounds development story, read below.

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DETROIT — While the Michigan Land bank is considering the approval of a theater and retail complex proposal in Detroit, one group is organizing and taking a stand against what they call a wasteful development.

The site in question is the 157-acre State Fairgrounds owned by the Michigan Land Bank Fast Track Authority and located at the northern most part of the city just east of Woodward Avenue and south of 8 Mile Road.

Representatives from the State Fairgrounds Development Coalition are currently promoting and arguing for their proposal for the historic parcel and say their plan would be an example of transit-oriented development. It would ensure a walkable downtown-like area with retail and other amenities, but with a focus on being a transportation hub and an asset for future generations living in the region.

The Coalition says their propsoal, called METAExpo, aligns with Governor Rick Snyder's placemaking tactics to revive Michigan's cities, and could generate billions of dollars of transit-oriented investment in the long term. They are requesting the MLB rethink the land use strategy for the historic site, thereby altering the request for proposal requirements, making transit and walkability at the bid’s core.

While the group lacked the funds and financial liquidity to officially submit their proposal to the MLB, the group of advocates and architects hope to at least collaborate with the site’s tentative developers and project managers, which include Earvin “Magic” Johnson, and the management company Redico LLC.

Luxury theaters and retail

The state issued its RFP in May 2012, just after Snyder gave control of the state-owned property to the MLB under Public Acts 74 and 75 of 2012, seeking an expedited development effort. The MLB said the sale price of the land will be determined by a formula that calculates job growth, tax revenues gained through the development and other factors.

The MLB's Executive Director Kim Homan said the State's decision to make the parcel open for private development was to sell it to a private entity, taking $1 million-a-year maintenance burden off of taxpayers as soon as possible.

The only proposal that passed the scrutiny of a state legal team was the proposal from Magic Plus LLC, the investment group that includes Johnson, Detroit entrepreneur Marvin Beatty and Michigan State University Board Trustee Joel Ferguson. They want to buy the former publicly owned State Fairgrounds for just $1.

Their proposed 500,000 square-foot development would include the construction of a luxury theatre and entertainment complex, with mixed retail, condos, senior housing and would incorporate an Amtrak station.

"Money doesn't give you good ideas, it just gives you money" said Sally Wenczel, a freelance journalist who spoke at a recent MLB hearing about the Fairgrounds.

The proposal also specifies, however, nearly 45 percent of the land would be paved for parking, although Detroit zoning ordinances mandate parking requirements via formula and depending on its zoning classification. (Kind of like how Dan Gilbert's Z-shaped parking garage has the amount of retail space it does.)

The RFP, notably, was issued before legislation passed that established a regional transit authority, and when the thought of regional transit development was still a distant idea, if not an unattainable dream.

And while some will argue all day that transit developments are better than big box stores, Coalition members say what makes the land special is that it's all one contiguous parcel, it has historic designation, and has the “unique opportunity to connect the city and suburbs with a thoughtful plan.”

Magic Plus and Redico have said they are willing to review ideas being brought forward and have met with the Coalition once so far.

Big Box Syndrome

The State Fairground land is adjacent to the Gateway Marketplace development, which broke ground in May and when completed will boast a Meijer supermarket, fast food restaurants, and retail along 8 Mile Road.

Some residents at a MLB public hearing said they're not wholly opposed to the Magic Plus proposal, but it could much better embrace mixed-use and transit developments. Other residents outright opposed the plan, saying there are just too many big box stores already and the development feels like a strip mall.

As private investors developing on to-be private land, they are not obliged to comply with pedestrian friendly and green building standards.

"Money doesn't give you good ideas, it just gives you money" said Sally Wenczel, a freelance journalist who spoke at the hearing.

She said Magic Johnson Enterprises, the LLC's parent company, at one point engaged in a partnership with Best Buy seeking to "strengthen the urban market presence and deepen relationships with multicultural customers" but some of those stores, as well as many of Johnson's theaters around the country, have closed.

So while the land bank can factor in job growth and gained tax revenues when considering the final sale price of what Homan called "the most important piece of land in southeast Michigan," they cannot take into account the potential loss of those same jobs and revenues if the theater or retail spaces ever close, let alone lost time and other development opportunities.

Best Practices

Architect Mark Johnson, who helped author the META proposal, said real mixed-use buildings create dense and vertical developments, encourage foot traffic and are a good use of land.

"Mixing use," he said, which is outlined in the Magic proposal, “is different than ‘mixed-use.’ It just lays out single-use buildings one must drive between." Johnson said the Magic proposal includes no provisions for complete streets or other transit-oriented developments aside from the Amtrak station.

Jim Casha said while the MLB is poised to sell the parcel to Magic Plus LLC for $1, they're missing out on potentially billions in turnaround and transit investment in the decades to come.

"This [land] could be an economic engine for the city," said Frank Hammer, a member of the recently formed State Fairgrounds Advisory Committee. "The [Magic Plus] proposal won't give us that. The job component was underwhelming. It's cookie cutter and is not anything specific to Detroit or the region. … This site could transform the region."

Coalition member Jim Casha said that while the MLB is poised to sell the parcel for $1, they're missing out on potentially billions in transit investment in the decades to come. He cited Cleveland, Ohio's HealthLine Project, which has seen $6 billion in investment along the city's bus rapid transit corridor.

"This is one big piece of land that's ready to go for transit," said landscape architect and Coalition member Kenneth Weikal. "There's a big nothing from Highland Park to 8 Mile and [the Magic] proposal basically says this land has no value."

Detroit Future City?

The RFP was issued before the Detroit Future City framework was released, which outlines and identifies techniques to create useful, public places that provides amenities and attracts people. The Detroit Economic Growth Corporation, which is resposible for the framework's execution, said they weren't ready to make a public comment about the land sale or development at this time.

The RFP was also issued before the state established the Regional Transit Authority, which would coordinate transit development efforts in the region.

The MLB could make changes to and reissue the RFP but Homan said the state is unlikely to do so because they would like to see the land developed quickly.

"Our goal was to keep it as open ended as possible to let people be really creative. We won't let this development be run-of-the-mill," she said. "It has to be very unique — it's critical."

She said they would like to work along any guidelines or development strategies the RTA may want to provide, but they don't have time to wait for those suggestions.

"I think the Fairgrounds will play a role in that anyway," Homan said.

Weikal disagrees.

"True transit-oriented development can bring a much higher quality of life, and it's walkable and more sustainable environmentally and economically," Weikal said. "Unless the state mandates it, there doesn't seem to be much will on the developer's part to comply with these requests."

The future of the fairgrounds is essentially in the hands of the MLB and how they vote on the proposal. Their next scheduled meeting isn't until March, but whether or not they'll call a special meeting has yet to be determined.

Homan said any action the MLB takes would be to simply further the negotiation process and to develop a concrete timeline and milestones for planning and construction and would enable the Coalition to sit down with Redico and share ideas.

"The META plan is great and there are some very interesting concepts, they just don't have any money," Homan said. "They do have a great open door to the developer, however, and I think that's pretty unique and is another reason we'd like to drill down and put things on paper."

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