Ingham County reluctant, but Red Cedar developer presses on
Lansing developer Joel Ferguson stays firm on belief his team will present county officials an impressive financial plan in "two to three weeks." Public funding through city is also an option.
A proposed $300 million mixed-use project at the former Red Cedar Golf Course faces an uncertain future.
LANSING -- Ingham County's top financial official has advised the Board of Commissioners that selling at least $35 million in bonds to support development at the former Red Cedar Golf Course is too risky. The developers, meanwhile, say they can create a plan that covers any perceived risks.
Tim Dolehanty, the county's controller/administrator, wrote in a letter this month that the county could put itself at risk if it helped fund the $380 million Red Cedar Renaissance project because it would not have "ancillary resources" to supplement any shortfall in property taxes needed to pay off the debt. The letter, dated Oct. 6, was addressed to Bob Trezise, president and CEO of the Lansing Economic Area Partnership.
"I don't have the authority to stop anything," Dolehanty said on Friday. "But as their principal policy advisor, I would like to think my suggestion would carry some weight."
Any bonds needed for the project would require a special taxing district to be established for the properties built at the development site. Property taxes from that district would be used to pay off the bonds.
Dolehanty told the Lansing State Journal on Friday the county still had not received a financial plan for the project, which the county requested in August. He's concerned that if the county sold the bonds then it would not be able to protect itself legally and financially if the developer or any of its tenants won appeals from the state to reduce their property tax assessments.
"If there are no taxes to capture, then the county is obligated to pay," Dolehanty said. "We just can't take that risk." Dolehanty's letter mentioned that "informal discussions and media reports" suggest the total cost of public infrastructure for the project ranges from "$35 million to $45 million."
The city still owns the former golf course property and recently extended its purchase agreement with the developers to Feb. 28.
Dolehanty said he hasn't received word from any Ingham County commissioners that they support the bond proposal since he wrote the letter. It's unclear if Lansing officials, including City Council members, would be willing to approve city-issued bonds to help fund public infrastructure for the project.
Mayor Virg Bernero said Friday in a statement that issuing city bonds for public infrastructure related to the project "has always been on the table." He also expressed optimism the project will succeed. Bernero described the project as "a vitally important project that will create jobs, bring new residents to the city and have a transformational impact on the Michigan Avenue corridor."
"When the developers bring forward their final proposal, we will work hand in hand with LEAP to conduct our due diligence and move forward from there," Bernero said.
Randy Hannan, Bernero's executive assistant, wrote last month in an email to the LSJ the county bonding option would "save millions of dollars on the long-term debt service."
Moody's Investor Service's credit rating for Ingham County general obligation bonds is AA2 (considered high quality) compared to Lansing's A2 (upper-medium grade), the LSJ reported last month.
Lansing, meanwhile, has hopes of moving out of its outdated City Hall. Bernero has pushed for a new county jail in the city and holds hope of incorporating facilities for Lansing's 54-A District Court and Police Department, although county officials are reluctant to move the jail from Mason. Both of those efforts would require city spending.