MSF Denies Incentives For Ferguson-Backed Red Cedar Development

A state board, in a special virtual meeting today, rejected a request for incentives to back a Lansing redevelopment project tied to the developer and prominent Democratic donor Joel FERGUSON.

A majority of the Michigan Strategic Fund (MSF) Board voted to reject the $32.4 million in tax capture to reimburse activities estimated at $97.3 million to support the redevelopment of the Red Cedar Golf Course in Lansing.

Despite objections from Lansing-based MSF Board member Paul GENTILOZZI and Sen. Curtis HERTEL Jr. (D-East Lansing), who urged the board to table the item, MSF Board Chair Mark BURTON moved to reject the Red Cedar incentives. MSF Board member Ron BEEBE had requested to rescind the motion.

The vote to reject the incentives was approved by everyone except for Gentilozzi and Beebe, who voted no, and Brittany AFFOLTER-CAINE, who abstained. The board met virtually via conference call because of the COVID-19 outbreak and Gov. Gretchen WHITMER's exhortation to the public to avoid gathering in person.

Hertel addressed the MSF Board during the public comment portion of the meeting, saying, "This issue has nothing to do with the developers. It has everything to do with our local community."

Ferguson is facing some pressure from within the Democratic Party to not pursue reelection for his spot on the MSU Board of Trustees (See "Ferguson Future At MSU On Thin Ice," 2/28/20). His statements and his response to the Larry NASSAR situation have rankled some in the Democratic community.

It's unusual for the Michigan Economic Development Corp. (MEDC) to present the MSF Board with a recommendation to deny a requested incentive for a project. However, according to an MEDC memo, the law required action on this item by April 11 or it would have been automatically approved.

Burton cited a "lack of transparency" with the Red Cedar project throughout the process of working with the developers.

According to the MEDC, the submitted work plan didn't include enough information to define the final scope of the project or the resulting financial gap. It also lacked details on the project's regional benefits.

The MEDC also said it didn't comply with guidelines on allowable costs and was not "consistent with the state economic development priorities."

Yet, Gentilozzi argued the MSF Board's rejection of the Red Cedar project would fly in the face of what the local community wanted, citing Hertel and Lansing Mayor Andy SCHOR as favoring the development.

Gentilozzi also said the MSF manager was calling board members and urging them to strongly reject the approval of the project.

"There's so much disinformation and misinformation and bad treatment of this project," he said.

Hertel said not approving the incentives for Red Cedar would be "a huge issue for us" and that the recommendation to deny was a "surprise to many of us in my community."

Bob TREZISE, president and CEO of the Lansing Economic Area Partnership, said he didn't find out until Wednesday afternoon that there were "additional concerns" from the MEDC on the Red Cedar project.

Trezise said the Red Cedar project is similar to a lot of other brownfield properties and noted that it's more than shovel-ready – the project broke ground in October 2019.

He also said this comes during a time where people are losing jobs because of the COVID-19 crisis, and that approving the incentives would make sure "hundreds of workers" have jobs for at least the next 18 months.

Frank KASS, principal of Continental Real Estate and part of the development team for Red Cedar along with Ferguson, said in his 45 years of developing, he's "never seen a process that has been as unwelcoming and not open to a developer as this has been."

Christopher STRALKOWSKI, executive project manager for Continental/Ferguson, said in response today the Red Cedar project would create more than 1,000 jobs during construction, and according the Anderson Economic Group, with more than a $500 million economic impact over the next 30 years, "this project is too important to not be successful."

"Continental/Ferguson remains committed to Lansing, the region and state especially at this extremely difficult time dealing with the COVID-19 crisis," he said in a statement. "The development team will continue to work with all stakeholders to make this $275 million project successful."

An MEDC official noted the incentive request could always be resubmitted. The agency also said the denial doesn't prevent the local brownfield authority’s ability to move forward with its partial financing of the project.