Published June 8th, 2008

Hotel dispute: Lansing, Lansing Township can find an equitable agreement

Full Article: http://www.lansingstatejournal.com/apps/pbcs.dll/article?AID=/20080608/OPINION01/806080627/1085/OPINION

Further investment in the Eastwood Towne Center site has Lansing and Lansing Township officials on opposite sides - again.

At immediate issue is the idea of a $100 million complex of hotels, conference rooms and water parks. At heart, the dispute is the same old one: The future of a community separated by political lines drawn ages ago.

And, again, the best policy is one of continued negotiation, continued engagement, continued exploration of what steps each government can take to best advance the region's interests. David Hollister and the Prima Civitas group have been working to foster talks, more of which should occur without delay.

To the passing eye, the hotel proposal appears exciting. Two more hotels in the north-central part of the metro area, conference rooms, an indoor water park and an outdoor water park.

Investment is investment. More lodging choices rightly earn rapt attention. A Great Wolf Lodge-style year-round water park - who wouldn't want that?

But ...

As is typical with big proposals, the questions crop up in the details, particularly the finances.

The largest is the one of initial financing.

When Lansing Township officials outlined a hotel/conference/entertainment project to the LSJ Editorial Board earlier this spring, it was presented as a matter of letting the marketplace work.

Hotel firms and developers were eager to get in, all the township had to do, really, was get out of the way - ensuring zoning, utility and regulatory issues were squared away.

Businesses don't target locales where money won't be made. Everyone wants some of that.

In recent weeks, though, the story line has changed.

The township, itself, through its Downtown Development Authority, may have to consider issuing bonds to bolster the project. Under this scenario, Lansing Township would become a partner, a subsidizer, in the project.

That story line carries much more doubt. Yes, governmental assistance, via tax abatements and property improvements, is commonplace these days. The city of Lansing, which is so upset right now about this hotel idea, routinely offers up tax assistance to businesses and developers within its boundaries.

But the financing here, like so much with Lansing Township, would have an unusual history. The township claimed the Eastwood area under its Downtown Development Authority - a taxing and public improvement idea originally enacted by the state to help revive decaying urban cores.

At Eastwood's creation, the township fought with the county, Lansing Community College and the Capital Area District Library over the taking of taxes meant for them. Those groups said they had the choice under the law on whether to agree to tax diversions; the township argued that under the old version of the downtown development law, it alone decided. An agreement eventually was brokered, but a sour taste - a loss of trust and cooperation - resulted.

The city of Lansing also has a legal history with the township over Eastwood. Mayor Virg Bernero's administration is not the first to see Eastwood as detrimental to Lansing's interests; this hotel dispute is the latest manifestation of the argument. Lansing sees new hotels and conference space damaging the publicly subsidized Lansing Center

And even a consultant hired by the township admits in a report that new hotels at Eastwood would trim occupancy rates at other Lansing-area hotels - at least in the short term.

Lansing Township and Lansing officials have responsibilities to their constituents. But that responsibility extends to the health of the entire region.

Lansing Township is wise to pursue private investment. But the township board should be most hesitant to spend public dollars unless absolutely necessary. Private dollars drive growth. Public dollars should simply help guide it.

The city of Lansing is being responsible in questioning the larger impacts and the use of government aid. The key is for everyone to keep talking. Lansing and the township need to strike a deal to share the benefits without hurting the core city. It is possible. And it would benefit the entire region.

Monday's LSJ: Why can't Lansing and Lansing Township get along?