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Business leaders seek state budget boost to resuscitate downtown Lansing

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Downtown Lansing appears in a file photo.

Mid-Michigan business leaders hope the next state budget will come with a funding boost to resuscitate downtown Lansing.

The state of Michigan is one of Lansing’s biggest employers. But, in part because of remote work, the state has cancelled about 150,000 square feet of downtown lease space since the pandemic began, according to a spokesman for the Michigan Department of Technology, Management and Budget.

The impact has been devastating, said Bob Trezise, who leads a regional development agency called the Lansing Economic Area Partnership.

“Downtown Lansing is ground zero for pandemic impact in the entire state of Michigan," Trezise said. "It is suffering in ways that really I don't think anyone else is and we have to have a really robust downtown for the region to succeed.”

LEAP is asking state lawmakers to set aside $325 million in federal pandemic aid from the American Rescue Plan Act to help developers convert empty office space into housing in downtowns across Michigan.

"It's extremely expensive for a developer, business owner [or] building owner to convert their maybe high-rise downtown building from office to residential and this proposal would be gap financing," Trezise said.

To qualify, developers would need to dedicate at least 30% of the project to affordable housing, according to a copy of a proposal provided by Trezise. Projects would have to be under construction by 2024 and completed by 2026.

Trezise says he's optimistic about the proposal's reception so far.

"Our coalition is strong," he said. "But, of course, there's about a million people asking for a lot of money out of the ARPA money."

State legislators are debating the budget now and will vote on it before the next fiscal year begins Oct. 1.

During a presentation to the Lansing Regional Chamber of Commerce Wednesday, Gov. Gretchen Whitmer indicated she is generally supportive of boosting money for downtowns like Lansing's.

"Let's try to get some more resources for downtowns that have been disproportionately impacted by big employers not being able to resume in person." Whitmer said.

The governor recommended a $74 billion total spending plan to lawmakers earlier this month. It would be the largest budget in state history, fueled by a growing surplus and a massive influx of federal relief money.

Groups including LEAP, Lansing's Regional Chamber of Commerce and the Greater Lansing Convention & Visitors Bureau want Downtown Lansing, Inc. to get $5 million of that windfall.

They're requesting the funds to help the organization with endeavors like hiring more staff, giving grants to small businesses and enhancing outdoor, socially-distanced seating.

The intent is to create a business district that's alive after five, the hour each weekday evening when many state workers drive away from the capital city.

"Our organization is working triple time to redesign a downtown that is not just reliant on state workers or lunchtime workers, but 24/7 residents, workers and the city, the public of Lansing as a whole," said Julie Reinhardt, DLI's business outreach and program manager.

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