Lansing is moving to repurpose its downtown city hall, fulfilling a longstanding commitment to convert the aging building into a hotel.
The Lansing City Council voted unanimously Monday night to sell the facility at 124 W. Michigan Ave. for nearly $2.8 million. Chicago-based developer J. Paul Beitler is purchasing the building under a proposal to create around 180 hotel rooms along with a restaurant and retail space.
Officials have said the project would increase the city’s tax revenue and further development downtown. Hundreds of new apartments and a performing arts venue are set to be constructed nearby.
“I am thrilled that we can now move forward with a proposal that is another piece of downtown Lansing’s transformation,” said Lansing Mayor Andy Schor in a statement.
“I want to thank City Council for passing this resolution and helping to make this plan a reality. The redevelopment of City Hall, hundreds of units in new housing, a new City Hall, and the Ovation Center for Music and Arts are all pivotal to downtown’s future growth. Lansing’s time truly is now.”
Ahead of the vote, Lansing City Council Vice President Adam Hussain said the city had heard input from the public both for and against it.
“In terms of the folks that are in support, [there is] a lot of discussion on unlocking the commercial viability of this, bringing it fully onto the tax rolls and the like,” he said.
Beitler agreed to purchase and redevelop the building without seeking any public incentives.
The Capital City has long sought to repurpose the building across the street from the state Capitol. In 2017, former Mayor Virg Bernero selected Beitler’s hotel plan which would preserve the building structure and facade.
When Schor was elected as mayor that same year, he put those plans on hold as the city had not yet identified a site to relocate all other government operations.
Now, with a public safety complex under construction and plans underway to build a new city hall downtown on an empty Grand Avenue parking lot, Schor said the hotel plan can move forward.
Some residents and councilmembers have expressed concern with the nearly $2.8 million sale price, highlighting that estimates in previous years for the building’s cost were higher.
According to city officials, a 2015 appraisal put the value of the building at $4.2 million, while a 2021 estimate set the value at $3.5 million.
Schor said the city hall’s condition has worsened over the years, stating that when he took office, it would have cost the city tens of millions of dollars to overhaul the building, removing asbestos and other hazardous materials.
“The building worth has gone down,” Schor said. “The building is old and in bad shape and is about to get completely rehabilitated.”
It could be years before the hotel project is completed downtown. Once all city services are relocated elsewhere, the building’s ownership will transfer to Beitler. The developer aims to complete construction around 18 months after that, estimating that the hotel could open in 2027.