Lansing Township sued for $13.8 million over Heights in Eastwood

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LANSING, Mich. — The estate of developer Michael Eyde is suing Lansing Township for $13.8 million over unpaid debts related to The Heights at Eastwood.

That’s a significant amount of money for a township of about 8,000 people and an annual budget of $4.3 million, and officials are still figuring out what the township might ultimately owe and how it might pay.

The Heights at Eastwood is an 88,000 square foot luxury apartment and retail space adjacent to Eastwood Towne Center. Lansing Township supported the development in 2010, an odd investment for such a small township.

The township also agreed to a 99-year ground lease with Eyde with annual payments starting at around $1 million and reaching over $5 million.

The plan was that the tenants would bring in taxpayers’ money, replacing the revenue the township derived from automobile factories.

“Their optimism was real,” said Ingham County Treasurer Alan Fox, who works with the township on financial issues, including the Heights’ debt. “They had a basis for it, but didn’t go as they had hoped.”

But The Heights ultimately never found enough tenants for the township to meet its obligations, according to the lawsuit.

In 2016, The Heights had never even reached 30% occupancy. The companies leasing the space went bankrupt, and at least one later sued the township.

The township and the Downtown Development Authority sold $30,000,000 of bonds to keep The Heights afloat.

In 2020, according to the lawsuit, Lansing Township owed $9.9 million. The building that was supposed to bring money to the township began to drain its budget instead.

“It’s one thing to go into debt to build the road or fix some of your infrastructure, which is the most common way governments use debt,” said Eric Scorsone, an economist at Michigan State University. “In this case, you’re doing something good and important… In this case, it’s quite different.”

FOX47 has been reaching out to township officials and attending their meetings for months.

We asked officials how this debt continues to accumulate, why, when they will talk about it openly and what will be done.

No one will speak.

“It’s not like it’s a secret that they’re in financial trouble,” Fox said. “It’s only a secret to people who haven’t paid attention to it.”

In 2021, Lansing Township residents got a clear glimpse of the repercussions with a special assessment that raised property taxes.

The township said the assessment was to fund police and fire departments.

“It’s a ball game,” Lansing Township resident Luke Sciberras said at a township meeting in December. “You take the cup, you transfer the money that would go to the police and the fire to other things… To pay off the bonds. Then you assess specially and say it’s the police and the fire. The reason why more money is needed isn’t because our police and fire department are bankrupt, it’s because there’s a big bond that’s coming due.”

And future increases seem almost certain.

“No matter what happens, the taxpayers of the township are responsible for the debt,” Fox said. on the debt. And the district attorney told them, “No. Then you are simply ordered to pay it and the court orders mileage to pay it. So that does not relieve taxpayers of the burden. »

The township has not paid rent for The Heights in Eastwood since April 2020. In March, township supervisor Diontrae Hayes suddenly quit and moved to Oklahoma. And recently, the township asked Alan Fox to look at their debt and help them come up with a plan.

In addition to the Eyde Estate lawsuit, the township also owes Walmart $1,750,000 in back taxes.

“Somehow the debts have to be paid,” Fox said. “The question is whether the canton can find additional sources of income? »

Sciberras said he wants the township to pay more attention to the agreement reached a dozen years ago.

As for debt, “it’s frustrating as a resident,” he said. “You don’t want to pay that.”

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