Lakeside Mall redevelopment gets thumbs-up from Sterling Heights council
Posted By: The Detroit News on November 1, 2022. For more information, please click here to read the source article.
Plans to redevelop the struggling Lakeside Mall into a mixed-use development moved forward Tuesday night when Sterling Heights City Council approved an agreement with the shopping center’s owner.
The council approved, by a 5-2 vote, a memorandum of understanding with Lakeside OOTB Ventures LLC., an affiliate of mall owner Lionheart Capital, for its plan to transform the nearly 110-acre mall site at Hall and Schoenherr roads into a development to include residences, dining, retail, parks, a hotel and office space.
Mayor Michael Taylor, Mayor Pro Tem Liz Sierawski, and council members Michael Radtke, Maria Schmidt and Barbara Ziarko voted yes on the agreement. Council members Henry Yanez and Deanna Koski voted no.
“This is an incredible, unique, dynamic project,” Taylor said. ” That is going to be something that I think this community is going to be known for for years and years to come.”
Officials said the project is expected to provide an estimated $1 billion to the region during the next decade.
Lionheart Capital’s “Lakeside City Center” expects to bring more than 2,800 multi-family apartments, including 750 senior housing units. The development also will have nearly 150,000 square feet of retail and dining, 60,000 square feet of office space, a 120-room hotel and a park. Macy’s and JCPenney will remain during and after construction.
“We are honored to be working with the city of Sterling Heights to help breathe new life into an area that has been underutilized for decades, and in so doing, create thousands of new jobs,” said Allison Greenfield, principal and chief development officer of Lionheart Capital, in a statement Tuesday night.
“Lakeside will provide a wide range of market-rate housing options for all demographics, from the young professional to the senior. Its location close to major thoroughfares yet away from residential zones will help to minimize traffic in single-family neighborhoods. We are proud to be part of a project that promotes the best in urban revitalization principles, while acknowledging the unique character and history of the Sterling Heights community.”
This is the beginning of the process for the site’s redevelopment, officials said, with public hearings and site plans expected to come before the city’s Planning Commission and council.
Demolition at the mall is not likely to begin until the end of 2024, officials said. The infrastructure is expected to be complete by 2027 as well as some of the multi-family housing.
“We are pleased to see the future of Lakeside Mall taking shape,” said Macomb County Executive Mark Hackel in a statement. “Hall Road is a vital economic corridor for all of Macomb County, and the continued transformation of Lakeside will lead to additional interest and investment in the corridor.”
Luke Bonner, the city’s senior economic development adviser, said the project will seek tax increment financing to cover the infrastructure such as roads, and water and sewer lines. Lionheart Capital plans to donate about 30 acres to Sterling Heights for a park, streetscape and infrastructure, officials said.
The city estimates that after a 20-year TIF expiration, the project would generate $5.2 million in tax revenue annually, up from the projected the annual $375,000 if the site isn’t redeveloped. Residents would not see an increase in their taxes, officials said Tuesday.
The city is expected to seek a $45 million, 25-year bond to fund the public spaces in the development, land that would be deeded back to the city. Yanez cited the bond for his opposition to the project.
“Why are we helping fund private enterprise?” he said.
Taylor said the tax revenue generated from the development would repay the bond. He said that as a backup, Lionheart Capital would set up a special assessment to repay the bond.
“There is going to be about five years of lead time for the TIF before the bond payments need to be made,” Taylor said.
Greenfield said the $45 million bond and a private-public partnership is critical for the project.
“It’s a heavy lift,” she said. “As you all know, we’ve been at this already for a few years. There’s a lot that goes into making something like this successful.”
City Manager Mark Vanderpool said a redevelopment plan for the mall is seven years in the making with the creation of a sustainability master plan for the site. City officials visited the Villa Italia in Lakewood, Colorado, in 2018, to see an example of mixed-use redevelopment.
Schmidt said the project as presented was too dense. She said she would like to see single-family homes in the plan.
“That can appeal to everyone who wants to live there,” she said. “I think the more people are invested in their community, which would be owners, opposed to renters, not that renters are bad and don’t invest in their community. But I believe that homeowners are more invested than renters.”
Greenfield said it is too soon to say if single-family homes would be financially feasible for the development.
Ziarko said she also thinks the project is too dense and that seniors looking to downsize will want to purchase their homes, not rent.
“We have a housing deficiency,” she said. “We do not have a deteriorating mall deficiency in Michigan. They’re all over the place. This is an opportunity. And I know it’s an opportunity and it’s very scary because we only have a chance to do this one, so we better do it right.”
Ziarko said that speculation of Lakeside Mall’s redevelopment has drawn additional business to the Hall Road corridor. She noted Total Wine’s arrival in the former Toys R Us building nearby.
Councilman Michael Radtke said he’s in favor of the density level of the project.
“The density creates the retail,” he said. “Not the other way around.”
Lakeside Mall is the latest shopping center in the pipeline for a makeover as mall owners and retailers look to attract consumers amid the rise in online shopping. Moody’s Analytics predicts that 20% of the 1,000 malls in the United States will remain malls, but also have “a diverse set of draws beyond conventional department store anchors.”
Built in 1976, Lakeside lost anchor stores Sears in 2018 and Lord & Taylor in 2019. Lionheart Capital purchased the mall in late 2019. City officials at the time said they were aware the firm had plans to expand the property beyond retail usage.
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