Plans to redevelopment the ailing Lakeside Mall into a mixed-use development advanced Tuesday night when Sterling Heights City Council approved a deal with the mall’s landlord.
Board members approved by a 5-2 vote a memorandum of understanding with Lakeside OOTB Ventures, LLC., a subsidiary of mall owner Lionheart Capital, for its nearly 110 million dollar mall site transformation plan. acres on Hall and Schoenherr roads into a development to include residences, restaurants, retail, parks, a hotel and offices.
Mayor Michael Taylor, Pro Tem Mayor Liz Sierawski and council members Michael Radtke, Maria Schmidt and Barbara Ziarko voted yes to the deal. Board members Henry Yanez and Deanna Koski voted no.
“It’s an incredible, unique and dynamic project,” Taylor said Tuesday. “It will be something that I think this community will be known for for years and years to come.”
Officials said the project is expected to provide around $1 billion to the region over the next decade.
Lionheart Capital’s “Lakeside City Center” plans to bring more than 2,800 multi-family apartments, including 750 senior housing units. The development will also include nearly 150,000 square feet of retail and restaurant space, 60,000 square feet of office space and a 120-room hotel. Macy’s and JCPenney will remain during and after construction.
This is just the start of the site redevelopment process, officials said, with public hearings and site plans expected to be presented to the city’s planning commission and city council.
Demolition of the mall is not expected to begin until late 2024, officials said. The infrastructure is expected to be completed by 2027, along with some of the multi-family housing.
Luke Bonner, the city’s senior economic development adviser, said the project will seek tax-raised funding to cover infrastructure, such as roads, water lines and sewers. Lionheart Capital plans to donate about 30 acres in Sterling Heights for parkland, streetscape and infrastructure, officials said.
The city estimates that after a 20-year expiration of the TIF, the project would generate $5.2 million in tax revenue per year, compared to $375,000 per year if the site is not redeveloped. Residents would not see an increase in their taxes, officials said Tuesday.
The city is expected to seek a 25-year, $45 million bond to fund the development’s public spaces, land that would be ceded to the city. Yanez cited the link for his opposition to the project.
“Why do we help fund private enterprise? ” he said.
Taylor said tax revenue generated from the development would repay the bond. He said as a backup, Lionheart Capital would make a special assessment to repay the bond.
“There will be about a five-year delay for the TIF before bail payments are made,” Taylor said.
Allison Greenfield, principal and chief development officer at Lionheart Capital, said the $45 million bond and a public-private partnership are key to the project.
“It’s a heavy burden,” she said. “As you all know, we’ve been working on this for a few years already. There’s a lot of things that go into making something like this successful.”
City manager Mark Vanderpool said a shopping center redevelopment plan had been in the works for seven years with the creation of a sustainability master plan for the site. City officials visited 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.
“It can appeal to anyone who wants to live there,” she said. “I think the more people are invested in their community, who would be the landlords, as opposed to the tenants, not that the tenants are bad and don’t invest in their community. But I believe the landlords are more invested than the tenants. tenants.”
Greenfield said it was too early to tell if single-family homes would be financially viable for development.
Ziarko said she also thinks the project is too dense and older people wanting to downsize will want to buy their house, not rent it.
“We have a housing shortage,” she said. “We don’t have a shortage of deteriorating malls in Michigan. They’re everywhere. It’s 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 make it real.”
Ziarko said speculation over the redevelopment of the Lakeside Mall has drawn additional businesses to the Hall Road corridor. She noted the arrival of Total Wine in the old Toys R Us building nearby.
Councilman Michael Radtke said he was in favor of the density level of the project.
“Density creates retail,” he said. “Not the opposite.”
Lakeside Mall is the latest mall being transformed as mall owners and retailers seek to attract shoppers amid rising online shopping. Moody’s Analytics predicts that 20% of the 1,000 malls in the United States will remain malls, but will also have “a diverse set of attractions beyond conventional department store anchors.”
Built in 1976, Lakeside lost flagship stores Sears in 2018 and Lord & Taylor in 2019. Lionheart Capital bought the mall in late 2019. City officials at the time said they knew the company had intend to extend ownership beyond commercial use.