MIDDLE MARKET HIGHLIGHT, SEPTEMBER 2006

LANSING
Dan Marcec

Though most of the state of Michigan is struggling in economic development, Lansing has been able to stay afloat in several areas of the commercial real estate industry. Due largely to the fact that General Motors (GM) has chosen to maintain not one, but two manufacturing plants in the city, more than 2,200 automobile supplier positions will be added to the economy before year-end.

“There’s no doubt that when GM closed several of its 100-year-old assembly plants here in the city, Lansing differentiated itself from the other areas where GM had moved by employing a specific effort to maintain the company’s services,” says Robert Trezise, manager of the Lansing Economic Development Corporation.

Other than the GM plants that currently are underway, a brand new speculative industrial building is being developed by The Dart Group on Interstate 96 in the Midway Industrial Park. In addition, The Demmer Corporation is creating 400 new jobs, and the interesting thing about this company’s expansion is that it formerly dedicated 80 percent of its work to automobiles, yet now, in its new efforts, 80 percent of the company is focusing on non-auto projects. Another local company, Smart Office Systems, has landed several new contracts and is moving its remanufacturing furniture operations to another building in the city.

Across other sectors, BioPort, the only company in the world that makes the Anthrax vaccine, is building a new structure and adding more than 320 biotechnology jobs in the city. Neogen, another biotech firm, constructs all its plants in vacant schools, and it recently purchased a property to build a new location. Further, cyclotron-related biotechnology firm Niowave acquired a property in the city and is creating 100 jobs over the next 3 years.

“The industrial, biotech and high-tech sectors are three major points we’re trying to develop in order to diversify Lansing’s economy,” Trezise says. “All these projects have come online in the last year, and our new mayor Virgil Bernero is making economic development his major focus.”

According to Trezise, development in downtown Lansing is the fourth phase of the city’s economic strategy. Initial statistics show that the office vacancy rate may drop off by 20 percent. Four significant buildings currently are being rehabbed to make way for new projects that will have impact on the downtown sector as a whole. The Mutual Building, adjacent to the state capitol, is being redeveloped for the Christman Company’s corporate headquarters; the Hollister Building is undergoing a total rehabilitation, comprising 21 residential units, office space and ground-floor retail; the Ranney Building is an office redevelopment project, and it is already 100 percent leased; and the Arbaugh Building, which was totally vacant before the revitalization, is now a fully leased 48-unit residential property that also houses an engineering firm on the first floor. In addition, a new development — called the Stadium District Building — consisting of condos, apartments, office and retail space, is beginning construction across the street from Oldsmobile Stadium, where the Lansing Lugnuts play Class A minor league baseball.

“In the near future, we’re going to see a real influx of residential and retail development that doesn’t currently exist,” Trezise says. “We get caught up in the shadow of the doldrums that are affecting the state’s commercial real estate market, but with all the current activity, and with what is to come, Lansing is experiencing a major renaissance.”

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