Farnum Building, vacated by the Senate last year, is up for sale

LANSING — For the second time in a year, a downtown building across from the Capitol Building is up for grabs. 

The state is asking for proposals from developers for the Farnum Building, the former home of the Michigan Senate.

Early last year, the Senate moved into the nearby Capitol View building at 201 Townsend St. The move sparked controversy since Capitol View is owned by the Boji family, who are generous donors to Republican candidates. The Senate and Gov. Rick Snyder ultimately green-lighted the sale of the Farnum Building last summer. 

The building's sale comes on the heels of efforts to redevelop Lansing City Hall, just a block away. If both sites are successfully redeveloped, it could mean more housing, hotel rooms and retail space in downtown, development that city leaders say the area needs. 

“We think we have a really good opportunity to redevelop the space and put it to good use and back on the tax rolls,” said Bob Burns, director of the real estate division of the Michigan Department of Technology, Management and Budget. “I think the sky’s the limit with opportunities for this building."

Burns said the building attracted interest from developers even before it officially went up for sale. The state is selling the building through a request for proposals process. Submissions for developers are due May 15, and the chosen developer will be notified by June 1. The state is offering guided tours of the building to interested buyers in February and March. 

The Farnum building, at 123 W. Allegan St, was constructed in 1959. The ten-story office building is 94,930 square feet and comes with a 23-spot parking lot. In 2014, the building and associated parking lot was valued at about $5.6 million.

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The Senate early last year moved out of the Billie S. Farnum Building located at 125 West Allegan Street in downtown Lansing. The building offers amazing views of the Capital, high ceilings and open office space.

Apart from its prime location and great views, the building boasts tall windows and plenty of temporary walls, which makes it easy for developers to reconfigure the space, Burns said. 

"One of the things modern developers are looking for, no matter the building, is wide-open (space)," he said. 

While Lansing Mayor Andy Schor said he'd like to see a grocery store or additional retail space as part of the project, he believes any redevelopment of the site will be a step forward for downtown.

“We’re getting there. We’ve got all the tools," he said. “This is going to be exciting." 

In November, former Mayor Virg Bernero announced that Beitler Real Estate Services, a Chicago company, had been chosen to redevelop the current City Hall into a hotel. Beitler would also redevelop the former Lansing State Journal building as a new City Hall. Their plan was chosen out of four proposals the city received. 

“The proposal for the new hotel is a good proposal, but we have to figure out the pieces of the City Hall," Schor said. "We’re working on it. It's a priority right now."

Bietler's proposed hotel will be a big shift for the downtown area. The 256-room Radisson Hotel has been the only full-service hotel downtown since the mid-1980s.

While a non-compete agreement the Radisson had with the city that went into effect in 1985 didn't prohibit construction of a second downtown hotel, it did limit the assistance the city could give a developer. The agreement ended last year. 

New hotel rooms in downtown Lansing would play a big part in bringing in additional conferences to the Lansing Center and keeping people in the city's center after 5 p.m., said Bob Trezise, president and CEO of the Lansing Economic Area Partnership.

The Farnum Building is one of the best real estate locations in the state, he said, since future owner of the building has an opportunity to have a public face right outside the Capitol building. 

"If you put a sign on the roof it could advertise a wide way across the downtown area," Trezise said. “Politically (the building) could really have a presence in the state legislature with signage." 

The redevelopment of the Farnum building also means that Lansing's downtown could become less dominated by state government. A mix of businesses and state government downtown helps the surrounding economy to become more diverse and ensures that the city doesn't become too dependent on any one industry, Tresize said. 

The move marks a joint effort between the state and the city to strengthen the downtown area, Tresize said.

“Finally, there’s a recognition that the state of Michigan and the city of Lansing have a joint sense of responsibility about the downtown," he said. 

Van Martin, a downtown real estate broker and CBRE|Martin's CEO and chairman said the momentum from the sale of the Farnum building and City Hall could help spur further development and interest in downtown. 

“Lansing has got to be honest about who we are, where we are and what we need to do," he said. "We need some significant development." 

Contact reporter Haley Hansen at (517) 267-1344 or hhansen@lsj.com. Follow her on Twitter @halehansen.