Sterling Heights — A public hearing on a tax plan to transform the former Lakeside Mall in Sterling Heights into a massive new development of housing, retail shops and park space will be held later this spring as the project moves forward.
The Sterling Heights City Council has set a public hearing on a Transformational Brownfield Plan for the project for May 5, a plan officials say is designed to help spur major redevelopment projects in Michigan. Miami-based real estate firm Lionheart Capital plans to redevelop Lakeside Mall on M-59 into a mixed-use development called Lakeside City Center.
Mayor Michael Taylor said in a statement “the benefits are too numerous to list.”
“I believe this will be a truly transformational development for the city that will not only create new jobs and investment, but deliver much needed housing and unique retail, public parks and gathering spaces, and new cultural amenities for the city, county and region,” Taylor said during a City Council meeting on Tuesday.
Luke Bonner, Sterling Heights’ senior economic development adviser, said a Combined Transformational Brownfield Plan combines revenue from local tax increment financing with state tax increment financing. With tax increment financing, increased tax revenue from higher property values is set aside for future investments in the property.
Bonner said the Lakeside brownfield plan is focused on real estate property taxes and construction activity revenue. Lionheart will be able to use the revenue from the plan on anything related to “hard construction costs,” such as buildings, demolition, and water and sewer infrastructure, he said.
Bonner said that when planning the project, Sterling Heights wanted a high-density town center at the location.
“When you’re doing a project of this size, of this high of density, there is a significant amount of public improvements that are required in order to basically enable the private investment to happen,” he said.
He said the amount of public investment that is required is usually more than “what a project can bear financially.”
“The tax increment financing tool is the tool of which the city and the developer can partner in financing all of those improvements,” he said, referring to infrastructure improvements.
More on the project
Lionheart bought Lakeside Mall in late 2019; it closed in the summer of 2024.
The City Council approved the master development plan for the project in December 2024. The plan includes turning the property into five neighborhoods, some of which could include high-rise buildings, along with retail, restaurants and open space.
The center of the property would be home to a Central Park, which would be “a flexible space” lined with restaurants and outdoor seating for music, art and events.
Bonner said the Combined Transformational Brownfield Plan will be for phase one of the project, which will cost approximately $621 million. The phase includes about 1,300 residential units, 180 senior units, 150,000 square feet of retail and what’s being called Central Park.
Need for ‘additional finance support’
Bonner said projects of this size don’t “happen very often” in Metro Detroit.
“They are essentially pushing the edges of the market in Sterling Heights, Michigan, to do this kind of town center,” he said. “And so when you’re also doing that, projects that are this big and this long-term generally need additional finance support in order to make sure that it’s a viable project and it can sustain the amount of construction over the duration of time that this is proposed to be built.”
The Hudson’s Detroit and Book Tower projects in downtown Detroit were financed, in part, by the state’s transformational brownfield program.
Bonner said the Michigan Strategic Fund Board will have to approve the brownfield plan for Lakeside as well.
Sterling Heights Councilman Michael Radtke said the project isn’t going to “get done” without the brownfield plan.
“I think at the end of the day, you have to be very protective of the people’s money while also working with developers for the product that you want,” he said. “I would say that if we did not work with the developers of this mall, we could have an abandoned mall. We could have a white albatross over the city’s budget, which has happened elsewhere.”
Colin Carby, director of development at Lionheart, said the brownfield plan will allow the public-private partnership between the city and Lakeside OOTB Ventures LLC, an affiliate of Lionheart, to respond to the city’s call to “host mixed land uses in a lifestyle center.”
“The plan is to serve the community members of all age groups with a variety of neighborhoods, provide a new sustainable public realm and park system, and serve as the renewed heart of the City,” he said in an email.
asnabes@detroitnews.com
This article originally appeared on The Detroit News: Sterling Heights sets hearing for Lakeside City Center tax plan for May
Reporting by Anne Snabes, The Detroit News / The Detroit News
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