The company had planned in 2005 to spend about $125 million to build a 75,000-sf athletic club, a restaurant and a 96-suite hotel on the property, which had once been the site of a Kroger-anchored retail strip that included a dry cleaners. However, Scott Chappelle, president of the East Lansing-based Strathmore, says the company had to expand the project's scope. "We had to arrange a number of approvals for the various economic incentives," he tells GlobeSt.com. The property is polluted, and Strathmore is receiving more than $41 million, including TIF funds, from the Michigan Economic Growth Authority, the Michigan Economic Development Corp., Washtenaw County and the city to build the project.

The new project will cost about $171 million. Project joint venture financing has been arranged through Morgan Stanley Real Estate on behalf of a silent client. Construction financing will be syndicated through Key Bank Real Estate Capital, together with mezzanine financing from National City Commercial Real Estate. Clark Construction Co. is building the project.

The commercial space is 72% preleased, Chappelle says, but he would not name the tenants. The retail will include two restaurants a bank and a coffee-pastry shop, and the other buildings will feature medical office and a real estate company, he says. The project should be completed by fourth quarter 2009, Chappelle says.