The company had planned in 2005 to spend about $125 million tobuild a 75,000-sf athletic club, a restaurant and a 96-suite hotelon the property, which had once been the site of a Kroger-anchoredretail strip that included a dry cleaners. However, ScottChappelle, president of the East Lansing-based Strathmore, says thecompany had to expand the project's scope. "We had to arrange anumber of approvals for the various economic incentives," he tellsGlobeSt.com. The property is polluted, and Strathmore is receivingmore than $41 million, including TIF funds, from the MichiganEconomic Growth Authority, the Michigan Economic Development Corp.,Washtenaw County and the city to build the project.

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

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

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