State Taxpayers Eat $350K Loan for East Lansing Property Purchase

The way Phil Bellfy sees it, it may not be illegal, but that doesn't make it right.

Bellfy is a Michigan State University professor and vocal critic of an East Lansing Downtown Development Authority deal he says doesn't smell right.

Here's what happened according to City of East Lansing officials.

The East Lansing Downtown Development Authority bought a building for $700,000 from a man about six years ago when the owner's father served on the DDA. The DDA paid for the building via a loan from the Michigan Economic Development Corp. Fast forward to 2010, the city requested and got approval from the MEDC to forgive $350,000 of the loan.

"When the state did that, in my mind, that is a taxpayer bailout for this project," Bellfy said. "Here we are nearly bankrupt as a state, and it was given away. I think that is completely and totally wrong. It may be perfectly legal; it just pisses me off they do these kind of things."

The East Lansing Downtown Development Authority bought the building from Brad Ballein. At the time of the sale, Ballein's father, Howard Ballein, was serving on the DDA, the son said. Today, Brad Ballein serves on the DDA.

Brad Ballein said the DDA bought the building from him for $700,000 six years ago before he was appointed to that board. He said he had bought the building for $550,000 and put another $150,000 in remodeling and broke even.

"To me, it wasn't a money maker," Brad Ballein said.

Tim Dempsey, East Lansing's Director of Planning and Community Development, said the MEDC forgave half the loan.

Bridget Beckham, spokeswoman for the MEDC, didn't return an e-mail seeking comment.

The original version of this story was posted online on May 25, 2010.