By Joshua Benton
Blade Staff Writer
LANSING — Driving around downtown Lansing in his mammoth sport-utility vehicle, Sam Eyde can just feel the property values rising.
Tooling past the sparkling new downtown baseball stadium, through a neighborhood where yuppie cafes have replaced biker bars, he preaches the gospel of downtown revitalization. People are itching to set up shop in downtown Lansing, he says.
“This place is buzzing,” he says. “People want to come downtown now.”
Mr. Eyde, chief executive officer of The Eyde Co., buys and sells real estate, and so, as he puts it, “If I’m not an optimist, I’m in the wrong business.”
But his company, long a dominant player in the Lansing market, is spreading that optimism south. With his recent purchase of three major downtown Toledo buildings – his company’s first venture outside Michigan – Mr. Eyde is betting millions that Toledo’s central business district will soon be seeing a renaissance of its own.
“Maybe in Toledo, everyone is too close to the situation to see all the potential of downtown,” he says. “Maybe there’s some doubt about whether it can happen. But, from Lansing, it looks like a great opportunity.”
Toledo Mayor Carty Finkbeiner, himself quite a preacher of the gospel of downtown, says that Mr. Eyde and his family has it right.
“The Eydes have the right perspective to see what an opportunity downtown Toledo is for investors,” the mayor said.
And the mayor is hoping that Mr. Eyde will help him out with one of his biggest projects for downtown: attracting a health club for workers and residents.
Mr. Eyde runs a business that has been in his family for almost 45 years. The Eyde Co. handles just about every aspect of real estate development, including land sales, construction, and building management.
Through all those years, the Eyde Co. focused its efforts in the Lansing area, building office structures, apartment buildings, and single-family subdivisions.
Lansing, as the home of state government and with Michigan State University nearby, has a steady supply of recession-proof jobs and has never seen a downturn of the kind industrial cities such as Detroit or Toledo have. But Sam Eyde has decided to put his money – almost $6 million of it – into a Toledo downtown that many have fled.
“There’s so much that tells me that downtown Toledo is a good place for us to be,” he says.
Mr. Eyde admits that his initial motivation for investing in downtown was more happenstance than an earnest belief in Toledo. Last year, he had just closed on the sale of a large property, and for tax purposes, he needed to find a place to put a few million dollars. (See story on the practice of tax-deferred buying in today’s Real Estate section.)
So, in January, 1998, he bought the Fiberglas Tower and the former Toledo Trust building, for $4.5 million. And last month, he closed on a deal to buy One Lake Erie Center for $1.25 million.
Those two deals have given him three empty buildings and a major role in the future of downtown. And, Mr. Eyde says his company is looking to buy even more in Toledo.
“This is their new base,” says Toledo development director Barry Broome. “They’ve done just about everything there is to do in Lansing, so they’re moving their emphasis here.”
Mr. Eyde sees plenty of reasons for optimism in Toledo: the established base of residents in buildings such as the LaSalle Apartments and the Commodore Perry; the opening, in October, of the Valentine Theatre; the continued success of COSI; a possible expansion of the SeaGate Convention Centre, and the potential of a downtown baseball stadium or new hockey arena.
But Mr. Finkbeiner hopes the Eydes will be adding another ingredient to downtown’s revitalization – a downtown health club.
The Eyde family has some experience in the field. From Mr. Eyde’s window, he can see the seven-year-old Michigan Athletic Club – the second largest health club in America, on former Eyde land.
Inside, it’s a veritable sweat palace, with acres and acres of pumping iron and growing muscles. At more than 200,000 square feet after a recent expansion, it includes more than a dozen indoor tennis courts, four locker rooms, two lap pools, and a sea of weight machines. The MAC, as it’s known, has more than 8,000 paying members, including the athletic director of Michigan State.
“This place has been an enormous success, beyond anyone’s expectations,” Mr. Eyde says. “It’s a social center. People love to come here.”
The MAC is second in size only to the East Bank Club in Chicago, a 450,000-square-foot club that sprawls three blocks along the Chicago River.
For obvious reasons, a downtown health club in One Lake Erie Center wouldn’t be anywhere near the palace that the MAC is. But Mr. Eyde said that the first floor and basement of One Lake Erie could be converted into a 40,000-square-foot fitness facility within a year.
The management group that runs the Michigan Athletic Club has agreed to be partners with the Eydes on the project and has been to Toledo several times to inspect the site.
But he cautions that a health club would become reality only if several more pieces come into place. The city, along with ProMedica and Mercy health systems, have funded a feasibility study that will determine how much of a demand exists for a downtown club. Mr. Eyde said he won’t move forward until those results are in.
He says that he would want commitments from several downtown businesses, such as Toledo Edison, Owens-Corning, and The Blade, to support the venture by encouraging their employees to join. It would also take financial incentives from city government, he says, and a partnership with either ProMedica or Mercy.
“We’re not going to move ahead on this until we know it makes sense,” he says, “but it looks promising.”
No matter what happens with the health club, Mr. Eyde plans to move ahead with his plans to convert the Toledo Trust building into apartments. The building, once Ohio’s tallest, has been empty since 1991 except for a ground-floor restaurant fronting Levis Square.
Mr. Eyde acknowledges that some believe the downtown residential market may be nearing saturation, with the LaSalle and Commodore Perry recently opened and the Hillcrest and perhaps other buildings on the way to becoming apartment structures.
But he says that his market feasibility studies are showing that there is still a market willing to live downtown, and the full LaSalle Apartments seem to support him. “Having that constant flow of people in the central business district, that’s what’s going to drive your downtown,” he said.
For a time, the Eydes had been debating whether to turn the building into apartments or condominiums. But the final call was to create 110 upscale apartments, many of which will feature excellent views of the Maumee River and Promenade Park.
The biggest obstacle to the project was eliminated Friday, when the Ohio Housing Finance Agency agreed to give the Eyde Co. $7.7 million in tax credits to redevelop the building.
Mr. Eyde said he’d be ready to make a formal announcement on the project in a few weeks.
The Eydes are the latest in a growing list of non-Toledo firms that have seen downtown as a worthy investment. Wisconsin-based developer Randy Alexander redeveloped the Lasalle building into a successful apartment complex and is rehabilitating the former Hillcrest Hotel. A group of Cleveland investors has been looking at rehabbing the Toledo Edison steam plant, and companies from Ann Arbor and Columbus have committed to opening three restaurants in International Park.
Mayor Finkbeiner says that shows that many Toledo developers are too focused on the past.
“The local guys see old Toledo, how bustling downtown used to be, and how it’s declined since then,” he said. “They think downtown will never return to the old times. But these outsiders see the enormous potential of what we have, with the waterfront and the buildings and the people living downtown.”
The mayor applauded the local developers who have invested downtown – such as Bill and Oliver Hirt, who are rehabbing the Commodore Perry Hotel, and Tom Cousino, who opened the Navy Bistro restaurant in International Park and is constructing a second restaurant and a banquet facility there – for their commitment. But he said that, too often, it takes outsiders such as the Eydes to see the potential of downtown.
But Mr. Eyde is realistic about the downtown and its office vacancy rate – one of the highest office vacancy rates in the country.
When asked about how he plans to fill the Fiberglas Tower to capacity, he replies: “I’m praying.”
He has a strategy mapped out: persuading downtown Detroit businesses to look south. Rental rates in Detroit have risen to the point that he can offer businesses rates more than $5 per square foot cheaper, he says.
He has plans for exterior lighting for the tower and has completed some renovation work in the lobby.
He admits that he doesn’t have any prospects for the building at the moment.
But he has faith.
“Vacant buildings are our forte,” he says. “We like the challenge.”