Arena moves ahead; nearby projects may lag

Louis Aguilar The Detroit News

Detroit — Nearly a year after Olympia Development announced that a big chunk of $200 million in retail, offices and apartments could be open when the Red Wings' hockey arena debuts in summer 2017, plans, details and timelines of many of those components remain unknown.

"I don't even see the majority of that 45-block overhaul starting before the arena is open," said John Mogk, a Wayne State University law professor who closely follows Detroit development.

"You need to prove a strong market for new residential and commercial, and what is in that area now doesn't make much of a case," Mogk said.

That 45-block area, much of which is blighted or empty, stretches roughly from the northern edge of downtown near Grand Circus Park to the Cass Corridor.

Others say there is still time for it to come together to coincide with the arena's opening. The Ilitch organization, which owns Olympia Development and envisioned the new area north of the downtown core, isn't commenting.

"It can still be done, but the process would have to start soon," said Leo Phillips, a longtime Detroit-area developer who has been involved in such projects as the restoration of the Doubletree Fort Shelby Hotel and rental apartments.

"You would need to get the approval process going fairly soon," Philips said, referring to financing and various levels of city approval.

Work on the 650,000-square-foot hockey and events center has begun and it is expected to open on schedule. The arena is the anchor and expected catalyst for at least $200 million in other development in the area.

The only ancillary projects revealed are either next to the new arena or the Fox Theatre. Both are owned by the Ilitch group, whose other holdings include MotorCity Casino, the Detroit Tigers and Hockeytown Cafe.

Last July, Ilitch's Olympia Development of Michigan said it was accelerating the timeline to simultaneously build the hockey and events center while creating five "neighborhoods" of housing, stores and offices.

Three projects, in addition to the arena, are moving forward, though one hasn't been officially announced or finalized.

The non-arena projects:

■The new Little Caesars Global Resource Center, to be built on Woodward Avenue at Columbia Street, that will be the headquarters of the global pizza chain. Work is expected to begin soon on the eight-story building next to the Fox, which is Little Caesars current headquarters. The new building will double the pizza chain's space and could add 600 workers downtown.

■ Up to 300 new apartments across from the Fox and in front of Comerica Park, home field of the Ilitch-owned Tigers. A new structure would be built on what are now surface parking lots along Woodward and Montcalm. The deal is still being negotiated between Olympia Development and St. John's Episcopal Church, but is apparently close to being finalized. The historical church, on Woodward and the I-75 service drive, owns part of the parking lots on Montcalm and Woodward.

■Restoration of the historic former Eddystone Hotel, across the freeway from the new arena, into 100 rental apartments. The 13-story Eddystone is on the northwest corner of Park and Sproat. Work on the project has been slowed due to Olympia's plan to demolish the former Park Avenue Hotel, on the southwest corner of Park and Sproat, next to the Eddystone. That plan still awaits city approval after months of debate.

While those three developments represent at least $100 million in new investment in Detroit, they cover very little territory in the planned 45 blocks that will encompass the five new neighborhoods.

Any delay in the epic plans could bolster critics of the Ilitches, who already are skeptical of tax support given to build the arena, as well as the organization's track record of allowing some of its historical properties to sit empty for years, or, in some cases, having them demolished.

Mogk and others say a delay doesn't mean the ambitious plans won't happen.

"There are many incentives for the Ilitches to carry out the plan," Mogk said. "For one, their reputation is on the line."

Olympia Development and various other Ilitch companies are the fifth-largest downtown property taxpayers, with a total of $15.5 million in taxable property value, according to city economics officials. Any of the ancillary developments will be taxed.

Also, the plan of having many new offices, restaurants, bars and apartments open in time for the arena debut is a self-imposed goal.

According to the development agreement between Olympia and the city, the Ilitches have up to five years within the arena's opening to spend at least $200 million in the other development.

Twitter: LouisAguilar_DN