$5.7M loan, $4.9M tax incentives OK'd for Temple Street hotel project
The Michigan Strategic Fund board on Tuesday approved a $5.7 million performance-based loan and $4.9 million in brownfield tax incentives for the $67 million redevelopment of an historic mixed-use building in Midtown.
Temple Group Holdings LLC is developing the former Standard Accident Insurance Co. building at 640 Temple into a 100-room boutique hotel with banquet facility and restaurant.
Developers requested a loan through the Michigan Community Revitalization Program to fill in a funding gap with its lender, Chemical Bank, according to a briefing memo to the strategic fund board.
"The project is inhibited by significant brownfield conditions that make redevelopment costly and economic conditions that make traditional financing difficult," the memo said. "Further, because of its status as a historic building, design, planning and rehabilitation costs are extraordinarily high to meet preservation standards required by the State Historic Preservation Office."
The board also approved the City of Detroit Brownfield Redevelopment Authority's request for a Brownfield Act 381 Work Plan, including $4.9 million in local and school tax capture for the project. Without Brownfield tax increment reimbursement, the cost to clean up the site would make the project "financially unfeasible," according to the memo.
According to the memo, the project will involve rehabilitating the 192,000-square-foot, seven-story building designed in 1920 by the famed architect Albert Kahn. The building sits blocks away from Little Caesars Arena.
Once complete, the project will feature a nearly 78,000-square-foot, 100-room boutique hotel with banquet facility, restaurant, and bar on floors one through four. The site will house 70 apartments in 60,000 square feet on floors five through seven. The development will also feature a rooftop pool. The basement of the building will be converted into a 7,300-square-foot nightclub with separate access. The adjacent vacant lot will become a landscaped space for outdoor entertainment.
Development of the hotel is expected to create 80 permanent full-time equivalent jobs with an average hourly wage of $15.
Christos Moisides, a developer for the project, could not be reached for comment. According to the MEDC, Temple Group Holdings LLC is an entity related to 400 Monroe Associates, a family-owned, Detroit-based real estate development and management company. In 2017, the Wayne County Board of Commissioners transferred the building to the county’s land bank, which completed the sale to Temple Group Holdings LLC.
The state was happy to help the developer with the project, said Greg Tedder, executive vice president and chief community development and marketing officer for the Michigan Economic Development Corporation.
“The fact of the matter is historic redevelopments of this size are tremendously difficult to pull off,” Tedder said. “This project checks off all the components of what we’re looking for. It’s mixed-use, an historical building that adds density. More importantly it adds to the growing success of what’s happening in the (Little Caesars Arena) district. It expands the boundaries of what’s happening in that area. Midtown has seen tremendous growth.”