Residents of Cass apartments owned by Ilitch firm feel squeeze

Louis Aguilar
The Detroit News
The Cass Park Apartments on Second Avenue and Cass Park in Detroit has been  purchased by an entity linked to the  Ilitch organization.  The 37-unit apartment building dates to 1914.

Detroit — Another historic Cass Corridor apartment building in the shadow of Little Caesars Arena has been purchased by an entity linked to the billionaire Ilitch organization, and residents of the building say they are being squeezed out.

The Cass Park Apartments at 2714 Second Ave. are one block from the arena and Masonic Temple. The 37-unit apartment building was bought in July 2016 for $2.1 million by a company that only recently revealed its affiliation to the Ilitch organization, public records show.

Since the 2016 purchase, parking for the building has been wiped out by an Ilitch-built parking lot that takes up most of the block. Management of the building has changed at least twice during that time, according to current and past residents. And residents and members of a neighborhood advisory committee say the building is steadily getting emptier: Once a tenant moves, that apartment unit is not rented out again, they said.

"Most of the residents feel like they are in limbo; no one is telling them who really owns the building and what's going to happen," said Karen McLeod. She is a member of the neighborhood advisory committee that meets with the Ilitch organization about the business group's plan to redevelop 50 blocks around the arena that opened in September 2017.

McLeod said she has talked with current and past residents of the building for more than a year now about their concerns. She said the committee has brought up the issues with Ilitch representatives, who gave a "vague response."

The four-story, brown-brick building next to Cass Park opened in 1914 and is "built in the Georgian Revival/Arts-and-Crafts design," according to a city document that nominates the building to be part of an historic district. The building was renovated in 2003, according to Costar, a commercial real estate database.  

Before the Ilitch-linked entity bought the building, tenants included residents with graduate degrees; several worked for non-profits who did local volunteer work; another was an artist.

Another member of the neighborhood advisory committee, Francis Grunow, confirmed specifics about the situation based on conversations with past and current residents. "It's been frustrating for (the residents) because they have to scramble now to find a place to park, and it's not clear to them who owns the building," Grunow said. 

In August, ownership of the Cass Park Apartments was transferred for free to TSD Solutions, a limited-liability company whose address is the Woodward Avenue headquarters of the Ilitch conglomerate of businesses, according to public property records. The document that transfers the building ownership to TSD Solutions says the sale was "executed" in 2016, when the previous sale occurred. 

Parking for the Cass Park Apartments, seen in the background, has been replaced by an Ilitch-built parking lot that takes up most of the block. This parking lot used to be for apartment tenants.

When asked about Cass Park Apartments, the real estate unit of the Ilitch organization emailed The News a one-sentence reply:  "We are very excited about our development plans for The District Detroit and look forward to sharing future project plans at the appropriate time."

The District Detroit is the name of the plan to create five neighborhoods around Little Caesars Arena. The broader development plan was central to easing public concerns about giving $324 million in taxpayer money to the Ilitch organization to build the arena. 

The $863-million sports-and-entertainment complex is managed by the Ilitch’s Olympia Entertainment and is named after the global pizza chain owned by the family-run conglomerate. It is home to the Ilitch-owned Detroit Red Wings, as well as the Detroit Pistons, which are not owned by the Ilitches. Entities linked to the Ilitch real estate unit, Olympia Development of Michigan, control large chunks of the 50 blocks in the planned development area. 

The purchase of the Cass Park Apartments means Ilitch-linked entities now control the entire square block through various sales dating to 2014, property records show. The block is bordered by Cass Avenue to the east, Temple Street to the north, Second Avenue to the west and Ledyard Street to the South. Ilitch-linked entities paid a total of $10.2 million for the properties, according to public records. 

A member of the neighborhood advisory committee, Francis Grunow, said, "It's been frustrating for (the residents) because they have to scramble now to find a place to park, and it's not clear to them who owns the building.”

The Cass Park Apartments is the fourth apartment building that was occupied when it was bought by an Ilitch-linked entity. The three others are on the 400 block of Henry Street, which is also one block away from the Cass Avenue side of the arena. 

Since the October 2016 purchase of the three Henry Street apartments, the small historic buildings have received from the city nearly two-dozen blight tickets for violations that include rodent infestation, failure to inspect for lead paint and dangerous living conditions. One of the apartment buildings was shut in late 2017 after the roof partially collapsed.

The Ilitch organization has invested $1.4 billion in office, retail and other developments in the 50-block district, company officials said. That includes the $59 million Wayne State University Mike Ilitch School of Business next to the arena. The Ilitches contributed $40 million to build the facility, named after the late family patriarch.

The Ilitches also are building a nine-story Little Caesars headquarters next to the current headquarters at the Fox Theatre.  Other major development plans for several historic empty buildings and other properties are being explored as well.

Twitter: @LouisAguilar_DN