Developer buys more empty southwest Detroit buildings

Louis Aguilar
The Detroit News

Detroit — A local developer with a history of holding on to empty buildings has purchased a former restaurant in the Mexicantown restaurant district, adding to his property in southwest Detroit.

The Bagley Avenue building that was home to El Zocalo for 33 years was bought by an entity controlled by Dennis Kefallinos. The former El Zocalo was acquired for $1.2 million in late August, recently released public records show.

 El Zocalo closed in September 2016 and was one of six Mexican restaurants, including Los Galanes and Taqueria Lupita, located on a small two-block stretch of Bagley that also includes La Gloria bakery and two tortilla factories. 

"I'm looking to keep it as a Mexican restaurant. My hope is by summertime it will be open," Kefallinos said. 

The acquisition adds to his collection of empty southwest Detroit properties, including Corktown and nearby Hubbard Richard. A few blocks from the restaurant building, he made another nearby purchase on West Vernor last summer, recently released public records show. 

He bought two adjacent buildings that used to be the Service Tire store on the 2700 block of West Vernor for $57,500 in June. The tire shop buildings have been empty for years.

The property is a few blocks from the former Michigan Central Depot purchased by Ford Motor Co. for $90 million in May.  Kefallinos said he was still deciding what to do with the buildings.

This is the former El Zocalo Mexican Restaurant at Bagley and 23rd Street in Mexicantown owned by Dennis Kefallinos, Thursday morning, Feb. 21, 2019.

In late September, Kefallinos bought an eight-story, 432,000-square-foot former cold-storage warehouse at 1448 Wabash, three blocks southeast of the train station. The Wabash building, which is empty, was sold in late September to an entity linked to Kefallinos for an undisclosed price.

Kefallinos also owns the former Roosevelt Hotel at 2250 14th St., which is less than a block from the Ford train station. He bought the former hotel  2010 for $37,500 at a tax-foreclosure auction. It, too, has been empty for years. 

“I’d like to make a decision on what to do with that in about 90 days,” he said about the former hotel.  

He also has an ownership stake in the former Southwest Detroit Hospital at 2401 20th St., a hulking stainless-steel-clad building that's been empty and blighted for years. 

Kefallinos is a long-time developer who has sometimes faced criticism from tenants and an occasional legal challenge from the city over the conditions of his buildings.

Dennis Kefallinos

His holdings include the Russell Industrial Center, a sprawling factory complex the city tried to shut down in 2017 due to building and fire code violations. The complex is home to artist studios and workspaces. Some of the tenants lobbied the city to keep the facility open after Kefallinos agreed to pay fines and do repairs.

“I lost most of my tenants, but we are still going. I’m still charging space for $500 a month, hoping that will bring some new people,” he said.

In 2017, Detroit's water department identified Kefallinos as having more than $382,000 in unpaid water bills for properties that included the former Roosevelt Hotel and the historic downtown Michigan Theatre, a former theater converted to a parking garage. 

Kefallinos has "resolved the past-due balances" with the water department, said Bryan Peckinpaugh, spokesman for the Detroit Water and Sewerage Department.

Kefallinos has had at least two multi-million-dollar sales of buildings since late 2017. In November, he sold a downtown office building, Harvard Square Centre at 1346 Broadway, for $6.2 million to Bedrock LLC, which controls more than 100 Detroit properties. Kefallinos paid $700,000 for the 11-story building in 2008, city records show.

In December 2017, he sold a former Wayne State University pharmacy school building, Shapero Hall, for $16 million. He bought the Lafayette Park building for $2.3 million from Wayne State in 2007. The building was vacant for years. 

Kefallinos acknowledged that his holdings sometimes have deteriorated.

“Everything I’ve done, I’ve never asked for a tax credit from the city or state," he said. "I’m doing things the hard way, sometimes you have to cut corners."

Twitter: @LouisAguilar_DN