'The Mid' hotel, condo space secures $58M in tax reimbursements
After a medical office building never came to fruition in Detroit's Midtown, a $377 million hotel and condominium development is taking its place — and its tax incentives.
The governing body of the Michigan Economic Development Corp. on Tuesday approved the addition of The Mid development on Woodward to a previously approved brownfield incentives packages. The amended work plan increases reimbursements to the city of Detroit from $8 million to more than $58 million through the tax capture of eligible activities over 30 years that began in 2015. The reimbursements ultimately will go to the project's developers.
The Mid is a 1.1 million-square-foot, five-building project expected to include multi-family, luxury, co-living and affordable housing when it opens in December 2020, developers previously said. The development at 3750 Woodward will sit across from Orchestra Hall and is just north of Whole Foods. The vacant land there formerly was the location of the Wayne State University Physicians Group. There will be space for retail, parking and public areas for residents and visitors.
The project is expected to create 1,800 construction jobs and 400 permanent positions.
Tax incentives will help with the costs of demolition, lead and asbestos removal and infrastructure improvements. Nearly $28 million in expected reimbursements is from state school taxes. It includes more than $30 million in local tax captures, as well.
The project also is requesting $153,400 from the Michigan Department of Environment, Great Lakes and Energy in tax increment financing to assist with environmental eligible
activities. It will receive tax abatements for up to 15 years that is not included in the $58 million incentives package, as well.
The Michigan Strategic Fund's board in 2014 originally approved the brownfield work plan in 2014. The incentives supported a 12-story development by the Roxbury Group at the adjacent 3800 Woodward. Financing for a five-story, mixed-use medical office and parking garage originally planned for the 3750 Woodward property, however, fell through. The Mid takes its place and increases the project's investment by nearly $304 million.
The Mid will have a 27-story building with 180 multi-family residences including 36 that are affordable and five levels of parking. A 12-story building will contain 198 co-living units and retail on the first two floors. Details of two other single-story cultural and arts buildings still are being finalized.
The project also will include a 216,000-square-foot, 25-story hotel and 100,000 square feet of retail space. Retailers have not yet been announced, but developers have said they will include small businesses and a grocer.
Developers have said a yet-to-be-revealed hospitality brand will operate the 225-room luxury boutique hotel. It will include dining and a cocktail lounge.
An entity registered to Southfield-based Ciena Healthcare founder Mohammad Qazi bought the property for $15 million in a purchase recorded in September., according to city property records.
The incentives packages were among several totaling $625 million in capital investments in Michigan that will create 555 new jobs.
"They will help build on efforts to make Michigan communities vibrant places to live, work and play," Amanda Bright McClanahan, the Michigan Economic Development Corp.'s chief operating officer, said on a phone call with reporters Tuesday.
The economic development corporation approved reimbursement of nearly $10 million through the tax capture of eligible activities over 30 years starting in 2021 for the creation of a six-story, mixed-use parking structure to support the rehabilitation of an existing 57,000-square-foot office building at 115 Erskine in Detroit's Midtown.
The 213,099-square-foot building from an entity owned by Birmingham-based Professional Property Management Co. of Michigan will include 6,730 square feet of ground-floor retail that will help to activate an adjacent alleyway. The whole development sits on 3.7 acres.
The city also is supporting the project with a roughly $3 million tax exemption and brownfield tax increment financing value at nearly $3.5 million.
The project, Bright McClanahan said, will "re-establish the street grid in this neighborhood."
The Michigan Strategic Fund board also approved the sale of the former General Motors Co. Willow Run Powertrain Plant to the American Center for Mobility. The center currently leases the more than 500 acres from the Willow Run Arsenal of Democracy Landholdings Limited Partnership of which the fund is a limited partner.
The deal requires the mobility testing center to repay $35 million invested into the site plus interest. Structured repayment will begin in 2025 and continue over 30 years.
The sale will allow the mobility center to pursue more easily future upgrades and designs on the property, Bright McClanahan said.
The fund's approval also begins the liquidation and dissolution of the landholdings limited partnership that was created to acquire the property for the mobility center.