Corktown-fueled land rush stretches toward Dearborn
This story has been updated to correct the investment partners in a Midtown hotel project with developer Christos Moisides. Tony Saunders is not a partner in the Temple Hotel project.
Detroit — Here’s more proof that real estate is getting a bit wacky anywhere near Corktown and the former train station being renovated by Ford Motor Co.: A long-empty storefront with a gaping hole above the front entrance sold twice in the same day. The first sale was for $350,000. The second was for $625,000.
"I did those transactions within minutes," said George Mugianis, who bought and flipped the property in March. The sale was for a pair of rundown buildings on the 3400 block of Michigan Avenue and an open lot behind them. Eight years ago, the same properties sold for $83,500.
"I know it sounds crazy, but there are people who believe in Detroit, and I'm one of them, and so is the buyer," Mugianis said, a veteran entrepreneur and developer in the Motor City.
The sale is on a block of ragged structures that has attracted millions in speculative real estate dreams within the past two years. It highlights the fact that betting on Detroit development often means buying derelict property. The block is west of Corktown, past the Interstate 96 overpass, about a half-mile from the nearest trendy restaurant or $400,000 condominium.
According to public records that became available in August, the buyer that paid $625,000 is a company registered to Christos Moisides, a politically connected Detroit developer. Moisides didn't respond to requests for comment.
On the same block is a castle-like building that's on the cusp of a $5 million makeover that will bring 28 apartments and ground-floor retail. "We are fully financed," said Brian Mooney, one of the developers of the project called Grosfield Lofts. The group awaits final approval of a historic tax credit to begin overhauling a set of connected buildings dating back to the 1870s, Mooney said. One building has an exterior wall that's partially collapsed.
The restaurateur behind the popular Flowers of Vietnam in southwest Detroit has already committed to opening a new eatery in Grosfield Lofts.
On the same block, another building owner awaits building-permit approval to begin converting two empty storefronts into a music venue showcasing live classical and jazz acts.
"I think (development) will continue all the way down Michigan Avenue, hopefully all the way to Dearborn," said Christopher Hajek, the developer behind the music venue project. The Dearborn city limit is 4½ miles west.
One block west, an empty building was recently purchased; public records show that one of the new owners is the founder of Rusted Crow Spirits, a Dearborn Heights distillery. Rusted Crow recently open a downtown Detroit restaurant.
Across the street from Hajek's property is a unique neighbor: the black cinder-block headquarters of the Detroit Highwaymen Motorcycle Club. In 2009, 74 members and associates of the Highwaymen were indicted on charges involving murder for hire, racketeering, assault, police corruption, cocaine trafficking, vehicle theft, mortgage and insurance fraud. The investigation involved wiretaps of the Michigan Avenue headquarters.
Club members and associates gather weekly at the Michigan Avenue building, their Harley-Davidsons and classic cars often lining the street for blocks. The Highwaymen didn't respond to requests for comment.
"They've been really nice neighbors," said Hajek, a sentiment echoed by other building owners.
It's unknown what Moisides plans for the Michigan Avenue properties. Another of his projects is a planned $72 million boutique hotel near Masonic Temple in Midtown. His partners in that venture include Gretchen Carhartt Valade, an owner of the Carhartt clothing brand. Moisides also is an executive for a real estate firm that owns and manages county properties like the downtown Guardian Building and Sheriff’s Headquarters in Midtown.
Mugianis, the entrepreneur who flipped the property the same day he bought it, said he has options to buy and develop another empty building next to the proposed classical and jazz club. It's a building where a letterpress company closed about 10 years ago. The building is on the market for $700,000.
He intends to flip that property, just as he did with the other. Raymond Fletcher, the property manager for Mugianis, said, "We've been getting about two, sometimes three, interested parties a week coming into to look at the space."