Studebaker site project gets $2M loan increase from Michigan Strategic Fund

Candice Williams
The Detroit News

The Michigan Strategic Fund approved Tuesday a $2,045,000 million increase in a state program loan for the redevelopment of a former Studebaker building in Detroit into a 161-unit apartment complex. The board also approved a new $2,270,000 state loan for a mixed-use development in the city of DeWitt and up to $60 million in bond financing for the William Davidson Foundation to build a new headquarters in Bloomfield Hills.

The loan increase for the Studebaker site comes after the board approved in September a request from Detroit-based The Platform’s entity, 411 Piquette LLC, for a $5 million Michigan Community Revitalization Program loan to rehabilitate the 108,000-square-foot building at 411 Piquette, a former sales and service center. This brings the total loan amount to $7,045,000.

The Platform plans to redevelop the former Studebaker sales and service center into an 162-unit apartment complex in Milwaukee Junction.

Known as the Piquette Flats, the $40 million project is expected to meet demand for workforce housing stock in the Milwaukee Junction neighborhood and boost its walkability.

According to a Michigan Economic Development Corporation briefing memo, the developers requested a loan increase because Property Assessed Clean Energy (PACE) financing was no longer a viable option due to rising interest rates. This left a $4 million funding gap, which will be filled with $600,000 from senior lender Flagstar Bank and additional equity from the development team, according to the memo.

The terms of the loan will remain the same, with the developer paying 1% interest for up to 72 months with interest-only payable for 36 months.

Rents for the Piquette Flats will range from between 60% and 120% of the area median income, officials said. The project will also include 190 surface parking spots.

In Bloomfield Hills, the bond financing will help the William Davidson Foundation's plan to build a new headquarters in Bloomfield Hills.

The 35,000-square-foot headquarters will be on the site of the former Birmingham Masonic Temple at 37357 Woodward Ave. The building was torn down in 2021.

When the project is complete in 2024, the foundation will move from its location in Troy, according to an MEDC briefing memo. The foundation has 19 employees, 18 in Michigan. The nonprofit expects to hire five additional employees once the headquarters is complete.

According to the MEDC, a Huntington National Bank affiliate, Huntington Public Capital Corporation, is anticipated to acquire the bonds through a private placement agreement. According to the company pursuing tax-exempt borrowing instead of conventional financing will lower the cost of capital by about 20%.

At Tuesday's meeting the MSF board also approved Tuesday the state loan for AWJ Holdings, LLC in Clinton County's DeWitt to rehabilitate a vacant property at 110 South Bridge St. and build a 21,400-square-foot, three-story, mixed-use building. The $4.8 million project will create eight new market-rate residential units and 6,359 square feet of commercial space in the city’s central business district.

"This project is a high priority for the City of DeWitt, as it will activate a long-vacant space in the heart ofdowntown and the business district by transforming a parcel with contaminated soils into a communityasset," MEDC staff wrote in a briefing memo.

A large portion of the building will be owner occupied by Reed Insurance Agency. Andy Joslyn, who owns AWJ Holdings LLC, and his family have owned the insurance agency since 1970, officials said.

According to a MEDC briefing memo, the project is in financial need due to the cost of developing the brownfield site with appropriate infill.

The development team is contributing more than 13% equity and has leveraged $1,950,000 in senior financing. The project will also use a PA-210 tax abatement with an estimated value of $305,000.

Twitter: @CWilliams_DN