More big dreams for Detroit revival are taking shape
The 28-year-old New Yorker who recently put up four billboards in the Big Apple and Brooklyn promoting his future Corktown restaurant epitomizes a new wave of enthusiastic developers buying swaths of Detroit.
The Thai restaurant to be housed in a former auto repair shop on Michigan Avenue and 17th Street is just one of the Motor City properties Philip Kafka has spent his life savings buying over the past two years.
He owns a big chunk around Grand River at Warren. That includes two empty industrial buildings, another former auto repair shop, several empty weedy lots and the building that's home to Architectural Salvage Warehouse at 4815 15th St. In total, it amounts to about 110,000 square feet of space.
As he stood between a fenced-in parking lot in front of Architectural Salvage and two of his empty buildings, Kafka was almost giddy as he talked about what the area could become.
"What I see is a European-style village," he said. "The empty buildings are so big, they can have many different types of businesses, artist studios, maybe even a boxing gym. And here in this parking lot, you can have cafes or food trucks," Kafka said. He said he has no plans to relocate Architectural Salvage, a nonprofit that deals in repurposed building materials.
"I don't want to kick anyone out because that is too New York, and that's why I'm not doing this in New York," he said.
Kafka's main business is a New York billboard company he founded called Prince Media. It's the same line of work that his father did in Dallas, but Kafka is self-made, he said.
"In New York, I make real estate deals based on inches," Kafka said. "Here in Detroit, you have space to execute a vision and have fun with it. You don't have to answer to a guy in a suit," he said, referring to investors. "Detroit is a place I can express my art." .
Public records don't show the prices he paid for the properties, and Kafka didn't disclose what he paid. "I paid reasonable prices," he said, and he bought much of the property from private individuals.
As New York real estate prices continued to skyrocket, Kafka started three years ago to visit U.S. cities — Philadelphia; Pittsburgh; Charleston, South Carolina; — where he could invest and start projects.
"Detroit is like an ex-heavyweight champion boxer," Kafka said. "He was at the top of the game, now he's had some downs, but, still, he once was the champ. He's still the person who is really fascinating. Detroit, by far, had the most intrinsic value."
Waves of investment
Kafka is not alone in seeing the value of distressed Detroit area property. He is among the wave of smaller entrepreneurs investing in the city.
Detroit real estate agents like Ryan Cooley of O'Connor Realty say it is common to get inquiries from out-of-state investors who want to buy big parcels.
In December, Galapagos Art Space, a performance center and cultural hub in Brooklyn, New York, for nearly 20 years, announced it was relocating to Detroit. Galapagos founder Robert Elmes and partners bought nine buildings, most of them empty, in Corktown and Highland Park, amounting to more than half a million square feet of space. He paid around $700,000 for the properties, according to CoStar, a real estate database.
"New York has become far too expensive to incubate young artists," Elmes said in a Detroit News interview in December. "That's our sole mission — to grow talent from emerging to midcareer."
All this is happening when parts of Detroit are on a strong rebound that hasn't occurred in decades, while other parts are still struggling with basic services and dwindling population. The billionaires Dan Gilbert and the Ilitch family are both pursuing grand visions that are transforming downtown and beyond. The Ilitches have embarked on creating five new neighborhoods just north of downtown. If their plans succeed, it will create something larger than the current downtown.
Meanwhile, tens of thousands of people in Wayne County face possible foreclosure this year due to back property taxes. Nearly 75,000 properties were subject to foreclosure notices late last year. More than 80 percent are in Detroit.
Kafka says he sensitive to the dichotomy and some locals have accused of him wanting to create something that's not for current residents.
"I say everything I am going to do here is going to be with local partners," he said. "But no one is completely altruistic. The best I can do is express my art and hopefully people will respect that."
Kafka said he's bought property from several longtime African-American residents and they are among the "most respectful" of his plans.
"The people who give me the hardest time are people who moved to the city from the suburbs within the past few years. Some of them have a sense of entitlement that they should have more opportunities than me," Kafka said.
The Corktown restaurant is the project that's he is focusing on first. He is partnering with chef Brad Greenhill and Courtney Henriette, two Detroit entrepreneurs who operated a food truck called Katoi.
Both are grateful for finding a partner who can help them realize their goal of opening a bricks-and-mortar restaurant and bar. Katoi is expected to open later this year.
"The great thing about Katoi is that it really is a true partnership," said Henriette, who met Kafka last year. "Each of the partners are bringing a lot of ideas to the business. We are equals."