It’s boom time for developments in heart of Detroit
For the area known as greater downtown Detroit, 2016 is expected to be the kind of year city leaders have dreamed of and worked toward since the 1967 riots.
This year will also highlight that Detroit’s rebound remains wildly uneven: While development in neighborhoods throughout the city is planned, it will not match the boom times going on in greater downtown.
“The best is yet to come and we look forward to the year ahead,” said Jim Ketai, managing partner and CEO of Bedrock Real Estate Services. Bedrock has become a major force in downtown since it arrived this decade. It’s invested nearly $2.2 billion in acquiring and renovating 80-plus properties downtown. Last year was a record year for Bedrock and Ketai indicated the firm has big hopes for 2016.
This year in the 7.2-square-mile heart of Detroit, educated middle-class people likely will fill the estimated 1,200 to 1,400 apartments expected to open in the downtown, Midtown, Corktown, East Riverfront, Brush Park, New Center, Lafayette Park and Eastern Market. Many residents will be new to the city, based on trends of the past few years. They will pay monthly rent somewhere around $1,000 to $1,500 for a one-bedroom. Those rents can be double compared to the rest of the city, based on dollar per square foot.
In 2016, billionaires such as Dan Gilbert, who owns Bedrock Real Estate, and the Ilitch family will finalize plans for important new buildings on Woodward, the major strip that Gilbert and the Ilitches are reshaping now.
As recently as a decade ago, downtown Woodward used to be “the bad wig shop capital of America,” according to George Jackson. He is former CEO of the Detroit Economic Growth Corp., the quasi-public agency that promotes development in the city.
“Now, like most of downtown, I’m just amazed at what I’m seeing. It’s phenomenal,” Jackson said, who now works as a private consultant. Detroit leaders have worked for this kind of activity since the city began to decline in population and businesses 50 years ago. A turning point was the collaborative effort of businesses, government and philanthropic foundations to prepare for Super Bowl XL in 2006, Jackson said.
“That made it clear to lot of people that we could accomplish a great deal,” Jackson said.
Expectations are so high for 2016 because 2015 was an unprecedented year for growth. And so was 2014.
Gilbert’s Bedrock Real Estate Services said 2015 was a record year. It signed 70 new tenants encompassing nearly 1.3 million square feet of retail and office space in the city’s urban core, which was the largest volume since Bedrock began acquiring downtown properties in 2011.
Midtown boomed as well. Last year, 18 new housing developments representing more than 750 units either began construction in 2015, or sealed their deals to begin construction this year. That’s more than double the eight new developments in 2014, said Susan Mosey, president of Midtown Detroit Inc., the nonprofit that plays a major role in shaping growth in the area.
In 2016, at least 10 housing more developments in Midtown are expected to be finalized, Mosey said.
“For probably the last five years, you see, really almost a doubling of activity every year,” said Eric Larson, CEO of the Downtown Development Authority, a public-private partnership aimed at revitalizing the central business district.
Some of the developments expected to make major progress or be formally announced in 2016:
■Former Hudson’s site: Dan Gilbert’s final plans for the vacant J. L. Hudson’s site on Woodward could be revealed in January. Tentative designs show a swooping glass-and-metal structure that looks like nothing in Detroit now.
The plan would include 250 residential units, 225,000 square feet of mixed-use commercial or retail space, as well as a “programmed civic space,” according to public documents.
Gilbert wants a signature building that could include some type of satellite campus by a college or maybe a cultural institution. He’s hired a highly acclaimed New York architecture firm, SHoP. Hudson’s closed 33 years ago.
■Apartments near Comerica Park: The Ilitch family, whose holdings include the Detroit Tigers and Red Wings, is expected to announce details for the new Woodward structure. Early plans call for up to 300 apartments in a five-story building. It will be built on what are now surface parking lots along Woodward and Montcalm.
Across the street, Ilitch Holdings is building its Little Caesars World Headquarters Campus. And of course, the $627 million venue future home to the Red Wings is being built just north of downtown along Woodward.
The arena, to open in 2017, aims to be an economic catalyst that will transform 45 blocks around the venue with hundreds of new residents, dozens of new stores, offices and revamped public spaces. That plan is called District Detroit.
■Old Tiger Stadium site: The empty land where the baseball stadium once stood is as close to becoming redeveloped as it has ever been. In late 2015, City Council paved the way for the Corktown property to soon become controlled by a group that wants to build an athletic complex that could host youth games. The baseball diamond is slated to be the site’s public square for soccer and football games, as well as baseball and day camps, on a synthetic turf field.
Detroit PAL would open a 9,300-square-foot headquarters at the site, officials have said. Another part of the plan includes a four-story residential building, a row of townhouses and 30,000 square feet of retail space.
Major details, including corporate sponsors, are expected to be announced in January. Construction could begin in March. The project could be completed by spring 2017.
■Corktown development: Across Trumbull from the Tiger Stadium site, Metro Detroit businessman Anthony Soave plans to build a blocks-long retail and residential development. The broad outline of the plan was confirmed in late 2015. It’s expected to include hundreds of residential units and additional retail. It could include the conversion of the Checker Cab building at 2128 Trumbull into residential lofts. A separate multistory residential building could be constructed behind the cab building.
■State Fairgrounds: The former fairgrounds at Eight Mile and Woodward closed during the Great Recession. City officials have been looking for a new life for the 150-acre site ever since. Two years ago, a group of developers — including Earvin “Magic” Johnson, entrepreneur Marvin Beatty and Southfield development firm Redico — joined efforts to come up with a feasible development.
In early 2016, that team hopes to unveil a revised plan. In addition to retail, it could include a senior living facility, a charter school and possibly a major public transit area, according to city officials.
The delays in the State Fairgrounds project reflects the different track most of Detroit remains on when it comes to luring new developments and people.
One leading indicator is the dearth of home mortgages over the past few years. Most sales of homes in Detroit have been paid with cash, while the number of buyers able to get mortgages have been fewer than 600 a year from at least 2012 to 2014, the latest year for which data is available.
Many developers and others say there is more interest by investors in Detroit neighborhoods, including southwest, the University of Detroit area, Palmer Park, Old Redford, Milwaukee Junction, North Corktown and East English Village.
“Mayor Duggan and his people are doing a really good job of improving those areas and attracting potential,” investors and residents, Jackson said.
Developer Larson and others agree.
“Everyone recognizes that the success of neighborhoods is just as vital as getting new development downtown and Midtown,” Larson said.