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The Detroit City Council on Tuesday is expected to green-light a land deal paving the way for a plan to redevelop the shuttered Herman Kiefer Hospital complex and largely vacant surrounding neighborhood.

Visible from the Lodge Freeway, the 18-acre site comprises 10 buildings, including three former schools and the 424,000-square-foot hospital. The complex, with an Albert Kahn-designed expansion, has been empty since October 2013.

New York-based developer and architect Ron Castellano bid on the project last spring and has spent nearly 19 months hammering out an agreement with Detroit’s administration for the project that could exceed $75 million.

The undertaking will be Castellano’s first in Detroit. It’s a venture he says he’s eager to take on with the goal of transforming the depressed neighborhood into a destination.

Specifics aren’t yet determined, but Castellano says there’s potential for a mix of housing, retail and office space with a core emphasis on preserving the historic character of the area and incorporating the needs of its residents.

“A lot of people there are holding on to the neighborhood. They see a vision and see potential,” said Castellano, who purchased a home in the neighborhood and is relocating to the city. “That’s where we want to come in and boost that and show that we do care about it and take an interest, as they do.”

To achieve that goal, Castellano’s Herman Kiefer Development LLC has partnered with the city on the years-long agreement to save, rehabilitate and creatively reuse the seven medical complex buildings; the former Hutchins and Crosman school buildings; JTPA Nursing school; and about 100 vacant land bank homes in the Virginia Park neighborhood.

“The original proposal was to not promise the world and drop it in there and hope for the best. It’s a lot more of a process,” Castellano says. “We didn’t want this to be just an island in the middle of this neighborhood.”

The land transfer is set to go to the full council after it was unanimously voted out of a subcommittee on Thursday. The city’s Planning Commission and council previously signed off on a master plan and zoning changes to permit mixed-use development on the site.

The council’s support on Tuesday will give the city authorization to enter into its development agreement with Castellano’s firm.

Under the deal, the developer will acquire the property for $925,000 with guarantees it will secure, maintain and weatherproof all vacant buildings and maintain any blighted open space. Efforts to secure the properties are expected to begin immediately upon council approval and put local residents to work.

The help couldn’t come soon enough for Lee White and his girlfriend, Lorraine Evans, who have spent the past year fixing up a two-family flat on Hazelwood.

The house is just south of the main hospital building and down the block from the vacant Hutchins Middle School, a daily haven for crime and scrappers. White says the area is “rough,” but he believes it can be revived.

“It can come back. I know it’s coming,” said White, 58. “We’re just waiting on them (the developer) to do their thing and we’ll keep working here.”

Evans, 47, says she’s taken it upon herself to tidy up a basketball court behind the old school. Most recently, she pulled up weeds alongside Castellano.

“I was willing to work. I want to work. I’ve been trying to keep it clean around here,” she said. “We ain’t got no help. We can’t do it by ourselves.”

The deal outlines required annual investments toward rehabilitation and development. The development team must spend a minimum of $1 million annually for the first five years, and at least $2 million per year in years 6-8.

In addition, by the fifth year — or first deadline — the development team must either ensure that at least 35 percent of the site is in use or have contributed at least $20 million toward the project. By the final deadline in year eight, at least 80 percent of the site must be active or the development group must have achieved an investment of at least $75 million.

Vince Keenan, neighborhood manager for Detroit’s District 5, says the lengthy term of the agreement will provide the city and residents with safeguards.

“The time and sheer scale of the project is ultimately in the best interest of the neighborhood,” he said. “It gives us time to make sure everything is moving the way it needs to move.”

The first phase, Keenan noted, is front-loaded with improvements for the streets surrounding the defunct medical complex, including stewardship of empty lots and board-ups of vacant homes in the area bounded by the Lodge Freeway to the east, Clairmount to the north, Virginia Park to the south and Rosa Parks Boulevard to the west.

The city issued a request last spring for developers to submit proposals for the site and received two bids. Castellano was selected, in part, because of the holistic vision for the site and his “creative, but realistic” approach, says David Williams, a senior adviser to Mayor Mike Duggan with the city’s Jobs and Economy Team.

The developers and city officials will partner on efforts to maintain open space, neighborhood stabilization and housing revitalization that will engage local community groups and stakeholders.

“Our overall strategy here is to make sure that folks that have been here for a long time feel engaged in the process and understand that they are part of the future of the overall process,” he said.

Within 90 days of the land sale closing, the development firm must secure the vacant houses and associated lots. The developer will have a one-year option to purchase the vacant homes if they commit to rehabilitating them within 18 months.

The development team will clean and maintain open spaces by, at a minimum, mowing the lawns and restoring ball fields and courts. It also will agree to program a slate of events and implement a programming and use plan for the site, according to the agreement.

Councilwoman Mary Sheffield, who represents the southeast Detroit district, says giving the community a voice will be key. She’s calling for the establishment of a community advisory group to weigh in on the plans as they progress. Sheffield also pushed for agreement terms that ensure at least 20 percent of the vacant homes will be earmarked for rehabilitation by a community association.

“It’s going to have a huge positive impact on the district. The population in that area had decreased so much. The blight is really widespread,” Sheffield said. “For me, it’s protecting the existing residents and making sure that they have a role and they are included in the revitalization.”

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Councilman Scott Benson lauded the creative approach, but says he’s wary of the developer’s financial capacity to carry out the vision.

“I applaud the person taking it on,” he said. “Now, do they have the money?”

Detroit spends about $500,000 annually for security at the main hospital building, and at least $100,000 more for maintenance and utilities. Williams noted the developer will assume those costs after the land transfer gains council approval.

Officials previously considered demolishing the hospital and its associated medical buildings. An undertaking that officials say would have cost about $12 million.

Detroit’s new Planning and Development Director Maurice Cox has vowed to council members that the project will include deep community engagement and analysis.

The neighborhood, he said, has lost easily half of its residential population over the last 10-15 years. But the remaining residents, he added, “would like to see this neighborhood thrive.”

cferretti@detroitnews.com

Hospital history

The building, on Hamilton between Taylor and Pingree, was devoted to treatment of communicable diseases, tuberculosis and indigent maternity cases. The permanent, well-equipped contagious disease hospital accepted its first patients in 1911. It’s named after Herman Kiefer, a prominent local physician known for treating the poor.

By 1918, the number of cases admitted to the hospital had reached 3,495. A year later, the campus expanded to five brick pavilions, one brick service building, one frame cottage for smallpox and a frame grouping consisting of one two-story service building, 12 cottages for tuberculosis, and a nurses home.

Detroit architect Albert Kahn later was commissioned to design an expansion. It was completed in 1928. By 1930, the complex had 1,265 beds spread out over six pavilions and the main hospital.

In 2010, the city considered shutting down Herman Kiefer for budgetary reasons. A year later, however, Mayor Dave Bing reversed course, and moved the Department of Health and Human Services from its location on the city’s east side to Herman Kiefer.

Shortly after, the department was shut down by the city and health service roles were taken over by a nonprofit.

The hospital ceased operations in October 2013.

Source: City records and Detroit News research

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