Where the Detroit property bargains are

Louis Aguilar
The Detroit News

Small entrepreneurs in Detroit continue to push the boundaries of where to buy property, venturing well beyond the “greater downtown” in search of cheap land that often needs pricey overhauls.

As recently as five years ago, the bargain spots for many small businesses were parts of downtown, Corktown and the Cass Corridor. Now, all that’s part of the 7.2-square-mile downtown area where billionaires, out-of-town developers and influential nonprofits drive an increasingly upscale scene.

Real estate investor Jerry Belanger says he will make the historic National Bohemian House “as beautiful as ever.”

So for several years at least, a steady number of small businesses and others have gone to various other pockets of Detroit, ranging from the University District on the northwest to the Villages area on the east side, and Mexicantown on the southwest.

One hotspot is Core City, just past the northwest border of Corktown and Woodbridge. Its main strips are Warren Avenue, Grand River, Martin Luther King and Michigan.

Core City’s most familiar Michigan Avenue storefronts are the stalwarts HyGrade Deli — seen in the “Batman v. Superman” film — and the adjacent Mike’s Famous Ham Place. There’s another more infamous landmark: the Highwaymen Motorcycle Club. It’s an all-black, cinderblock building at Michigan and Tillman whose members ran afoul of the FBI in 2007.

Yet many are buying up property around the Highwaymen building.

“A lot of things under the surface are about to become a lot more visible,” said Willie Campbell, executive director of the nonprofit Core City Neighborhoods. It was nearly 15 years ago that Campbell helped lead the effort to build more than 100 single-family homes and town homes for moderate- to low-income residents. Many credit it for helping stabilize the area.

Still, the main landowner in Core City is the Detroit Land Bank, according to Loveland Technologies, which tracks property ownership. The land bank has become a repository for city property inherited from the county foreclosure tax sale when properties don’t sell.

In Core City, that means there are lots of empty spaces where homes used to be as well as blighted storefronts and houses.

“Now, I’m hearing lots of business people, investors, are buying and renovating properties. Let’s see what happens,” Campbell said.

One investor is Jerry Belanger. A little over a decade ago, Belanger bought a dilapidated downtown building that now houses the thriving Cliff Bells, Park Bar, the Elizabeth Theatre and the new GoGo’s Hawaiian eatery. The building had been empty for at least a decade.

“I remember before I could even start to clean out the years of junk, I had to convince the drug dealers to stay out” of the downtown property, Belanger said.

That’s not too different from what Belanger is doing now for some of the dozen parcels he’s bought on Core City’s Tillman Street, just north of the Highwaymen club. Belanger’s Tillman properties include three empty homes he bought in the county tax foreclosure auction over the past two years

Before he boarded up the homes, Belanger found everything from bullet casings to dirty needles and human waste in them. Recently, he hired local crews to clean up years of debris from squatters and others — mattresses, piles of old clothes and the occasional family photo.

Belanger’s Tillman Street prize is the Bohemian National Home. The two-story building opened in 1914 as a men’s social club for Czech immigrants. It lasted as a music venue until the late 2000s; part of it still exists as residential. Much of the building is ravaged and Belanger estimates it will take $1.5 million to return the Bohemian back into a performing space, bar and residential complex.

“I will make this historical building as beautiful as ever,” Belanger said.

Belanger joins a number of investors in the neighborhood. Across the street from the Highwaymen club, lawyer Christopher Hajek just set up shop in a two-story building that he bought for $50,000 last year. He plans lofts. Three years ago, a couple bought a former bank building and bar on Michigan for $65,000. It’s about two blocks from the biker club. The bank is now their home.

Recently, it became public that entrepreneur James Cadariu, the roast master at Great Lakes Coffee Roasting Co., purchased a former fire house, Engine No. 10, on Vinewood near West Grand and Martin Luther King. Plans are to convert the building into a coffee roasting place, a commercial kitchen and residential, according to the city zoning request. Cadariu declined comment. The city had put up the former firehouse for bid in 2013 for a minimum $128,000.

A pair of 20-something entrepreneurs, Kyle Dubay and Bo Shepherd, are the first to open a new storefront on Michigan in Core City in several years. Last month, the pair opened Woodward Throwbacks, which uses reclaimed wood and other material to become furniture and other goods.

They have been operating the business for several years, first out of their garage. But they have national and local retailers as clients now and needed a permanent space. They found a former deli that they bought in late 2014 for $30,000, public records show.

Kyle Dubay, left, and Bo Shepherd are co-owners of Woodword Throwbacks, a woodshop and store that uses reclaimed materials in their products, on Michigan Avenue.

“We feel lucky to have bought when we did,” Shepherd said. The building is still surrounded mainly by empty storefronts. But they keep hearing of prices going up and people willing to pay those rising prices.

“To be honest, I thought maybe we’d had to wait three years to see things change,” Dubay said.

“But the change is happening in a year. I don’t think we could afford to buy here now.”

Twitter: LouisAguilar_DN