Ilitches linked to 147 unused Detroit properties

Louis Aguilar
The Detroit News

Correction: This story has been updated to reflect that an Ilitch-linked company owns the former Eddystone building in Detroit. 

Detroit — It's not just land near Little Caesars Arena that remains undeveloped by the Ilitch organization.

An extensive count of all property holdings in the heart of Detroit linked to the Ilitch family reveals blocks of unused properties near their other prominent venues, stretching from downtown to Midtown/Cass Corridor to North Corktown, a Detroit News analysis found. 

The total amount of idle land, 147 properties, helps explain intensifying criticism against one of the most high-profile development companies in Michigan. The undeveloped land casts doubt on the organization's ability to develop, as promised, an inner-city enclave around the new arena filled with residents and commerce, some analysts contend. 

A block-long vacant building on Hobson at Noble Street.

It's also causing rising pushback that is holding up Ilitch efforts to demolish historic buildings, add more parking and construct one new development that could take up a city block. 

Earlier this year, The Detroit News examined public records of more than 500 properties in and near the arena — the area known as "District Detroit" — and found Ilitch-linked companies own or control at least 60% of the properties in the targeted area. The Ilitch group has said it plans to create five "new neighborhoods" in the 50-block District Detroit.

Despite promises the area would be transformed by 2017, more than a dozen blocks are now more vacant than before, a May analysis by The News found. 

A new examination of hundreds of properties just outside the District reflects  a years-long pattern by the Ilitch group of buying up swaths of land near its marquee venues and letting the real estate go undeveloped for years, according to property records, state records, tax assessments, public comments by Ilitch officials and interviews.   

The Ilitch-linked holdings outside of District Detroit total 77 idle properties — 64 empty lots and 13 vacant buildings, the News found.

They include:

  • 44 vacant lots and eight unoccupied buildings around Grand River Avenue that form a virtual dead zone around the Ilitch-owned MotorCity Casino Hotel
  • A fenced-up block of grassy lots on Third Street across from a homeless crisis center that the Ilitch group backed out of buying for $1.5 million earlier this year.
  • A shuttered pair of historic Beaux-Arts-style buildings on a bustling Peterboro Street that the group has taken initial steps to potentially demolish and turn into parking lots.

There are no public plans to revive the empty properties that lie outside the borders of District Detroit.

The Ilitch organization maintains it has "a proven track record of steady and balanced development," according to a written statement from Olympia Development of Michigan, which handles real estate issues for the family-run business empire. 

"As a matter of principle, for over 30 years, through thick and thin, we have stood with and by this hard-working, proud and resilient city," the statement reads. 

 For decades, the organization bought the properties by using dozens of limited liability companies that often cloaked its link to the group.  The organization rarely discusses its property holdings. 

Within the District, the group controls 46 empty lots and 24 vacant buildings. The group has plans for about a dozen of those vacant properties, but those efforts have faced delays and have not become reality.

Overall, The News has identified 391 properties owned by Ilitch-linked companies inside and outside District Detroit. Of those, 147 are vacant and 163 are being used for parking.

The llitches own a vacant house at 3143 Park Avenue.

 In many cases, the properties have been idle for years, if not decades.

The Fox Theatre, the Hockeytown Cafe and the MotorCity Casino Hotel are the only historic buildings the organization has restored and filled. Other planned projects -- such as the restoration of the historic Eddystone building, northwest of the arena -- remain to be completed. 

There is now much speculation why the Ilitch group hasn't executed its plans for District Detroit.

The Ilitch vision is based on a "suburban dreamland," said Conrad Kickert, a University of Cincinnati professor of urban design who has studied the history of downtown Detroit.

An informational poster about Ilitch Land Holdings in Detroit is displayed at the meeting.

Its sports venues, live performance spaces and casino are designed to keep people within those buildings. They attract a large suburban crowd who drive in for the event and often leave quickly after, he said.

The Ilitches "have adapted the language of walkable neighborhoods, but everything they have built is the opposite of that goal," said Kickert, author of "Dream City: Creation, Destruction and Reinvention in Downtown Detroit."

The group's instinct to buy properties around its major venues is a strategic move, Kickert said.  "Empty is better than dealing with properties that may be troublesome in some way and you don't control," he said. 

It is unfair to paint the Ilitch group as uncaring landowners or assume the group will never revive its properties, a local real estate analyst said.

"The Ilitches' committed to the city when most private investment fled," said John Mogk, a Wayne State University law professor who follows Detroit development.

 "Dan Gilbert may have made it look easy, but it remains very tough to get private investment, financing for major deals," he said, referring to the founder and chairman of Quicken Loans Inc.

Detroit City Council member Raquel Castaneda-Lopez puts her hands together as she gratiously says thank you as meeting attendees clap and thank her for helping with the NAC.

Gilbert's Bedrock group and its affiliates have bought more than 100 downtown properties this past decade and has renovated and found new tenants for dozens of buildings. 

"Maybe the truth is (the Ilitch group) has been out-hustled by Dan Gilbert and Midtown Inc."  in finding tenants for its empty space, Mogk said. The nonprofit Midtown Detroit Inc. is the main development agency in the area just north of the Ilitches' District Detroit.  Midtown Inc. has helped attract billions in investment, resulting in scores of new shops and residences, among other developments. 

Two years ago, Little Caesars Arena debuted with the promise it would spark five new neighborhoods.  "We're just starting," Chris Ilitch, president and CEO of Ilitch Holdings Inc., told a crowd of 1,900 who attended the Sept. 5, 2017, ribbon-cutting ceremony of the $863 million sports-and-entertainment complex. 

Filling 50 blocks with new offices, stores and residences is a linchpin in the Ilitch group's argument of why it needed $324 million in taxpayer money to help build the arena. 

The Ilitch group has succeeded in creating big-ticket attractions on eight blocks of Woodward Avenue. It includes Little Caesars Global Resources Center, the $150 million, nine-story building still under construction that will house 700 workers; the Fox Theatre, the 5,000-seat venue and office tower, which is the current Little Caesars headquarters; Comerica Park, the Wayne County-owned baseball stadium that’s home to the Ilitch-owned Detroit Tigers; Little Caesars Arena, the 20,000-plus seat venue that’s encircled by retail and office space; and the Mike Ilitch School of Business at Wayne State University, built on land owned by the Ilitch group. 

The llitches own Woodstock apartment building on the 400 block of Peterboro St.

Also on Woodward, the Detroit Medical Center broke ground in May on a $70 million sports medicine facility, which will feature ground-floor retail, on Ilitch-owned property next to the arena. 

But multiple plans intended to bring hundreds of new residences and shops into the neighborhood remain unfulfilled. 

The Ilitches have intentionally hollowed out Cass Corridor, many residents contend.

Detroit resident Jason Gapa lived in a historic apartment building, the Berwin, bought in 2016 by a limited liability company. The company, on paper, had no link to the Ilitch group. Under the new owners, the Henry Street building began to collect city blight tickets for roach and rodent infestation, among other health hazards, public records show.   

Gapa is a member of a City Council-appointed neighborhood advisory committee that has met with Ilitch officials the past five years about the group's plans. More than two years ago, Gapa noticed a rendering provided by the Ilitches' Olympia Development of Michigan, ODM, of the street he lived on. The image showed the Henry Street block without any buildings. The new arena is one block away. 

A empty lot with the former Michigan Consolidated gas company in the background on Noble Street.

"Someone from ODM said that it was just because they couldn't include every building in the district" in its renderings, Gapa said. Last year, the Ilitch group revealed its ownership to the apartments when it sought city approval to raze nearby buildings on Henry and Cass Avenue. llitch officials at the time said it "envisioned" for the block a new "high-density, mixed-use development that will contribute to Detroit's globally recognized comeback." 

The neighborhood advisory committee ended its five-year term last month. Its final public meeting in September was a call to arms for city officials to change the way it deals with rich landowners who allow properties to stay vacant for years.

"All they care about is their own self-interest. They don't give a damn about developing anything else," said Eric Williams, a member of the committee. 

The Ilitches have "profoundly failed" to live up its promises, said Francis Grunow, chair of the group.

The Ilitch plan to apparently clear the Henry Street block, which includes the Berwin and another occupied apartment building, caused an uproar.  As a result, city officials created a historic district. That means the Ilitch group now faces extra hurdles to get approval to raze the Henry Street buildings, along with some others on Cass Avenue. The Ilitch group has not provided an update of its plans for months. 

The Ilitch group also is at risk of losing development control of a 13-story empty building, the Eddystone, that looms over the northwest edge of Little Caesars Arena. The Ilitches didn't fulfill their promise to renovate and re-open the building by fall 2018.

Neighborhood Advisory Committee chair Francis Grunow begins the final meeting.

The Ilitches unveiled a $41 million development plan for the Eddystone this year. The city imposed a series of deadlines to ensure the plan moves forward. If the group falls behind schedule, the city can essentially take away the project from the Ilitches. 

The group also faces neighborhood resistance for its plan to build a 700-space parking deck next to the MotorCity Casino Hotel.  Dozens of residents showed up a planning commission meetings this summer, urging officials to deny the Ilitch request based on the group's development record.

MotorCity Casino officials said they are working with the city to develop the area around the casino. The organization recently gave $875,000 for a city planning study called the Greater Corktown Framework. It is intended to shape the future development of Corktown and North Corktown, city officials said. 

Many Ilitch supporters show up at public meetings, too. Some are Detroit residents who are longtime employees of Ilitch venues and grateful for career opportunities. Others are minority-owned contractors who often credit the Ilitch group for helping launch their businesses and have remained loyal customers. 

The Ilitch group is working hard behind the scenes to fill the blocks of empty properties, the company said.

"Today, our work continues with numerous projects underway," the company statement reads.  "Make no mistake: we are committed to Detroit and we are here to stay."

Twitter: @LouisAguilar_DN