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Herman Kiefer developer touts site for innovation hub, medical technology complex

Christine Ferretti
The Detroit News

Detroit — A developer for the former Herman Kiefer hospital site is marketing the sprawling grounds for a potential innovation hub, garment manufacturing or medical technology complex. 

Ron Castellano, managing member of Herman Kiefer Development LLC, on Thursday shared his vision for a "commercial, job-generating campus" across the 11 buildings on the 860,000-square-foot site. 

During an annual update on the planned $143 million, eight-year project, Castellano touted the concept of an International Center for Automobile Innovation, adding he's brought on a brokerage firm to help market the campus to attract tenants.  

The developer bid on the Herman Kiefer project in spring 2014 and spent nearly 19 months negotiation with the city on terms.

Castellano bid on the project in 2014 and spent another 19 months working on the multi-year agreement with milestones with the city. The development firm closed on the sale in winter 2018. 

"We take any interest from any industry and try to translate it in how it works with our site," Castellano told about 100 people during a Zoom meeting, noting the team has multiple conceptual videos and renderings.

"We've looked at medical technology, and right where we are now is really brainstorming all the different options and industries that could potentially use the site," he said. "It's a special site. It's in the middle of a neighborhood. This isn't out in an industrial area, but I think that is something that's very attractive to make this walkable community, as it was when this hospital was built."

The development team noted an extension for completion of the first phase of work, due to the COVID-19 pandemic, and gave an overview of the massive revitalization plan for the city's west side that calls for rehabilitation and reuse of seven medical complex buildings and 462,605-square-foot main hospital, the former Hutchins and Crosman schools, as well as the JTPA nursing school.

Castellano's development agreement also calls for the maintenance of 300 empty lots and 115 vacant homes in the Virginia Park neighborhood that he had the option to buy.

Sixteen houses will be rehabilitated by June 30, 2021, another 92 will be rehabbed by June 30, 2022, and the remaining are expected to be finished by March 31, 2024. 

Ron Castellano, of Herman Kiefer Development LLC, acquired the Herman Kiefer Hospital complex in a $925,000 deal approved by Detroit’s City Council in the fall of 2015.  Castellano, spoke to Virginia Park residents about their concerns in Detroit on Thursday, September 19, 2019.

The initial deadline for work at the campus itself remains set for 2024, officials said Thursday.

Castellano acquired the complex in a $925,000 deal approved by Detroit’s City Council in fall 2015. The hospital ceased operations in October 2013. 

While the city worked through title issues to transfer ownership, Castellano began securing the campus grounds and maintaining the neighborhood landscaping. His company also boarded up the Detroit Land Bank Authority homes it has the option to buy. 

The project is among the first in the city operating under Detroit’s community benefits ordinance. The law, approved by the City Council in November 2015, lays out a process for engaging the community to negotiate job guarantees and other factors for projects worth at least $75 million.

The development team, officials said Thursday, met its obligations in boarding up, securing and maintaining the campus and restoring an area play field.

It's remained in compliance with efforts to partner with local groups and residents to rehabilitate 20% of the homes targeted in the project, employ Detroit-based contractors and residents and on track with its timeline for programs and tenants.. 

Also, a landscape team, Castellano said, goes through the neighborhood weekly, weather permitting, to clear out alleys, broken tree limbs and trash.

Castellano said the development company has invested about $8 million as of Oct. 1.  "It's an ongoing process but we're really getting there," he said. "Hopefully residents can see the progress."

The commitment to host quarterly community meetings, however, has been off track due to COVID-19.

"We are complying," Castellano said. "We will hit our hurdles."

Some, including Dr. Althea Armstrong, a resident and member of the project's Neighborhood Advisory Committee, have pushed back on a tree-planting initiative.

"The majority of the neighborhood does not want those trees. It's culturally inappropriate," she said. "This is not a commercial area, this is residential."

Castellano on Thursday noted there's been "a lot of misinformation" over the tree planting and "I think we can do a lot more community engagement." 

"It's a temporary use for vacant land," he said. “It’s not the goal to plant trees and say ‘we’re done.'"

Besides the COVID-19-related delays in hosting regular meetings, the project has also put longtime plans for a hotel and an event space "on pause," Castellano said.

He said a landscape crew was held up last winter at gunpoint and equipment was stolen. But "we just keep pushing through."

"It's been tough. We're still moving forward and rethinking our plans with COVID."

They've been working with the city in recent months on options for the site, including use of the hospital grounds for a temporary site for COVID-19 patients. 

"We did a lot of engineering ... on how to transform the space very quickly in helping with the situation," he said. 

The developers talked with upwards of 30 operators to take on the concept of creating a general store. 

"To date, no one has taken on the project," he said.

Attendee Elyse Wolf asked Castellano about ensuring opportunity for residents to buy the land bank homes after they are rehabilitated.

"How will you maintain affordability," she said. 

Castellano said the goal is home ownership.

"We're even looking at ways to put that in the deed," he said. "The intended result is to have all the homes for sale in the neighborhood."

cferretti@detroitnews.com