Warren rejects upscale hotel proposal near Tech Center
Warren — The city has thrown out a plan to build an upscale hotel across from the General Motors Tech Center.
Mayor Jim Fouts said the Downtown Development Authority unanimously rejected the proposal after the developer made a series of changes, including asking the city to borrow $7 million from the sale of bonds to help finance the project.
The Lansing-based Boji Group also eliminated a parking structure from the original plan, downgraded the hotel from first class, and reduced the number of hotel rooms and their size to cut costs, Fouts said.
The cost of the project on Van Dyke near Kennedy Circle was an estimated $38.6 million.
“Simply put, I could not in good conscience as mayor recommend any action except rejection of the plan because of the financial demands of the Boji Group on the city,” Fouts said in a statement. “I cannot put our city millions of dollars in debt for a hotel project that would, in effect, put the city in the hotel business.”
John Truscott, a spokesman for the Boji Group, said the developer was “disappointed.”.
“We were looking forward to working with our corporate partners on what would have been a dynamic project for Warren,” Truscott said. “A lot of things could have been worked through, but they (city officials) just didn’t seem really willing to work on it so we will just move on.”
Other requests that came later from the Boji Group were imposing a hotel tax on all rooms to help fund construction and leasing the land from the city for 100 years at a cost of $10,000 a year, Fouts said.
“Which I thought was ludicrous,” he said. “None of us are going to be around in 100 years.”
The city, Fouts said, had made enough concessions for the project.
Warren committed to a commercial property tax incentive that would have saved the Boji Group nearly $6 million over 12 years. The city also was willing to waive $500,000 in building inspection fees, Fouts said.
The hotel was planned on an area of Van Dyke between 12 Mile and 13 Mile that has seen new development over the past years with Warren city offices, a $1 billion investment by GM at the Tech Center and retail.
The area suffered a setback in early 2014 when Lowe Campbell Ewald moved more than 500 employees out of its building to downtown Detroit. GM bought the ad agency’s building and is expected to move 800 workers into it while renovations are made at the Tech Center.
Boji Group presented the hotel plan to the city in early 2015.
At the time, Fouts said the firm promised the hotel would include small specialty shops, a nightclub, banquet center and would mirror luxury hotels such as The Townsend Hotel in Birmingham.
Fouts said he was initially excited for the hotel because the area is becoming the center of new development.
“Over the course of the last year they gradually downsized what they would give the project,” Fouts said. “Ultimately, they asked for a tremendous financial commitment and I felt I couldn’t gamble with taxpayer money.”
City officials are now open to inquiries from other developers for the land, Fouts said.
“I think we have a good location and we have a vibrant vigorous development in the downtown area,” he said.