Port Authority open to selling $22M terminal building

Joel Kurth
The Detroit News

Detroit — Four years after it opened, a publicly funded $22 million public dock and terminal building along the Detroit River could be up for sale if the price and other details are right, Detroit/Wayne County Port Authority officials acknowledge.

The building next to the Renaissance Center was built to attract cruise ships. One cruise ship has docked in the past two years, though, and the building has been used primarily to host weddings and corporate events.

“There’s always been some question about, ‘Can you sell the building?’ We’ve had some discussions,” said John Loftus, who was hired last year as executive director of the independent authority that was created in 1978 to develop and promote waterway commerce and is governed by representatives from the state, city and Wayne County.

“If there is a better way for us to operate the building through a third party, I’m open to ideas,” Loftus said. “We can operate anywhere. I’m not closing the door on anything.”

Port officials have floated the idea of a sale past companies including Troy-based Continental Services, which has exclusive catering rights to the port building. The company is owned by Alex and James Bardy, who also operate a well-known political action committee, Sterling PAC of Continental Services that has donated tens of thousands of dollars over the years to local officials.

Continental spokesman Stu Sandler described the talks as “more brainstorming than anything.” He said there were “no practical discussions on leasing or buying the building” because the likelihood of either is remote.

“Some have approached Continental, as well as other entities, about possible management options,” Sandler said in a statement.

“Continental has great expertise and abilities that many have to come to rely on, so these conversations are not surprising.”

Huge obstacles could impede an outright sale. Because federal funds paid for more than 80 percent of construction costs, any sale likely would require repayment of those grants by the authority that operates on a $1 million budget comprised mostly of subsidies from the state, Wayne County and city of Detroit.

The discussions underscore the problems with the 21,000-square-foot building. Next to the Renaissance Center on Atwater and Bates, the facility is glass and steel — so heating and maintenance costs eat up 15-20 percent of the authority’s annual budget, Loftus said.

Two years ago, the authority used a separate $1 million federal grant to build a processing center for the U.S. Customs and Border Protection on the first floor of the building.

It was intended to process cruise ship passengers and includes X-ray machines, holding cells and a lab to test foreign produce. Customs officials refuse to use the space because it doesn’t meet their standards, though, and port officials say they can’t afford $170,000 computer and camera upgrades to make it suitable.

The authority’s offices are in about half the building, named after its funding champion, retired U.S. Sen. Carl Levin. Continental markets much of the rest as Waterview Loft@Port Detroit, which its website touts for its “elegance” and “urban chic” atmosphere.

Wedding parties start at $18,500 for 100 people.

Continental officials said the contract was competitively bid and their events have brought 40,000 people to Detroit since 2013. The company also owns the Infinity and Ovation party yachts that pay the port $500 each time it uses the dock.

Between the parties and the dock fees, Continental expects to pay the authority $223,000 by the end of the year from 44 weddings, 41 corporate events and 38 dockings.

“We’re a big contributor to the port’s budget, and Continental is in no way impeding the core business of the authority,” said Steven Rybicki, a Continental vice president.

“Our events are bringing people to Detroit who otherwise wouldn’t come.”

He defended wedding costs, saying they are all-inclusive and include the cake, flowers and disk jockey. Costs also are higher because events have to be planned to comply with Homeland Security guidelines, Rybicki said.

Loftus’ predecessor, John Jamian, told The News the building and dock were used for more events and community gatherings before his three-year contract wasn’t renewed last year. He supplied multiple photos showing cruise and Navy ships at the dock from 2011 to 2013.

“We had the place buzzing the whole time I was there,” Jamian said. “Sometimes, we had parties, but they were public parties. People involved in precincts, transportation meetings, (government) meetings. I had a plan for the whole space.”

Loftus said his primary goal is increasing economic activity at the port. He hosted a tour of lawmakers Tuesday in hopes of changing state law to allow ports to easily upgrade.

He said the building has great potential, despite recent issues.

“I’m open to all options,” he said. “How do we make the best use of this great asset?”


Twitter: @cityhallinsider

Staff Writer Laura Berman contributed.