20150928-NEWS--0032-NAT-CCI-CD_--
9/25/2015
6:10 PM
Page 1
C R A I N ’ S D E T R O I T B U S I N E S S // S E P T E M B E R 2 8 , 2 0 1 5
32
Developers aim to rejuvenate city sites Among targeted projects: Rec center, Brush Park By Kirk Pinho kpinho@crain.com
The gym where Joe Louis trained. Part of an historic neighborhood that has fallen into decay. The area where Ty Cobb and Al Kaline once stood at home plate. Even the site of a notorious public housing project. All of those sites, and perhaps more, are inching toward new life this year as the Detroit City Council is expected to consider approving development agreements before 2015 comes to an end. And as those sites come under control of developers for new projects, that’s fewer options for prime city-owned properties in and around downtown for developers to salivate over, said George Jackson, the former president and CEO of the Detroit Economic Growth Corp. , who last year founded Ventra LLC, a consulting and development company in Detroit. “On the riverfront and downtown, (the number of quality developable sites owned by the city) is shrinking and you’ll have to go more to the privately owned ones,” he said. At least $234 million in development and redevelopment has been formally identified for a half-dozen or so projects since the city issued requests for proposal for the sites. Those are just the ones that have been publicly announced. For example, just outside the central business district sits the De troit Housing Commission-owned site that used to house the Brewster Douglass housing projects, demolition of which finished last year. An RFP for development of the 18-acre site could be issued by the end of the year, said John Roach, Mayor Mike Duggan’s spokesman. Development experts say the site is primed for new construction, particularly when coupled with what’s planned immediately west
DEVELOPMENT FROM PAGE 1
“They are real estate at the epicenter of Detroit’s recovery,” said Jeffrey Schostak, vice president and director of development for Livonia-based Schostak Bros. & Co. “Hudson’s and Monroe are clearly the best two sites.” he said. That’s because of their prominent locations and size that can accommodate large development projects in thriving areas downtown. Far less lodged in Detroit lore than the Hudson’s site but no less desirable, the Monroe Block was floated as the planned site for a new $111 million Meridian Health headquarters. That would have been the first new downtown office building construction in nearly a decade, but it was scrapped in 2014. Meridian instead chose to enter a 50-50 joint venture with Gilbert’s
as space for other uses such as retail, hospitality, restaurants, an incubator kitchen and educational uses. The site, outside the hot development spots in greater downtown, is not daunting to Castellano. “In New York City, I was doing residential projects on one of the most crime-ridden corners of the city, and the units sold out in a week,” he said.
and north at the Brewster Wheeler Recreation Center , off I-75 south of Wilkins Street, and in Brush Park , where an 8.4-acre mixed-use development is underway. What follows is a look at the status of the city’s RFPs and other sites controlled by the city or its various economic development agencies:
Brewster Wheeler Recreation Center Announced in April, the $50 million redevelopment of the recreation center where Joe Louis once trained is expected to include a new restaurant and meeting space, 100 to 150 residential units, and an acre of green space on 6.2 acres. The council is expected to approve a development agreement this fall, Roach said. The development team includes KC Crain, executive vice president/director of corporate operations for Crain Communications Inc. , parent company of Crain’s Detroit Business; restaurateur Curt Catallo; Livonia-based Schostak Bros. & Co.; and John Rhea, a Detroit native who is managing partner of Rheal Capital Management LLC. Crain, also group publisher of several Crain publications, co-owns the Vinsetta Garage restaurant in Berkley with Catallo. Catallo also is owner of the Clarkston Union and Union Woodshop restaurants in Clarkston. The recreation center is expected to house the restaurant and anchor the redevelopment. Land on the southern half of the property would be redeveloped into new housing and commercial space. The development would also include a kitchen incubator, a culinary arts studio, catering space, community and meeting space, and outdoor event space. The building is 52,000 square
Bedrock Real Estate Services LLC to purchase the 1.1 million-squarefoot former Compuware Corp. headquarters building on Campus Martius and an attached 3,000-space parking deck for $142 million last year. Meridian is taking up to 330,000 square feet in that building. Gilbert, through his Rosko Devel opment Co. LLC , which is registered to one of his closest confidants, has development rights for both the Monroe Block and the Hudson’s site with the Downtown Development Au thority, which owns both properties, according to Brian Holdwick, executive vice president of business development for the Detroit Economic Growth Corp., which staffs the DDA. Holdwick said Rosko has not yet submitted a development plan for the Monroe Block site. When Meridian approached the DEGC about housing a new 16-story, 320,000-square-foot headquarters
Former Tiger Stadium site LARRY PEPLIN
A redevelopment of Brush Park expected to be approved by the Detroit City Council by the end of the year would include apartments and townhomes, plus retail space. feet. Construction on the project is expected to be complete in 2017.
Brush Park Situated on two parcels totaling 8.4 acres, the planned $70 million Brush Park redevelopment is expected to be approved by City Council by the end of the year. Planned to include more than 330 apartments, townhomes and flats for sale and rent, plus 8,000 to 10,000 square feet of retail space, the Brush Park Development Co. project is expected to be complete in 2017. Brush Park Development includes Dan Gilbert’s Bedrock Real Estate Services LLC ; Marvin Beatty, chief community officer for Greek town Casino-Hotel and an investor in the planned $160 million redevelopment of the former Michigan State Fairgrounds site; Sam Thomas, president of Benton Harbor-based Star Development Co.; Darrell Burks, former senior partner of Pricewater house Coopers LLP and a member of the Detroit Financial Review Commis sion; former Detroit mayoral candidate Freman Hendrix, also president and CEO of Detroit-based
lutions; and Pamela Rodgers, owner and president of Rodgers Chevrolet and a member of the Detroit River Front Conservancy board. The redevelopment also includes renovations to the historic Ransom Gillis mansion at 205 Alfred St. and three others in the area. The Ransom Gillis renovation is being done by HGTV ’s Nicole Curtis, a Detroitarea native.
Herman Kiefer Health Complex
Advanced Security & Investigative So -
A New York City developer is in the process of receiving City Council approval for the transfer of 38 acres and buildings totaling 750,000 square feet to Herman Kiefer Development LLC , which plans to spend more than $70 million over the next eight years redeveloping the former hospital site off Taylor Street west of the Lodge Freeway. Ron Castellano, principal of both Herman Kiefer Development and New York City-based architecture firm Studio Castellano, said none of the buildings on the site will be demolished as part of the project, which would include an unknown number of multifamily units as well
on the site, Rosko’s development rights were suspended until the new development plans collapsed last year, according to Holdwick. Then the rights reverted back to Rosko, which has to submit a development plan next year. Carolyn Artman, senior public relations manager for Rock Ventures, said that while there is “nothing to report on the Monroe block at this time … there are several interesting ideas surfacing.” While specific plans for the Hudson’s site have not yet been announced, New York City-based Shop Architects PC and Detroit-based Hamilton Anderson Associates are the architecture firms working on the 2acre site’s design. Last spring after the release of a conceptual rendering of the site, Gilbert said in a statement that although the plans are evolving, it is expected to become the site of “an
iconic building that will have some ties to Detroit’s past, but more importantly, represent Detroit’s rebirth into a creative and high-tech future.” That’s evident in the rendering, released in March, which shows a modern swooped building, unlike anything nearby, on the east side of Woodward looking north. Constructed as an eight-story building in 1891, the Hudson’s building was a shopping destination for millions for nearly a century. It expanded to 25 stories and 2.2 million square feet before closing in 1983. It was imploded in 1998. Also included in the incentive package luring Quicken downtown were nearly $50 million in Michigan Economic Growth Authority tax credits and a $2 million annual parking subsidy from the city for 20 years. Crain’s reported at the time that Quicken was to lease space through 2015, but in 2013 begin construc-
A $44 million mixed-use development is planned for the site informally known as “The Corner” at Michigan Avenue and Trumbull Street. It is expected to include at least 126 new housing units and 30,000 square feet of retail space, plus a new headquarters building for the Detroit Police Athletic League. The baseball diamond will be maintained. Eric Larson, founder and president of Bloomfield Hills-based Lar son Realty Group LLC , the developer behind the project, said construction is expected to begin next year. “The process of finalizing the development agreement and coordination with the city has taken a little longer than everyone anticipated, but now it’s moving forward,” said Larson, who is also CEO of the Downtown Detroit Partnership.
South District Recreation Department building The city is finalizing terms of a deal to redevelop the former South District Recreation Department Build ing into a future “deconstruction
hub,” where materials from demolished homes are offered for sale or reuse, Roach said. The building is 38,000 square feet on Piquette Avenue between John R and Brush streets in Midtown. The chosen developer has not yet been disclosed. 䡲
tion on a new headquarters building in the immediate area surrounding the Compuware building. The third site to which Gilbert received development rights is now the Z Lot development, which has 33,000 square feet of retail space and a 1,300-space parking garage on Broadway Street between Gratiot and Grand River avenues. The Michigan Department of Li censing and Regulatory Affairs lists Howard Luckoff, a partner and real estate attorney in the Bloomfield Hills office of Honigman Miller Schwartz and Cohn LLP, as Rosko Development’s registered agent. He is one of Gilbert’s closest friends dating back to childhood in Southfield. Bedrock owns more than 80 properties throughout greater downtown, according to Quicken. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB