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DETROITER March 2017 COVER STORIES
8D an Gilbert Taking Detroit Development to Overdrive Real estate mogul shares insight on tech,
talent and doubling down on Detroit's revitalization
10 The Ilitch Touch: Transforming Detroit's Downtown
Christopher Ilitch reflects on family's development legacy and future plans for The District Detroit
12 Hot Market: Michigan's Booming Development
Sales of commercial and industrial properties are thriving but worries remain about supply and pace of new construction
14 Ford Fueling Innovation with Dearborn Campus Redevelopment
Automaker's billion-dollar headquarters makeover part of long history as community steward
16 Tech-Centric Downtown Development
Urban centers across Southeast Michigan breathe new life thanks to tech startups
18 Detroit: A City on the Rise
Developers seize opportunity to bridge gap between walkability, retail and housing throughout the city
22 Michigan Colleges: Unsung Drivers of Development
Region's higher education institutions focus on smart growth to positively impact communities
26 Healing the Patient Helping the Community
Southeast Michigan hospitals broaden mission by focusing on greater community development footprint
30 Help Wanted: Closing Michigan's Skilled Trades Gap Talent demand intensifies to meet growing needs of construction industry
32 Breathing New Life Into Brownfields
State legislation offers much-needed boost to redevelopment across Michigan
34 Detroit-Area Developers Choose to Reuse
Northland Center among trend of adaptive reuse projects across region
36 Under Construction: Michigan's Build-toSuit Market
As the industrial real estate market nears peak occupancy, manufacturers consider building to fit needs
Volume 108, Number 1 Publisher Tammy Carnrike, CCE Managing Editor Megan Spanitz Editor Daniel Lai Associate Editor Tiffany M. Jones Copy Editor Audrey LaForest Photographers Melissa Knapp Katie Krizanich Courtesy photos Cover Design Melissa Knapp Advertising Director Jim Connarn Advertising Representatives Laurie Scotese Brian Starrs Custom Publishing and Design Michelle Percival Back Issues 313.596.0391
Published by Detroit Regional Chamber Services Inc. No part of this magazine may be reproduced without written permission.
Detroiter (ISSN 0011-9709) is published four times a year (Jan, June, Sept and Dec) by the Detroit Regional Chamber, One Woodward Avenue, Suite 1900 PO Box 33840, Detroit MI 48232-0840, Phone: (313)964-4000. Periodical postage paid at Detroit MI Subscription price: members, $14: nonmembers, $18. Individual copies: $4; plus postage. POSTMASTER Send address changes to: Detroiter, One Woodward Avenue, Suite 1900, P.O. Box 33840, Detroit MI 48232-0840. Copyright 2007, Detroit Regional Chamber Services Inc.
DETROITER March 2017
Mike Ilitch, owner of the Detroit Red Wings, celebrates the team's 1997 championship.
Legend: Made in Detroit Mike Ilitch embodied true spirit of the American dream and love for community By Sandy K. Baruah
never had the pleasure of meeting Mike Ilitch, but it was clear to me from my first day in Detroit in 2010 the outsized impact this man had on the city. In fact, I think it is fair to argue that if not for Mike Ilitch, his family and his companies, Detroit would not be on this impressive road to recover y. While there are many heroes that have been instrumental in the fundamental transformation this city has seen in recent years, it was Mike Ilitch who made a big bet – several big bets actually – in Detroit long before it was fashionable to do so. From moving the Little Caesars world headquarters to downtown Detroit, restoring the historic Fox Theatre, the building of the Tigers’ new home at Comerica Park, and more, it was his faith in this great American city that was central in positioning Detroit for the success we see today. Mike Ilitch invested in, nurtured and loved some of the most beloved and iconic symbols of our region. The Fox Theatre, the Detroit Tigers and the Detroit Red Wings brought us all together. From Marysville to Monroe from Hamtramck to Howell, Mike Ilitch made us all Detroiters. Mr. I loved Detroit and its people. Yes, he was a tremendously successful man who counted among his friends business titans, athletic celebrities and even American presidents, but his real passion was with the people of Detroit. The sports fans that
cheered on his teams, the concert-goers at his venues, and the countless families who enjoy Little Caesars pizzas. He loved them because he was one of them. Both he and his powerhouse wife, Marian, both the offspring of hard-working immigrants, came into this world with little, but achieved the American dream beyond expectation. Despite his tremendous success, Mr. I never lost touch with the real soul of Detroit – the families that live here. The legacy of Mike Ilitch lives on. The new beyond-world-class Little Caesars Arena and The District Detroit project currently underway will fundamentally transform the face of Detroit. It will unite the transformative efforts in downtown and Midtown into one seamless urban center that will make everyone in our region proud. His family of companies will continue to invest in Michigan’s signature city, build community assets, and support worthy philanthropic causes. I was delighted that my former boss, President George W. Bush, was able to pay tribute to Mike Ilitch at his celebration of life ceremony. While President Bush enjoyed talking baseball with Mr. I, what really moved the former president about Mike Ilitch was his commitment to community, family and country. President Bush knows what we all understand – that Mike Ilitch embodied the American dream and that all of us were the beneficiary of that dream.
Sandy K. Baruah President and CEO
DETROITER March September 2017 2014
Building to CAPACITY A tightening industrial and commercial real estate development market shows no signs of slowing, buoyed by new investment across Southeast Michigan
n the fi ve years following the Great Recession, Southeast Michiganâ€™s commercial and industrial real estate market has slowly and steadily risen. This silent success story is led by the stateâ€™s automotive and manufacturing industry comeback, as well as milestone
projects such as The District Detroit and an emerging technology startup ecosystem. From creative adaptive reuse breathing new life into downtowns, to community and government partnerships restoring long abandoned structures into vibrant community anchors, the
region has plenty to celebrate. As the region braces for a boom in new projects however, developers and realtors alike are sounding the alarm that the market is nearing capacity. Where it goes from here is anyoneâ€™s guess. One thing is for sure: Demand is not slowing.
DETROITER March 2017
Developers and businesses want to be a part of what is becoming America’s greatest comeback story. It would be hard to find another example of a major American city rebuilding the way Detroit is – with entrepreneurs, big businesses, small businesses, and the public sector all working together. — Christopher Ilitch, President and CEO, Ilitch Holdings Inc.
DETROITER March 2017
Taking Detroit Development Real estate mogul shares insight on tech, talent and doubling down on Detroit’s revitalization By Tom Walsh
TO OVERDRIVE has a real chance to be THE city where it’s all centered. It’s right there for us,” Gilbert said. Gilbert recently sat down with the Detroiter to discuss his impact on Detroit’s revitalization and plans for the future. You have talked about the need to “go vertical” as the next stage of Detroit’s growth in the city core. Why? Where? How soon? And how high? If we don’t grow vertically, we can’t grow any more because we’re full (downtown). There are companies that want big chunks of space, 50,000 square feet, and we have nowhere to put them. So we have to build, and that’s the focus of the next few years for sure.
Dan Gilbert, founder and chairman of Quicken Loans, moved the company's headquarters to Detroit in 2010 and has since acquired more than 95 properties. The company has grown to 17,000 employees.
f it feels like Dan Gilbert has taken Detroit’s development surge and thrust it into hyperdrive, get ready to buckle up and brace for more.
Borrowing a Winston Churchill quote, after a pivotal World War II battle turned the tide for Britain, Gilbert said, “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Translation: Detroit’s revival, with QLine streetcars to debut this spring and plans underway for a dazzling 52-story skyscraper on the old Hudson’s site – on the heels of news that a Shinola Hotel is coming, Microsoft moving downtown and a major neighborhood development in Brush Park breaking ground – is still at an early stage. “We’ve got a lot more to go. I don’t think you’re ever really done as a city. You’re either growing or dying, nothing in between,”
said Gilbert, Quicken Loans founder and chairman, whose family of companies has acquired more than 95 properties and grown to 17,000 employees in the city since Gilbert moved Quicken headquarters with 1,500 employees downtown in 2010. Gilbert’s Quicken and Rock Ventures teams have led development of the QLine project and Detroit’s blight removal task force, are investing $20 million in community projects this year, and and are planning to renovate the David Stott building, Book Tower and the old Detroit Free Press building downtown.
Hudson’s will be the tallest building in Detroit, 52 stories, 734 feet high. The tower will be residential. There will be retail on the street and the first floor will be like a showcase — there will be a gap on Woodward, so cars can come in and drive out to do a reveal or something. We plan to showcase the best in technology in a civic space. We’ll also be building on the Monroe blocks and Brush Park. The QLine streetcar is getting ready to roll. What do you expect the impact to be? I think it’s going to have more of an effect than anybody believes. The fact that most of QLine is curbside – which I really fought for, bigtime – will make it easy, logical to use.
But Gilbert is also reaching out to CEOs from Silicon Valley, Wall Street and elsewhere to peddle a much bigger vision for his hometown.
I don’t know if there’s a street in the world like Woodward Avenue, from Grand Boulevard to the river. It has a beautiful river and a riverwalk and then you come up through parks and retail developments, new construction, and this huge entertainment district that’s got four stadiums … and then you have all the museums. It’s got everything.
“Detroit is going to be the center of the world in the next 10 or 15 years, with technology changing the whole world economy. Detroit
I think the QLine already has an effect on the real estate market. There are numerous real estate developers who have jockeyed
DETROITER March 2017
What is the solution to the oft-cited “two cities” dilemma of a thriving Detroit downtown surrounded by struggling neighborhoods? How will people across the city benefit from Detroit’s resurgence? When we moved downtown, we had 75 people that lived in the city of Detroit. Now we have 3,500 and we would have 2,000 more if there was product for them to move into. They live in nearly every neighborhood in the city. You absolutely have to have commercial neighborhood services and jobs. But most of the jobs are going to be in downtown and Midtown for the people in the neighborhoods. That’s just a fact. And the best thing you can do for the neighborhoods is to have jobs, period. We opened up a company named Rock Connections, a call center, just a few years ago.
Detroit's new QLine streetcar takes its maiden test run on Woodward Avenue.
and bought along the route. One of the most impressive things about the Ilitches’ development of The District Detroit is, look at where they put that stadium: right up to Woodward. I was so excited when I saw that. I don’t think that happens without the QLine. Tell us about your fellow NBA team owner Tom Gores and his decision to move the Detroit Pistons downtown. He is partnering with you on a bid for a pro soccer team, which you would like to build on the unfinished jail site downtown. What will his impact be? Once the Sacramento Kings opened their new arena downtown last year, the Pistons had the only one of 29 NBA arenas not located in the city – not only not in the city, but 35 miles away. When LeBron James went to Miami for four years and our (Cleveland Cavaliers) team wasn’t doing well, we were at about the same record as the Pistons. I don’t think we’re any better marketers than them; I don’t think there’s any greater appetite for basketball in Cleveland than in Detroit – but we were getting 18,000 fans and Pistons were announcing 9,000 but getting 5,000 in the seats. Why is that? We have the same kind of team, both rebuilding. But you know you’re going to go downtown, have dinner, go to a casino and walk around (in Cleveland).
In Detroit, am I going to drive 35 miles, park 300 yards away on asphalt and freeze my tail off to watch a team that’s not competitive, and then walk out and have nowhere to go to dinner? In the city, you have more chance of drawing fans when the team is not so great, right? I also think that (Tom Gores) genuinely wants to participate in Detroit’s turnaround. The big private investors in Detroit’s resurgence have been native Detroiters who built successful businesses: the Ilitch family, yourself, Peter Karmanos. What about big money from other states and countries? Are we on the cusp of a major investment influx from outsiders? I think if you go to Midtown, a significant portion of the developers are out-of-state people. Now, the big investors, there’s no doubt in my mind they want to do something. But they don’t want to do little deals, they want do something big. Next year, the Urban Land Institute (ULI) is bringing its national 2018 Spring Meeting, about 4,000 people from all over the world, top real estate developers and experts to Detroit. It’s going to be huge. The REITs (real estate investment trusts) are very interested in Detroit. That’s why this ULI convention is a big one, because almost every big real estate developer or owner participates in it.
Of the 850 people there, most are Detroit residents. Our CEO, Victor You, wants to hire 2,000 more. We have nowhere to put them; we have no space. In my opinion you need these sort of entry point-type jobs. They get $12 to $15 an hour, plus incentives based on sales sometimes, but full benefits, and the the good ones move onto other businesses. I’m so high on the call center. I’m trying to get everybody that outsources that service – whether it’s to India or the Dakotas or Nebraska – let’s get your call centers in Detroit. Where does the rapid evolution of selfdriving cars and other technologies fit into the Detroit development story? I have to tell you, this is not something I could have predicted, that car technology – what they’re calling autonomous vehicles – was going to take off so fast. I went to CES (Consumer Electronics Show) in Las Vegas the last two years and it’s like THE car technology show. It’s all they talk about. The technology guys want (mobility and self-driving cars) here and the car companies want it here. There’s a case to turn one urban core into the premier place. In Michigan, the governor and legislature already passed the best law in the country for sure, allowing autonomous vehicle testing. And now, the next phase in my view, is turning Detroit into the city where you go to see how this works. You get ahead of the curve. Tom Walsh is a former columnist for the Detroit Free Press.
DETROITER March 2017
THE ILITCH TOUCH: Transforming Detroit’s Downtown Christopher Ilitch reflects on family’s development legacy and future plans for The District Detroit By Tom Walsh
hristopher Ilitch, in a Bloomberg Television interview a month before his father died, succinctly captured his family’s role in Detroit’s riches-to-rags-to-revival story.
Detroit “ran into several decades of hard times,” Ilitch said, “and we felt an obligation to do everything we could to bring our city back.” In the late 1980s, Mike and Marian Ilitch, who co-founded the Little Caesars pizza chain, bought and renovated the Fox Theatre in Detroit and moved the pizza company headquarters downtown from the suburbs – at a time other businesses were fleeing the city. When the Tigers played the 2006 World Series in the ballpark he built across the street from the Fox, Mike Ilitch told a reporter, more in candor than in jest, “We were probably about 15 years too early” as pioneers investing in Detroit’s rebirth. Eventually others followed: Peter Karmanos brought Compuware downtown, and in 2010 Dan Gilbert and Quicken Loans jumped in with a bang, buying and renovating buildings and filling them with thousands of employees. Christopher Ilitch, president and CEO of Ilitch Holdings Inc., has doubled down on his family’s commitment, leading a massive investment in the Little Caesars Arena and The District Detroit –while partnering with Detroit Pistons owner Tom Gores to bring NBA basketball back to the city. It’s a fitting legacy for his late father, who he extolled as “a kind-hearted family man, big-idea businessman, handson leader and devoted philanthropist who created opportunity and pride for everyone around him.” Ilitch recently discussed The District Detroit's progress and the impact on jobs and the city’s neighborhoods during an interview with the Detroiter.
When your mom and dad brought Little Caesars’ headquarters downtown and took on the Fox Theatre renovation, was there a long-term vision that looked anything like The District Detroit? My parents always loved Detroit – it’s their hometown – and they wanted Detroit to be a vibrant city. They were very excited to take on the Fox Theatre restoration and to move the Little Caesars headquarters downtown. They took so many steps to help re-energize the city: encouraging and supporting the Lions’ move back to Detroit, building Comerica Park and supporting dozens of local charities. The District Detroit, with its amazing collection of sports and entertainment assets, and also residential, retail and office spaces, is a natural extension of their lifelong commitment to Detroit. Some of those early decisions were certainly led by the heart, but the outcome of their early investments, and those of many others is that today Detroit is a great place to do business with a strong outlook for the future.
Christopher Ilitch, president and CEO of Ilitch Holdings Inc., speaks at the groundbreaking of Wayne State University's new Mike Ilitch School of Business.
What is the impact of The District Detroit on investment and jobs? We’ve already announced investment plans of more than $1.2 billion. We’re working really hard to develop the finest work, live and play district in the country, if not the world. Our investment also includes $175 million for two recently announced projects: the Little Caesars world headquarters campus expansion for our growing pizza business and the new mixed-used building that includes parking, which is currently under construction on Henry Street at Park Avenue. These projects are expected to generate more than 12,500 construction-related jobs, more than 1,100 permanent jobs and more than $2.1 billion in economic impact for our community.
DETROITER March 2017
Talk about Tom Gores and his decision to bring the Pistons back to the city core and to pursue a pro soccer franchise. What’s the impact of that move for the region? Tom Gores’ decision to bring the Pistons to Detroit was a watershed moment for the city. It will contribute tremendously to the positive momentum already underway here and make our city stronger. Detroit is fortunate to have a home-grown entrepreneur like Tom investing so heavily in the city. He is a great businessman who is also committed to doing things the right way. We both share a commitment to making a positive difference in our community, and that’s really what brought our organizations together. The opening of Little Caesars Arena is less than 200 days away. How will the arena be different than comparable arenas – not only in design and features, but how it interfaces with the surrounding community? There are a number of innovations that will make an exhilarating experience for fans who attend concerts, sporting events and shows at Little Caesars Arena. We’ve got an incredible outdoor space called the Piazza, a one-of-a-kind indoor experience that’s almost like a downtown street in the Via, and gondola seating that is suspended over the event level for some of the most remarkable views in the world. Other innovations include the Player’s Club tunnel, where fans can see the team enter and leave the ice, and a unique jewel skin around the bowl where we can project video.
At the same time, we put extensive effort into making sure we’re good neighbors to the community surrounding the arena. That includes a number of elements such as building the arena nearly 40 feet below grade so that it blends in with the existing structures. The external facade looks more like a series of cool buildings than one long wall. We’re also working on a public art program with the College for Creative Studies, landscaping and programming for other public spaces, and more. How are you addressing the workforce challenges and opportunities triggered by Detroit’s resurgence and the host of new construction projects? The construction boom throughout the city represents an incredible opportunity for careers in the skilled trades. More than $345 million in contracts awarded for Little Caesars Arena alone have gone to Detroitbased or headquartered companies, totaling more than 60 percent of contracts awarded. And we’ve held dozens of outreach events to attract employees and contractors to our projects, resulting in hundreds of thousands of hours worked by Detroiters. At the Little Caesars Arena construction site there are more than 1,100 people working every day, and the site has had more than 150 skilled trades apprentices. Detroit has added about 16,000 new workers downtown since 2013. How many more do we need living and working in the city core to attract the basic amenities that other thriving cities have?
An artist's rendering of the Henry Street development, part of The District Detroit. Henry Street at Park Avenue is part of the $175 million project to expand the Little Caesars headquarters campus and mixed-use building.
That is a great question. We anticipate the number of people who want to live, work and play in Detroit will only increase. To that end, our plans include the type of “consumer retail” that you are talking about. We are actively discussing where we might want to help develop grocery stores, dry cleaners, gas stations and the like in The District Detroit in the coming years. How will the Mike Ilitch School of Business at Wayne State support growth and jobs in the city? The Mike Ilitch School of Business will have a lasting impact on Wayne State University, its faculty, staff and students, and this entire community. Wayne State is already one of our city’s largest and most stable employers, and its campus injects youth, energy and culture into our downtown. And now, even more than in the past, we’re seeing these bright minds want to stay right here in Detroit, joining our workforce and becoming leaders in the making, thanks to the city’s amazing momentum. It has always been my parents’ dream to see the vibrant Detroit of their youth return for future generations — the new business school will be an important part of that. Tom Walsh is a former columnist for the Detroit Free Press.
Editor’s note: This Q&A has been edited for length.
DETROITER March September 2017 2014
Michigan's Booming Development Sales of commercial and industrial properties are thriving, but worries remain about supply and pace of new construction By Dawson Bell three months, his firm has worked with firms from Germany, Canada and Israel looking for Detroit-area properties. “Without question, smart investors are coming here now," Bernard said. Another sign of recovery can be seen in terms of real estate deals today compared to six to eight years ago, said Douglas Fura, senior vice president of the Farbman Group in Southfield, one of the region's largest developers of industrial property. During the recession, property owners sometimes had to settle for month-to-month or yearly leases, Fura said. Today, many seek, and find, tenants willing to commit for up to 10 years. Lease rates have also recovered substantially, up as much as 300 percent over the depths of the recession, he said.
Dembs Development recently designed the new American Expedition Vehicles office in Wixom.
hile undeniably real, Southeast Michigan's recovery from the Great Recession has been at times painstakingly slow and uneven. But in at least one sector — industrial and commercial real estate development — experts and analysts say that as 2017 gets underway, the evidence points in one consistent direction: upward. Measured by vacancy rates alone, industrial properties in many parts of the region are at near-full capacity. According to a report by the Southfieldbased commercial real estate firm Signature Associates, industrial property vacancy rates in the Detroit metro region were barely above 6 percent in the fourth quarter of 2016. Some areas (e.g., Lake Orion, Walled Lake and Van Buren Township) were below 2 percent.
Commercial property vacancies remain generally higher, between 12 to 20 percent in many areas, but after several years of sustained growth, the commercial market has tightened considerably as lease rates and new construction have rebounded, analysts said. Dennis Bernard, president of Southfieldbased Bernard Financial Group, which handles $1 billion worth of commercial mortgages a year, said real estate demand is at levels he has not seen in 30 years. In certain markets, growth is constrained only by a lack of suitable properties for sale, he explained. “It was painful for a very long time," Bernard said, citing Michigan's early slide into recession and the near-death experience of the domestic auto industry in 2008-09. Beginning in about 2002, national and international firms had virtually given up on Detroit, Bernard said. But that era is definitively over, he said. In just the last
Several Detroit-area experts noted that much of the recent growth in commercial and industrial real estate came from the redevelopment of existing facilities, and that suitable properties are becoming increasingly scarce. Rachel Loughrin, assistant vice president of Bingham Farms-based Core Partners, cited the Centerpoint Campus on the east side of Pontiac, a 1-million-square-foot former General Motors engineering facility that was redeveloped as an office and R&D center. Doing so to fit contemporary needs required the removal of the main building's second floor. Unfortunately, Loughrin said, many older, vacant office and industrial properties are functionally obsolete for prospective 21st century tenants, either because they have insufficient ceiling heights — often under 20 feet where 25 to 30 feet is required — or because mid-20th century construction often relied on interior pillars that interfere with modern floor plans. This raises the thorny issue of how developers deal with what some experts say is imperative for
DETROITER March 2017
What's Up with
To better understand the state of the commercial and industrial real estate market across Southeast Michigan, Douglas Fura, senior vice president of Farbman Group, and Mark Woods, chief operating officer of Signature Associates, shared their insight with the Detroiter. : Is the industrial market in metro Q Detroit effectively near zero due in part to functionally obsolete buildings? A : Functional obsolescence is a real factor for many buildings 50 to 80 years old. Building size and design limit the potential for conversion. Smaller lots and inadequate parking also contribute. Even demolition sometimes cannot address environmental and muddled ownership concerns, according to Fura. Redevelopment opportunities remain available, however. Woods said developers still can locate urban properties in Detroit and elsewhere in the region — sometimes combining several smaller parcels into a bloc — that, because of their location, provide savings on transportation and utility costs. : Is the commercial real estate Q market recovery in metro Detroit lagging behind the country? : There is no question that vacancy A rates remain higher for retail and office space in the region than those for industrial properties. Several factors contribute to the phenomenon, industry analysts said. Chief among them are shifts in consumer buying habits to online retailers. The overall commercial market in metro Detroit is markedly stronger than it was for the last decade. he metro Detroit office market ended T the fourth quarter of 2016 with a vacancy rate of 12.2 percent and there is currently more than 1 million square feet of office space under construction, according to Plante Moran CRESA. Nationally, the office market rests at 9.7 percent.
Southeast Michigan’s market to flourish long-term: more new construction. FINANCIAL INCENTIVES TO THE RESCUE While there have been some encouraging signs — Amazon's 1-million-square-foot fulfillment center in Livonia, announced in December 2016, is one example industry experts cite — the consensus is that speculative development of commercial and industrial real estate needs to accelerate. Mark Woods, chief operating officer of Signature Associates, said cost and constraints on financing has led to “a very, very constrained supply of new construction." Woods said he expects those constraints to ease slightly in 2017, but perhaps not enough to relieve the crunch. Core Partners’ Loughrin said she believes the Southeast Michigan market would benefit from a re-expansion of financial incentive programs from state and local government, many of which were curtailed in the wake of the recession. Some government officials apparently agree. The Michigan Economic Development Corp. (MEDC) took steps in recent months to incorporate incentives for speculative commercial and industrial development into its existing financial programs. The Speculative Building Development Program allows developers
Core Partners' 600 and 700 Main Street project in Royal Oak is a premier mixed-use development project that is comprised of office and retail spaces.
to qualify certain projects for tax abatements, brownfield credits and state loan participation that had previously been reserved only for those with an identified tenant prior to construction. Others are optimistic that conditions are ripe — following the election of President Trump — for relief from some of the more onerous financial regulations enacted after the 2008-09 financial crisis. Bernard said lenders and borrowers, especially newer and smaller firms, have been squeezed by loan reserve requirements included in the Dodd-Frank Wall Street Reform legislation. “But Trump gets this," Bernard said. “He was a developer. This is one thing he really does get." Overall, the pervasive attitude appears to be one of almost bullish optimism for commercial and industrial real estate development in Southeast Michigan. “We went through some pretty tough times," said Ryan Dembs, president and CEO of Farmington Hills-based Dembs Development. “Everybody got a taste of what not having any growth is like. They Dawson Bell is a don't want to go back." metro Detroit freelance writer.
DETROITER March 2017
Michigan's Booming Development Ford Fueling
INNOVATION with Dearborn Campus Redevelopment
Automaker’s billion-dollar headquarters makeover part of long history as community steward By James Amend
he evolution of personal transportation from a traditional ownership model to one where people may no longer purchase a vehicle, or even drive one again, is fueling revolutionary change in the automotive industry. Automakers such as Ford Motor Co., General Motors Co. and FCA US LLC want to diversify beyond designing and producing vehicles to becoming end-to-end personal mobility service providers, supplying products to old-fashioned dealerships while at the same time satisfying a rapidly growing demand for car-sharing, ridehailing, autonomous vehicles, and electric bikes and scooters. Companies are making gutsy bets to be leaders in the mobility space by investing billions of dollars in research and engineering as well as the facilities where that work is done to fuel innovation and attract the best and brightest minds. Nowhere is that goal more clear than in Dearborn, where Ford is planning a 10year, $1.2 billion makeover of its 60-yearold headquarters into a modern, green and high-tech facility where tomorrow’s transportation is imagined. “We want to get this thing perfect,” said Dave Dubensky, chairman and CEO of
Ford Land. “This is about consolidating for productivity, co-location for efficiency, creating a wired environment and getting people out of walled offices,” he added. Dubensky envisions a walkable campus with paths, trails, green spaces, covered walkways and wireless connectivity 10 times faster than Ford's 30,000 employees enjoy today. Autonomous vehicles, on-demand shuttles and eBikes will whisk employees from building to building, he said.
The new Sustainability Showcase Building aims to meet Living Building Challenge standards, the highest level of sustainability possible today. The net zero -waste, net zero energy, net zero -water facility will include geothermal heating and cooling and generate renewable energy from the sun.
to accomplish the things we want as a mobility company and an automaker.”
Put simply, Ford is bringing its facilities up to speed with its business and competing for talent with Silicon Valley, which has its eye on making cars, too.
Included in the campus renovation project is a $60 million development of new office and retail space in west Dearborn called Wagner Place. The project will transform two blocks of vacant buildings into a unique urban development with first-floor retail and top-level offices for 300 Ford employees by mid-2018, the automaker said. A 120-year-old hotel called The Wagner Building — left vacant for nearly a decade — will retain its historic facade and also be renovated into office and retail space as part of the project. Ford’s Garage, a restaurant recalling a 1920s service station with vintage Ford cars and memorabilia, will sit a block away. It opens in the spring.
“I drive to a different building three or four times a day,” Dubensky said. “And they are old, and they are tired. It is time to do this, and we need to do this, honestly,
“We’re really excited,” said Rob Cory, director of global real estate services at Ford Land. “We will design Wagner Place to look like a modern downtown.”
Seventy buildings on the campus will be consolidated into two: a product campus and a world headquarters. More than 7.5 million square feet of workspace will be renovated and upgraded with the latest technology and connectivity. A second campus location will house Ford Credit and offer on-site employee services, improved connectivity and access to green space.
DETROITER March 2017
The current Ford Research and Engineering Center campus is being transformed into a contemporary, innovative work environment to accommodate 24,000 employees in 4.5 million square feet of upgraded workspace. The Wagner Building will transform two blocks of largely vacant buildings into a unique urban development with first-floor retail and top-level offices for 300 Ford employees by mid-2018.
Ford's Top Real Estate Exec
SETS SIGHTS TO FUTURE As a globetrotting executive at Ford Motor Co., Dave Dubensky has had the opportunity to positively affect the lives of the automaker’s customers and employees around the world. Now the Southeast Michigan native has the chance to make a historic impact in his own backyard. Dubensky, chairman and CEO of Ford Land, is leading the development of Ford’s headquarters in Dearborn into a hotbed of new-mobility innovation. “This is a once-in-a-lifetime opportunity, and it should serve Ford for a long time,” Dubensky said. Prior to taking over on Jan.1, Dubensky served as president and managing director for Ford Motor Private Ltd., where he led the automaker’s global business services operations headquartered in Chennai, India. His tenure included the acquisition and development of land for a 28-acre headquarters for Ford Asia Pacific, while also championing a number of social and civic programs and leading employee engagement and diversity initiatives. “That was fun, going through the whole
process of what the campus should look like and working with the local government,” he said. In his 25 years with Ford, Dubensky has also worked stateside and served roles in Mexico and Japan, including a stint as director of corporate strategy at Mazda in Hiroshima during the automaker’s ownership of the brand. But he admits the stakes are especially high in Dearborn. Fueled by rapid urbanization, wireless connectivity and growing consumer demand to rent or share transportation instead of owning a car, mobility as a service is a rising market segment, where automakers such as Ford must occupy the ground floor or risk getting buried by the competition. Dubensky shares the vision of Ford President and CEO Mark Fields, wherein employees will work more collaboratively and decisions will be made more quickly. Fortunately, he also brings a degree of levity to the job. “It’s a huge responsibility,” Dubensky said. “If something isn’t right, you can’t tear it down and start over.”
The roof of the old Wagner Building will be an open space with connectivity, and Cory said sounds from Michigan Avenue below will waft up to employees and visitors. “It will be an urban experience,” Cory said, adding that millennials in particular will dig the vibe. It is music to the ears of Dearborn Mayor John B. O’Reilly Jr., who admitted his city could use an injection of young professionals and the investment illustrates strengthened relations with the automaker. “It’s a remarkable event for the future of Dearborn,” he said, comparing the project to company founder Henry Ford forever altering manufacturing with an integrated manufacturing model at the Rouge plant in Dearborn. “People came from all over the world to see what Henry Ford was doing. It’s consistent with the transformation and creativity he applied to car-making.” The investment comes after consecutive mayoral administrations worked to repair relations with the automaker after a decades-earlier wrangling over industrial tax assessments Ford considered unfair. A lawsuit by Ford and a subsequent rewrite of Michigan tax laws lifted the burden. “And the city has thrived in this environment, too,” O’Reilly said. “There is a sense of partnership now and our goals are aligned.” James Amend is a senior editor at WardsAuto in Southfield.
DETROITER March 2017
or most of the last half century, restoring economic stability in aging city centers has often eluded urban planners, elected officials and community leaders in Michigan and across the country. Today, however, there is reason to believe a working formula may be finally emerging.
Urban centers across Southeast Michigan breathe new life thanks to tech startups By Dawson Bell
Urban centers across Southeast Michigan are experiencing a pronounced surge in redevelopment led by tech and IT firms. These companies are rehabbing aging and often vacant structures, repopulating city streets and creating jobs by the bundle. This trend is most obvious in downtown Detroit, where tech now rivals — and even possibly overlaps with — the automotive sector as the most prominent industry. The tech startup impact can also be felt in places like Pontiac, where decline has been prolonged; and in other areas struggling to reinvent themselves like Ann Arbor, where urban abandonment was less severe. A number of factors have contributed to the urban tech renaissance, but one factor in particular stands out among the rest: the millennial generation. Many energetic and entrepreneurial young people like cities, urban vibrancy and urban architecture. Real estate developers have taken notice and are eager to provide spaces catered to their needs. “It's the kind of growth you can't ignore," said Todd Fenton, economic development manager for the city of Royal Oak. “Tech companies are growing and bringing young families in. You're seeing a real new economy emerging." Here is a look at what is happening in a few Southeast Michigan cities that are participating in this wave of urban tech revival:
ANN ARBOR Ann Arbor’s downtown avoided much of the Great Recession’s economic impact, but some properties became tired and underutilized as the retail and office market lost some of its footing over the last three decades, said Phil Santer, senior vice president of Ann Arbor SPARK, the area's primary economic development agency. That trend has been offset by the emergence of a plethora of tech startups and rapid growth operations, which have been eager to take up the slack and pour substantial resources into reclaiming and restoring outdated facilities.
First Martin Corp. Vice President Darren McKinnon and First Martin Corp. Building Maintenance Supervisor Tom Brennan pose for a photo during construction at the Allmendinger Building in Ann Arbor's historic district. The Allmendinger Building is the new home to Duo Security.
Examples include Duo Security, a company that specializes in two-step verification for online transactions, which took over and renovated three floors of the historic Allmendinger Building in downtown; and Hook Logic, a New York-based e-commerce analytics firm, which renovated and adapted an old brewery near Michigan Stadium. “Ann Arbor is an historic town, and that's attractive to people in the tech industry,"
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Santer said. “They want to reinvest in the heritage ... at the same time they're creating a kind of open-air science park and community." PONTIAC Pontiac has lived through more than its share of false starts since suburbanization hollowed out its downtown, and autorelated recessions decimated employment. Now, developers and entrepreneurs appear to have confidence that the city can be reborn as a technology hub. One of the believers is Compuware founder Peter Karmanos, who, together with partner Mark Hillman, announced late last year that three spinoffs from their MadDog Technology company would locate in the rehabbed Pontiac Riker office building. The MadDog companies are leasing 15,000 square feet in the 10-story, 90-year-old structure. One tenant, Lenderful, an online mortgage company, qualified for an $800,000 grant from the Michigan Economic Development Corp.’s (MEDC) Michigan Business Development Program. In January, the city council approved the sale of its Phoenix Center parking structure and adjacent office buildings to BoonEx, an Australian-based social software company. Other deals to bring tech to Pontiac have been consummated or are in the works, said Eric Banks, executive principal with Core Partners and sales agent for the Riker Building. “People have been trying to bring life back to Pontiac for years," Banks said. “At this point, there does seem to be some real traction." ROYAL OAK Royal Oak has long enjoyed a vibrant downtown restaurant and bar scene that kept the streets busy after business hours, said the city's economic development manager, Todd Fenton. “Between 9 to 5 it was a little slower," he said. That trend underwent significant transformation in recent years, in large part due to the influx of tech and IT operations, many of them attracted to a walkable community, Fenton said. Emblematic of the change is Vectorform, a self-described innovation and invention
company that has worked with clients around the globe, including DTE, Ford Motor Co., Google, Microsoft Corp., and Toyota Motor Corp. Vectorform has enjoyed 20 percent annual growth since its founding by a pair of former Brother Rice High School classmates in the 1990s, and relocated its headquarters to a renovated, second-floor Royal Oak space once occupied by Barnes and Noble in 2014. “We've had companies triple their workforce in two years here," Fenton said. “They want to be here. They come to us." DETROIT Detroit arguably has been ground zero for the tech sector's redevelopment of urban cores. A LinkedIn analysis of millennial jobseeking trends in September 2016 described the city as the third fastest growing market in the country. At the forefront of Detroit’s tech renaissance is the Madison Building, operated by Bedrock Real Estate Services. The 2011-
Collab-hallway at Vectorform's new headquarters located in Royal Oak, the space off Main Street once occupied by Barnes and Noble.
2012 renovation turned the dilapidated, nearly 100-year-old theater building into a multipurpose center that was almost immediately fully occupied by tenants, including Twitter and Microsoft Ventures. Brittney Hoszkiw, who specializes in Detroit projects for MEDC's Michigan Main Street program, said she has nearly a dozen projects on her desk currently, representing only a fraction of overall activity. One such development — the Green Garage on Second Avenue in Midtown, which involved repurposing a historic garage and, later, shoe supply building that was built in 1920 and converted to a tech incubator and coworking space — was completed in 2011 and currently has 50 tenants. “The number of projects happening in Detroit right now is staggering," Hoszkiw said. Dawson Bell is a metro Detroit freelance writer.
DETROITER March September 2017 2015
A City on the Rise
Developers seize opportunity to bridge gap between walkability, retail and housing throughout the city By Audrey LaForest
rivate investment from the state’s development community is helping to rewrite the narrative for what Detroit will look like in the future. Within the next 10 years, local real estate mavens and developers are envisioning a walkable, diverse and connected city, where residents have access to retail, cultural activities and commercial centers all within a short distance from where they live.
DEVELOPERS' PLAYGROUND In 2016, Detroit saw development deals ranging from the Detroit Pistons’ plans to move back downtown from Auburn Hills to Quicken Loans founder and chairman Dan Gilbert’s plans for a 20-story office tower and a 16-story residential tower near Campus Martius that will be known as the Monroe Block.
While major developments have had a place in Detroit since the 1990s (e.g., the city’s three casinos, Ford Field and Comerica Park, and construction of the Compuware building), development today is taking on roles both big and small. “The difference now is that the city really isn’t relying on mega projects, but is relying on dozens and even hundreds of small, more organic projects that really have to do with creating community and creating neighborhoods,” said Peter Cummings, principal at The Platform, a development firm dedicated to rebuilding the city. Cummings and business partner Dietrich Knoer are leading development projects throughout the city such as the mixed-use apartment complex, Third and Grand.
Five teams of developers are vested in the $52 million redevelopment of the Paradise Valley Cultural and Entertainment District formerly known as Harmonie Park.
In March, the company broke ground on the first phase of Baltimore Station, a $7.5 million mixed-use development at the Baltimore Street stop of the QLine streetcar that includes sidewalk retail and restaurant destinations. The second phase of the project includes an additional 150 residential units and 20,000 square feet of retail. The project should be completed by 2019. Additionally, The Platform team has invested in the redevelopment of the Fisher and Albert Kahn buildings, which the group purchased as part of a $12.2 million deal. Plans for the New Center-based historic landmark
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buildings include office, entertainment and retail components for the Fisher Building, and retail, office and residential spaces for the Kahn Building. Each building could see in excess of $50 million in investment for the redevelopment, Cummings said. The Platform is also committed to the city’s neighborhoods, particularly in the Islandview, Livernois and Six Mile Road areas, and Brightmoor, where Cummings purchased five properties for just over $79,000. Rehab of the Brightmoor properties is underway. “For the recovery that’s occurring in the city of Detroit to be sustainable, it needs to be far more inclusive than it has been,” Cummings said. “There are swaths of the population that have not been participating in the recovery, and they need to participate, and a lot of them are found in the neighborhoods.” WELCOME TO PARADISE Near the heart of the city, five teams of developers are heavily vested in the Paradise Valley Cultural and Entertainment District — a $52 million investment within the area formerly known as Harmonie Park.
The projects include Hastings Place, a 60unit loft apartment with retail and office space and a five-floor parking deck, led by Michigan Chronicle publisher Hiram Jackson and Queen Lillian Development; and Harmonie Club Hotel, a 25- to 30room hotel in an East Grand River building currently occupied by the Carr Center, led by Patricia Cole of Cole Financial Services Inc. and developer Roger Basmajian. Other projects for the district are the Paradise Valley Jazz Club and a 16,000 square foot expansion of architecture firm Hamilton Anderson Associates led by the firm’s president and co-owner, Rainy Hamilton; and the addition of residential space above La Casa de la Habana cigar bar led by bar owner Ismail Houmani, who purchased the building on Randolph Street for $1.17 million. Dennis Archer Jr., president of Archer Corporate Services and chair of the Detroit Regional Chamber’s board of directors, purchased property at 1407 and 1427 Randolph Street in partnership with investors at Gotham Capital Partners. The team is planning a $2.75 million mixed-
use redevelopment, which will include a cocktail lounge and office space for up to six tenants. Archer said he anticipates his part of the Paradise Valley redevelopment could be completed as early as the fall. “We want this to be a world-class destination, where there’s art, there’s culture, there’s commerce going on, there’s a creative class there, and there’s world-class hospitality — whether it’s a jazz bar, a lounge, a restaurant or a coffee shop,” Archer said. CONNECTING THE CITY It has been just under two years since architect and urban planner Maurice Cox was appointed director of Detroit’s Planning and Development Department, but he is already unleashing strategies to get the city’s neighborhoods that lie outside of the 7.2 square miles of greater downtown involved. “A lot of Detroit’s historic neighborhoods were structured for walkability … but over the decades, they’ve fallen into disrepair,” Cox said. “One of the initiatives that we’ve focused on is trying to make those commercial corridors walkable again.”
Top left: Brightmoor meeting in the Artists Village where The Platform purchased five properties for $79,000 to begin rehabbing the neighborhood. Bottom left: The Baltimore Street stop of the QLine streetcar. Right: Artist's rendering of the Third and Grand development, a mixed-use apartment complex.
DETROITER March September 2017 2015
The historic Fisher and Albert Kahn Buildings could each see in excess of $50 million in redevelopment including office, entertainment, retail and residential components.
To get these “neighborhood-serving Main Streets” back — you can already see them popping up on streets like Kercheval and Agnes in West Village, for example — Cox envisions integrating other forms of mobility and transit infrastructure such as protected bike lanes, wider sidewalks, tree canopies, improved lighting and, most importantly, small businesses that are able to fill a void in neighborhood services. This year, Cox and his team are deploying a set of six coordinated revitalization strategies, one of which focuses on the Fitzgerald neighborhood tucked within the Livernois-McNichols corridor. Another includes a new streetscape plan for the Livernois Avenue of Fashion. The Fitzgerald development strategy includes rehabbing “dozens and dozens” of homes, Cox said, and turning more than 300 vacant lots into a variety of passive and active green spaces, which will include a neighborhood park at its center and a greenway for bicycles and pedestrians that will connect the University of Detroit Mercy with Marygrove College. On the city’s eastside, Cox, the Detroit Riverfront Conservancy, and the Detroit Economic Growth Corp. recently announced a framework for the east riverfront, which will include an expansion of public space, a call for proposals to renovate vacant buildings, and a riverfront promenade that will complete the connection from the Renaissance Center to the MacArthur Bridge at Belle Isle. “(Developers) talk about the ‘missing middle’ density in Detroit — the townhouses, the row houses, the midrise, the courtyard buildings — all of those types that are bigger than a single family, but smaller than a high rise,” Cox said. “Detroit has enormous potential to increase those options, and I think those are going to be the opportunities for development in neighborhoods in addition to restoring some of the singlefamily housing stock to its original splendor.” Audrey LaForest is a metro Detroit freelance writer.
In Search of
Austin Black II, president and broker at City Living Detroit, a full-service, boutique real estate firm headquartered in Midtown,is feeling the impact of recent development activity.
“Demand is very high. Prices have gone up, but we’re now at a point where there’s not enough inventory to match the demand that’s out there right now,” said Black, who founded the firm in 2010. “For example, single-family homes that are available in the city in the $100,000 to about $700,000 range, there’s only about 73 single-family homes that fit that criteria throughout the entire city.” With certain neighborhoods becoming more in-demand, Black said he sees a major increase in housing prices. Near the end of the recession in 2008-09, Black said, you could get a move-in ready home in Palmer Woods for about $250,000. That same house in today’s market would sell for about $550,000. “I think we’ll continue to see reinvestments spreading, particularly as downtown, Midtown and some of the neighborhoods become more expensive,” Black said. “People are going to be more willing to spread out further into other areas throughout the
city, so what we’ll see is more neighborhoods being redeveloped at a faster rate.” David Alade, co-founder and managing partner at Century Partners, is one such developer breathing life into houses located in the North End and Boston Edison neighborhoods. Alade, who left his job as an investment banker in New York City to move to Detroit, launched the development firm with business partner Andrew Colom in 2015. Century Partners focuses on activating vacant houses in struggling neighborhoods by buying homes for cash and offering the owner a stake in the fund, which is supported through the sale of all of the firm’s properties. “From our perspective, what we’re seeing is really the lack of supply of high-quality, movein ready housing,” Alade said. Alade is hopeful, however, that in the next 10 years the city will see zero abandonment and vacancy. “I expect (Detroit) will be filled with young people, senior citizens, people from a diverse array of backgrounds and professions, really engaging with one another on a personal basis in the neighborhoods — whether it’s in parks or in a coffee shop or at a grocery store,” he said.
DETROITER March September 2017 2014
MICHIGAN COLLEGES: Unsung Drivers of Development
Region’s higher education institutions focus on smart growth to positively impact communities By Rachelle Damico
n the battle for top talent and researchers, Southeast Michigan colleges and universities are playing an important role as drivers of development, maintaining and expanding their facilities to meet society’s changing needs. From artfully designed tech centers to dormitories and mixed outdoor use, this development often extends beyond traditional campus boundaries, positively impacting the surrounding community and the region as a whole. Ron Gantner, partner at Plante Moran CRESA, said colleges are quickly becoming the urban core of a community.
“The universities are now really understanding the importance of their architecture,” Gantner said. “It’s getting people engaged, and people are staying longer on campus, which generates revenue for the schools, developers, and surrounding retail.”
As an example, Gantner said activity around the University of Michigan alone generates about 60 to 70 percent of growth in Ann Arbor.
”The universities are now really understanding the importance of their architecture. It's getting people engaged, and people are staying longer on campus.” — Ron Gantner, Partner, Plante Moran CRESA “You have stability from an economic standpoint because students are going to be there every year,” Gantner said. “From the retail and office standpoint, it’s generating that foot traffic on the street in a dense location, which is something that developers love.”
ATTRACTING THE BEST AND BRIGHTEST Recognizing the need to accommodate a growing demand for engineering and computer science students, Oakland University opened its 127,000-square-foot Engineering Center in 2014. The awardwinning Center features state-of-the-art classrooms and laboratories built by Detroitbased SmithGroupJJR. “Universities are the driving force of attracting people to the state of Michigan,” said Louay Chamra, dean of Oakland University’s School of Engineering and Computer Science. Chamra said the Center has attracted both national and international students, and will help keep STEM (science, technology, engineering and math) students in the state. Since the building broke ground in 2010, enrollment numbers have gone up from 1,500 students in 2010 to 3,200 in 2016. Of those, 98 percent live and work in Michigan.
DETROITER March 2017
Oakland is also in the process of constructing a new student housing complex to help meet increased demand. The $77 million project is expected to be completed by fall 2018. A $44 million expansion to the Oakland Center, the university’s student activities and event center, is expected to break ground this year. Left page: Wayne State University's Mike Ilitch School of Business will be part of The District Detroit and is expected to be completed in 2018. Top left: Walsh College has added treadmill desks to its Troy campus in an effort to promote healthy living. Bottom left: University of Michigan-Flint's Murchie Science Building is currently undergoing a $39 million expansion set to be completed in 2020. Top right: Wayne State's new Integrative Biosciences Center (IBio) on Cass Avenue, is transforming the historic Albert Kahn Building into a research facility. Bottom right: Walsh College's Troy campus recently underwent a $15 million renovation and expansion to attract future students.
“The growth has been tremendous,” Chamra added. “This is how we’re serving the region and providing the right talent by collaborating with the industry and focusing our school toward research and a close relationship with the industry around it.”
“The new administration believes that we are shifting from a commuter school to a residential university,” Chamra said. “Hopefully, this will be the first dorm of many to come.” Lawrence Technological University also expanded its footprint with new student housing. Additionally, the college opened the A. Alfred Taubman Engineering, Architecture and Life Sciences Complex, which houses the Marburger STEM Center, in 2016. The $16.9 million project provides new and expanded facilities for Lawrence Tech’s robotics program, science labs and biomedical engineering labs, as well as space for student collaboration. Kristen DeVries, vice president of university advancement at Lawrence Tech, said the
building was designed to expand programs that attract the broader K-12 population. “Some of the best careers that exist today — and probably will 10, 20 and 30 years into future — are in STEM,” she said. “If students at young ages can understand and grasp the value, it helps keep those students here in Michigan and the Detroit area.” About two years ago, Lawrence Tech expanded its student housing to accommodate 150 more students with its Lloyd E. Reuss Residence Hall, which includes laundry facilities, kitchenettes, a game room and bicycle repair shop. “With technology and social media, students are more connected than they’ve ever been, but they’re not necessarily connected in meaningful relationships,” DeVries said. “By creating a community and having a more robust residential life, we’re helping develop leadership qualities that corporations are saying they need in their scientists and engineers.”
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Stephanie Bergeron, president emerita of Walsh College, said she believes the $15 million renovation and expansion of Walsh’s Troy campus will also attract future students. “The entire investment was measured on student experience,” Bergeron said. “This was all about a learning environment that’s attractive and functional, and actually reflects what the business world will look like.” The business and accountancy college added a 27,000-square-foot, two-story building last year, which includes a business communications-focused Success Center, student lounge and services center. The school also renovated 28,000 square feet of its existing interior spaces. Other notable projects across the region include the University of Michigan-Flint, which is currently expanding its Murchie Science Building, a $39 million project expected to be completed by 2020. And last December, Michigan State University (MSU) broke ground on a 170,000-square-foot Interdisciplinary Science and Technology Building. MSU’s project alone is expected to create 100 new faculty positions. ANCHORING THE COMMUNITY Universities and colleges can also serve as anchors of regional revitalization.
Wayne State University’s new $59 million Mike Ilitch School of Business will be incorporated into The District Detroit. The school is expected to be completed by 2018.
The Walsh College renovation project includes a modernized working space.
Robert Forsythe, dean of the business school, said Wayne State is working collaboratively with area companies to make use of the school’s classrooms, auditorium and boardroom for training sessions and meetings.
Due to its location, Forsythe said the school is proposing a sports entertainment and management concentration with its MBA program beginning next fall.
“I think you’ll start seeing companies actually locating around there because they want to be close to where the talent is,” Forsythe said. “For many students,
they’re going to be within walking distance to an internship.”
“It’s going to be a perfect place to develop students in that particular area,” he said. “I don’t know of any other place in the country where we’re going to have four potential sports teams that close to one another. Rachelle Damico is a metro Detroit freelance writer.
DETROITER March September 2017 2014
Henry Ford Health System's Brigitte Harris Cancer Pavilion will consolidate all ambulatory cancer-related services in one location across West Grand Boulevard.
Healing the Patient
HELPING THE COMMUNITY Southeast Michigan hospitals broaden mission by focusing on greater community development footprint By Paul Vachon
n recent decades, hospitals’ physical structures have undergone an evolution. Once featuring buildings that appeared formal and austere, they were often perceived as insular environments exclusively for treating “sick” people, as terms like “wellness” and “compassionate care” had not yet entered the popular lexicon. Cut off from the greater community, hospitals were often seen as isolated and foreboding.
engaged in transforming their communities. Henry Ford Health System’s (HFHS) main campus in Detroit is a stellar example. Construction recently began on the Brigitte Harris Cancer Pavilion located across West Grand Boulevard. The 187,000-square-foot facility will consolidate all ambulatory cancer-related services in a state-of-the-art location offering urgent care, fitness and nutrition training, as well as traditional cancer therapies.
adjoining the Henry Ford Cancer Institute. Bounded by the John C. Lodge Freeway, I-94, 14th Street and West Grand Boulevard, the project involves recruiting new businesses and residential development in an area known for blight and abandonment. The 2015 opening of Cardinal Health’s medical distribution center on Rosa Parks Boulevard represented a first step in what is expected to be a multiyear effort requiring partnerships with several outside stakeholders.
Thankfully, an evolution in health care has occurred and with it a reassessment in how health care facilities are designed and relate to their surrounding neighborhoods. Today’s hospitals perceive their public mission more holistically: healing the patient and helping the community.
Site plans required the demolition of two church buildings, which were longtime community fixtures. According to Brenda Craig, HFHS director of media relations, the churches’ heritages will be honored by incorporating original stone from the buildings.
One example is the hospital’s recent sale of a parcel along West Grand Boulevard between Second and Third streets. The site will be redeveloped to include an apartment building with street-level retail.
Health systems across Southeast Michigan have embraced this trend, and are positively
The facility represents just a fraction of Henry Ford’s south campus park plan, an ambitious redevelopment of 300 acres
DRAWING IN NEW BUSINESS AND RESIDENTS The Detroit Medical Center (DMC) is nearing completion of a six-story, $155
DETROITER March 2017
Beaumont Health's Farmington Hills location is in the early stages of a $160 million expansion.
million tower for Children’s Hospital of Michigan that will add 248,000 square feet for expanded neonatal and pediatric ICU areas, additional private patient rooms and new surgical facilities. The project represents the capstone of an $850 million expansion and renovation program, begun shortly after the DMC’s 2010 acquisition by Nashville-based Vanguard Health Systems and continued by Tenet Healthcare Corp., its successor entity. Ron Henry, senior vice president and chief facilities management engineering and construction officer for DMC, explained that Children’s Hospital of Michigan's Midtown location and the impact of the DMC’s capital campaign creates a strong economic synergy. “These forces have combined to change the public face of the Detroit Medical Center. We have more and more staff wanting to move to Midtown in part because of the amenities offered here,” Henry said. “We also monitor real estate values in the areas surrounding our campus in the event we decide on future expansion. Those values have gone up considerably in the last five years.” Luanne Thomas Ewald, CEO of Children’s Hospital of Michigan, said the project will create 50 new jobs, but will have a wider impact on attracting new residents to the city.
Being a Good
NEIGHBOR St. John Providence significantly expanded its footprint in Oakland County with the 2008 opening of Providence Park Hospital in Novi. Centered on a 200-acre campus, the site also includes an outpatient center, cancer center, hotel and a senior living community. “The hospital has hundreds of jobs, not only at the hospital itself but also at the other facilities on campus,” said spokesman Brian Taylor. Occasionally a hospital expansion can produce community benefits spontaneously. In Livonia, the 2013 construction of the South Tower at St. Mary Mercy Hospital (part of the St. Joseph Mercy Health System) led to
the development of relationships with various local leaders. “Working together on matters such as zoning enabled us to build trust and really understand our mutual goals. This has led to further relationships in the local community including our support of the Livonia Recreation Center and collaboration with Livonia Public Schools in which we provide programming ranging from heart screenings to sports medicine care. These relationships have come together in a formal citywide wellness initiative that enables us to create innovative programming on an ongoing basis,” said Sarah Gilbert, vice president of operations for the health system.
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“We attract physicians and residents from all over the country, the new tower strengthens that draw,” Ewald said. “By becoming more of a destination for physicians and patients, a ripple effect will be created that will benefit the city economically.” Both HFHS and DMC partner with the Live Midtown program, which offers financial incentives to new or current residents of the greater Midtown area. These include matching forgivable loans to allow homeowners to purchase and improve their property, and for renters to acquire suitable apartments. In Oakland County, Beaumont's Royal Oak campus is beginning work on redeveloping the site of the adjacent Northwood Shopping Center, which it has owned since the 1980s. The ambitious plan will include a specialty grocery store, a 100-room hotel, restaurants and retail stores. Renderings show the project as an extension of the hospital campus and integrated with the community, a feature that was intentionally included. “The redevelopment will enhance the experience for Beaumont Health patients,
visitors, employees and the communityat-large and will bring hundreds of construction jobs and permanent jobs to the area,” said Colette Stimmell, vice president of communications for Beaumont. Beaumont’s Farmington Hills location is in the early stages of a $160 million expansion and renovation, announced shortly after Beaumont Health acquired the former Botsford Hospital in 2014. The landlocked existing facility — with single-family homes nearby — required adding new floors to pick up additional square footage. “We had to go up instead of out,” said spokeswoman Beth Montalvo. Plans include a renovation and five-floor expansion of the hospital’s South Tower that will add 80 new private rooms and convert 79 semi-privates to privates, and create a 29-bay observation unit. The existing East Pavilion will see its Level II Trauma Center in the South Tower enlarged by 60 percent to include a new 20-bed critical care unit and expanded surgical facilities. The project is expected to produce an economic spinoff for the city, contributing
increased tax revenue and jobs for area residents. Construction is underway and is expected to wrap up by late 2018. Portions of the existing building will then undergo renovation, with the project’s total completion expected by the end of 2019. “We have projected an increase of 100 full-time jobs between 2018 and 2022 as the towers are completed, or a 5 percent growth in the workforce during this time period,” said Connie O’Malley, president of Beaumont Farmington Hills. John Fragomeni, vice president of support services at Beaumont Health, explained that fostering mutually beneficial relationships with the community is a major priority. “By adding additional services and expanding our hospitals, we make compassionate medical care more convenient and accessible to our patients and families. Nearby businesses also benefit from the patients, families, doctors and employees traveling in and out of hospitals every day." Paul Vachon is a metro Detroit freelance writer.
DETROITER September March 2017 2014
HELP WANTED: Closing Michigan’s Skilled Trades Gap Talent demand intensifies to meet growing needs of construction industry By Melissa Anders
There are more than 8,300 skilled trades job openings across all industries in Michigan, and more than 6,200 are expected to be available each year through 2022.
OVERCOMING A PERCEPTION PROBLEM The company is working to attract new talent to the construction industry through various efforts. Maibach pointed to two main reasons behind the shortage: Many workers left the industry in the wake of massive declines during the Great Recession; and skilled trades suffer from a negative perception as a “dirty job” and the only way to be successful is to get a four-year degree. It is hard to convince parents who would rather spend thousands of dollars to send their children to four-year schools than support a pathway to the skilled trades, said Parmeshwar Coomar, dean of the Applied Science and Engineering Technology Department at Monroe County Community College (MCCC).
onstruction companies are struggling to find enough qualified skilled trades workers to complete projects in and around the Detroit region — a problem that has rallied businesses, government, educational institutions and labor unions alike. While the issue is not unique to Michigan, it is particularly evident in Detroit, where construction is picking up and massive projects like Little Caesars Arena and the Gordie Howe International Bridge have increased demand. The shortage means that some projects may take longer to complete and could cost more as supply and demand drive up labor costs,
said Todd Sachse, CEO of Detroit-based Sachse Construction. He explained that as older tradesmen retire, there are not enough younger people to take their place. There are more than 8,300 skilled trades job openings across all industries in Michigan, and more than 6,200 are expected to be available each year through 2022, according to Pure Michigan Talent Connect. “It’s definitely a significant challenge, and the reality is that while circumstances like this present challenges in the short term, it definitely creates opportunity in the long term,” said Ryan Maibach, president of Southfield-based Barton Malow Co.
But skilled trades are not menial jobs, he said. They require postsecondary education and pay good, living wages. Pay for skilled trades workers vary by experience and specific trade. For example, salaries range from $35,000 to $75,000 for ironworkers, sheet metal workers and plumbers/pipefitters, according to MichiganConstruction.com. Apprentices earn pay and benefits while obtaining schooling and on-the-job training that can lead to full-time careers and eventually journeyperson status. “You don’t have to be pounding nails for the rest of your life,” Coomar added. Numerous skilled trades students have gone on to earn their associate and bachelor’s degrees and are now leaders at their respective companies.
DETROITER March 2017
Monroe offers programs in welding, design drafting and construction management, among other trades. It has 83 apprentices practicing in various trades this semester, and Coomar said he hopes construction companies will come forward to start apprentice partnerships as well. Just as technological innovation is impacting the skilled trades, education needs to be nimble and adaptive to industry needs, said Michael Nealon, vice president of academic affairs at Henry Ford College (HFC) in Dearborn. He said there needs to be a paradigm shift toward “just-in-time” instruction that allows for students to begin working while continuing to learn new skills. Leaders at HFC want to see more employers partner with the college and embrace an “earn and learn” approach — that is, to hire students before they finish school, but still allow them to continue their education while employed. They would also like to see more employers stepping up as instructors. Labor unions need to participate and contribute as well, Nealon said. “It really needs to be a community-wide effort,” said Gary Saganski, HFC’s director of academic relations. Saganski said there is still plenty of work to do in order to close the talent gap in Michigan. “I do believe we are beginning to move the needle by way of creating employment pathways, competency-based technology programs targeted for these occupations, and local and regional partnerships between the community, education, industry and government,” he said. Dannis Mitchell, Barton Malow’s diversity manager, is working at the grassroots level. She said for some interested candidates, understanding the skilled trades and job requirements can be difficult. There are nearly 20 different trades, ranging from ironworker to design engineer, available in Michigan. “People usually blank stare when asked, ‘What kind of construction do you want to get into?’” Mitchell said. She has spent the last year gathering information to disseminate to prospective candidates to limit confusion during the decision-making process. Sachse Construction is also working with community partners to bolster the talent pipeline. The company and more than 35 of its subcontractors worked with Junior Achievement of Southeast Michigan last
October to host a Construction Academy for 500 metro Detroit students. “The event was a huge success, and we’re looking to host similar educational opportunities in the future, so that we can help young people learn as early as possible that this
Sachse Construction employs thousands of skilled trades workers for remodels and renovations such as the International Bancard project in Detroit.
is a plausible and sustainable career option,” Sachse said. Melissa Anders is a metro Detroit native and freelance writer.
BACK TO WORK Last December, Detroit Mayor Mike Duggan announced a new program where the city works with local unions and their Joint Apprentice Training Committees to set annual goals for increasing the number of Detroit union members and apprenticeship programs. Contractors who hire participating unions are considered in compliance with the city’s community benefits agreement (CBA), which levies fines on companies that do not hire at least 51 percent of their workforce from the pool of available talent living in Detroit. Plumbers Local 98 and Mechanical Contractors Association of Detroit (MCA) are the first to join the Detroit Skilled Trades Employment Program (STEP). While Local 98 has more than enough candidates to fill its apprenticeship program, that has not always been the
case. A few years ago, the union teamed up with MCA and local organizations to attract more residents. “We did have a problem but we are getting better and better at it … we are definitely working to reach out to the city and get more Detroiters in our program,” said Jon DeRoo, business agent at Local 98. Ryan Maibach, president of Barton Malow Co., applauded the STEP program. Previously under the CBA, contractors for the Little Caesars Arena were fined $675,000 by the city for not meeting the 51 percent threshold. “What the mayor has done in finding opportunities to connect with trade unions to help change the approach to getting Detroiters plugged into projects I think is spot on,” he said.
DETROITER March September 2017 2015
State legislation offers muchneeded boost to redevelopment across Michigan By Wensdy Von Buskirk
New Life Into BROWNFIELDS “We’re going to reimburse private investors who have the wherewithal to transform properties like that,” Horn said, adding that nearby states already have incentives in place that are taking large-scale developments away from Michigan, a trend he aims to change with Senate Bill 0111. JUMPSTARTING TRANSFORMATIONAL DEVELOPMENT
Hayes Hotel, Jackson.
hen the Pontiac Silverdome was built in 1975, it was the largest stadium in the country. With its signature fiberglass roof — held aloft by air pressure alone — it was also one of the world’s most modern.
Although concrete numbers are hard to come by, Michigan is riddled with brownfields — former industrial or commercial sites affected by real or perceived environmental contamination. From shuttered plants in urban downtowns to manufacturing facilities on thriving waterways, these vacant properties are not only eyesores, but also a drag on the economy, tax revenue and overall quality of life.
Horn has reintroduced bold new legislation that could take the Silverdome from “Transformers” to transformational, and help bring new life to other brownfield sites across the state.
With each city limited to one approved plan per year, proponents hope projects will be spread across Michigan, while a long list of checks and balances are meant to ensure the tab is picked up by the private sector. The legislation is supported by MI Thrive, a coalition of nearly 40 communities, economic development leaders and chambers of commerce from across the state. Tim Lake, president and CEO of the Monroe County Business Development Corp., is among MI Thrive’s many supporters. “This legislation is a tool that’s been really missing out of the toolbox for quite a while,” he said.
But when “The Dome” lost the Detroit Lions to Ford Field in 2002, it slid into decline. Today, after several failed attempts at revitalization, the 127-acre site stands vacant, its once stateof-the-art dome long since deflated. Aside from serving as a setting of urban ruin in the upcoming movie “Transformers: The Last Knight,” Pontiac Mayor Deirdre Waterman admitted its only function is as “the world’s largest bird bath.” And for Michigan Sen. Ken Horn (R-Frankenmuth), humor lies in the description alone. “Who in their right mind would develop on that site? You have cleanup, demolition, remediation of the soil, removal of the parking lot … It will cost hundreds of millions of dollars and that just starts the process,” Horn said. “No Michigan taxpayer should be on the hook for the cleaning, but who’s going to do it? If nobody does, it sits like that for eternity?”
portion of the tax revenue a new project generates. In this way, backers say, jobs are created and communities reinvigorated with no risk to taxpayers or the state.
Brad Williams, vice president of government relations for the Detroit Regional Chamber, said a similar bill was introduced in 2016 but did not pass prior to the end of the legislative session. Williams is hopeful the new legislation will be signed by Gov. Rick Snyder this year.
Templeton Site, Portage Avenue, Sault Ste. Marie.
Still, they stay empty because from a development perspective, it is much cheaper and more efficient to build on a “green” site. So as fresh land is claimed and urban sprawl creeps on, abandoned sites are left behind. Horn's bill, which await passage in the House, would unlock $5 billion in new investments statewide to give developers the tools they need to bridge financial gaps holding back complex brownfield projects. Through tax increment financing (TIF), project developers would be able to keep a
According to the Coalition, at least 15 projects across the state stand to benefit from the legislation including the Sappi Paper Mill in Muskegon and Lansing’s “Red Cedar Renaissance” development, a proposed $380 million mixed-use project that will connect Michigan State University and the downtowns of Lansing and East Lansing. “The sorts of developments we’re talking about that could take advantage of this program are the kinds to change the skyline or footprint of a city,” Williams said. “The prospect of what this program could do for the region and state is incredibly exciting.” Wensdy Von Buskirk is a metro Detroit freelance writer.
DETROITER DETROITER September March 2015 2017
4. JACKSON The iconic Hayes Hotel in the heart of downtown Jackson has been vacant since 2003. The city and its partner, HRS Communities, have plans to transform it into a mixed-use development that will be a catalyst for revitalization.
5. KALAMAZOO The redevelopment of Arcadia Commons West, a four-block area in downtown Kalamazoo, has long been one of the city’s top priorities and a key part of its strategy to build a vibrant downtown environment that attracts talent and businesses.
6. LANSING Red Cedar Renaissance, a proposed $380 million, mixed-use village project on Michigan Avenue, will connect Michigan State University and the downtowns of Lansing and East Lansing.
The city of Marysville is working on concepts to redevelop the former DTE power plant along the St. Clair River into a thriving riverfront destination.
10 14 13
Efforts are underway to redevelop the “Sappi Paper Mill” into residential and commercial development on the waterfront.
9. PETOSKEY Since 2005, several developers have considered a vacant parcel known locally as “The Hole” and have presented plans and renderings to redevelop the property to bring jobs and activity to the city’s downtown.
10. PONTIAC Legislation would help transform the vacant Silverdome into a major mixed-use development.
11. SAGINAW Senate Bills 0111-0115 would unlock transformational projects that will bring jobs, retain talent and create vibrant communities across Michigan.
1. DETROIT Plans are underway to restore the iconic Fisher Building, referred to as “Detroit’s largest art object.” It has suffered from years of neglect.
2. GRAND RAPIDS The Grand River Rapids restoration project includes restoring the Grand River and promoting the redevelopment of underutilized waterfront property – old industrial sites, obsolete public facilities and surface parking lots.
3. GRATIOT COUNTY City leaders moved a metal scrapyard and railroad off the riverfront in downtown Alma and are working to create a revitalized waterfront district with housing, dining, shopping and recreational opportunities.
A comprehensive, multi-project vision to revitalize downtown Saginaw that will take advantage of the city’s key economic anchors and attract 21st century, knowledge-based businesses is underway.
12. SAULT STE. MARIE The city has developed a broad vision for new mixed-use and tourism-oriented development downtown and has identified a number of target sites, many of which have been vacant for decades.
13. SOUTHFIELD City officials hope to redevelop the vacant Northland Mall as a master-planned district that creates an exciting destination for businesses and residents and enhances the value of the community.
14. STERLING HEIGHTS The 1.5-million-square-foot Lakeside Mall shopping center is still in business, but is now being marketed for sale. The city hopes to reimagine and revitalize the entire district into a vibrant area that will serve residents for the next several decades. Source: MI Thrive Coalition.
DETROITER March September 2017 2014
Southfield City Centre parcel redevelopment. The district’s boundary extends outward from this triangle in two places to include Southfield’s Municipal Campus and Lawrence Technological University.
CHOOSE TO REUSE Northland Center among trend of adaptive reuse projects across region By James Amend
ll across metro Detroit, what’s old is new again.
Spurred by a rebounding economy, the region’s real estate development is in overdrive and taking a unique twist by bringing failed properties back to life. “Our market right now is very hot,” said Cindy Ciura, principal of CC Consulting in Bloomfield Hills. “It’s attracting international, as well as national interest.” Residential, commercial and mixed-use developments are occurring in the city of Detroit, led by local urban revivalists Dan Gilbert, founder and chairman of Quicken Loans, and the Ilitch family. However, this development stretches into every suburban enclave across the tri-county area and beyond.
While the end of the Great Recession unleashed demand for new developments and cash to fund projects, it also shifted the approach of investors, experts say. Developers are wrestling with record-high construction costs because the recession forced many skilled tradesmen out of business, into retirement, or convinced their offspring to find other less-cyclical professions. Prior to the downturn, developers were paying $75 per square foot to build. Today, it costs $125 per square foot or more, said Chris Brochert, partner and co-owner of Lormax Stern Development Co. in Bloomfield Hills. “At the same time, inflation has not gone up, so very few can afford these high rents,” he added. To keep a lid on costs, developers have turned to adaptive reuse, where an existing
site or building is renovated for purposes other than its original intention. Adaptive reuse is also attractive because it removes blighted properties from communities, encourages parallel real estate investment and, as a form of land conservation, it keeps undesirable urban sprawl in check. However, adaptive reuse sometimes draws concerns over historical preservation, so developers, communities and governments must work hand-in-glove to succeed. GOVERNMENT AND COME TOGETHER
The story of Northland Center shopping mall in Southfield illustrates how blight can be erased, new development can be integrated into the community, and history can be preserved. Anchored by a four-story J.L. Hudson’s department store, Northland dominated Detroit shopping
DETROITER March 2017
for 61 years until it became the victim of suburbanization and competition from newer destinations. It was shuttered in 2015 after falling into financial chaos. But instead of watching the 12-acre site decay, the city of Southfield bought the property for $2.4 million with the intention of spending up to $10 million to raze the mall and sell the land to a developer. “The city purchased the property to protect, maintain and ultimately increase the property values for Southfield’s home and business owners,” said Southfield Mayor Kenson Siver. “We did not want Northland to become a vacant shopping center significantly blighting the community.” But while the property has a bright future, an intricately choreographed dance paved the way. The city secured a loan to buy the land and has been conducting fundraisers to repay it. The mall contained a unique tunnel system, which was used for storage and deliveries, and Southfield has been stockpiling dirt at every opportunity to backfill it when it is razed. Bids were put out for demolition costs and inspections revealed asbestos that must be remediated, a delicate project that should begin in May or June and take up to eight months to complete. An advisory firm was hired to determine the most appealing development contractor, and hundreds of thousands of dollars were raised to secure historically significant pieces of art from the mall. Community feedback suggested saving the Hudson’s portion of the site for its historical significance and the goal is a mixed-use development. The city has seen preliminary cost estimates and an initial design, which was presented to council members in March. City officials said they would like to turn the site over to developers as soon as possible, but they want to be careful that it complements other projects underway. “We’re trying to be fiscally responsible in the work we are doing and consistent with other work we’re doing around the city,” said Rochelle Freeman, director of business and economic development for Southfield. A MUCH-NEEDED FACELIFT On the region’s east side, Lormax Stern took over the dilapidated Macomb Mall in 2013.
The firm renovated and modernized the interior and exteriors, and lured in popular retailers such as Dick’s Sporting Goods, Kohl’s, Old Navy and Sears. “We brought it from the 1970s to 2015,” Brochert said. “It is now thriving with new tenants and is more appealing to people in the surrounding area.” Lormax Stern also worked its magic with a former Jacobson’s department store in Grosse Pointe. The 70,000-square-foot building was renovated for first-floor retail and is anchored by tenants such as gourmet grocer Trader Joe’s, and upscale clothiers Jos. A. Bank and LOFT. The second floor was dedicated to office space, while an adjoining parking deck was redone for convenience. In downtown Birmingham, AF Jonna Development LLC of Bloomfield Hills took over the struggling Palladium Building, downsized its movie theater, and added office and residential space to complement restaurants. Brochert said the project saved an important corridor of the bustling city.
Lormax Stern Development Co. renovated the Jacobson's department store in Grosse Pointe for first-floor retail, including tenants such as Trader Joe's, Jos. A. Bank and LOFT.
“If that would have gone downhill, it would have been disastrous,” he said. A few miles up the road in Bloomfield Hills, a $500 million mixed-use development called Bloomfield Park stalled in 2008, creating an 87-acre, post-apocalyptic scene of windowless concrete buildings and crumbling parking garages. But in 2015, Southfield-based developer Redico bought the rights to the site and $350 million of initial demolition work started last year. Dale Watchowski, CEO of Redico, said Bloomfield Park typifies his firm’s strategy. “We’re focused on getting in and out within two years. We don’t want to get tied up in a long deal where the economy can turn on us,” he said. “A successful development requires good project management, and the process has to move quickly.” James Amend is a senior editor at WardsAuto in Southfield.
DETROITER March 2017
Under Construction: MICHIGAN'S
BUILD-TO-SUIT MARKET As the industrial real estate market nears peak occupancy, manufacturers consider building to fit needs By Paul Vachon
Fraza Forklifts’ office is one example of the many build-to-suit projects taking place in Southeast Michigan.
Despite the tight supply, new space is being added slowly and cautiously, with build-to-suit as the predominate mode of construction. Industry experts say that this is due to a low appetite for risk on the part of many investors. “There’s not a lot of availability out there, but brokers indicate that most people are still not specing buildings these days. Everything we design is build-to-suit,” said Ron Moran, vice president of Ghafari Associates, a Dearborn-based architectural firm that designs projects worldwide.
Justin Robinson, vice president of business attraction at the Detroit Regional Chamber, attributed this durability to a strong local economy and not just to the routine swing of the market pendulum.
Despite significant industry diversification, however, automotive and manufacturing dominates Southeast Michigan, which makes the status of the industrial real estate market a key indicator of economic health. According to a recent report by Colliers International, the region’s overall vacancy rate stands at 4 percent — a historic low.
“Right now, the market looks stable for the next several years. One factor is that during the last downturn many of the older, more inefficient buildings were demolished, thus removing that space from the market,” Robinson said. “These were mostly legacy buildings constructed from the 1950s to the 1970s that had been home to OEMs and tier one suppliers. The market has thus been rightsized, so even if it were to experience a downturn, I don’t think it would have a significant impact.”
everal years into Michigan’s economic recovery has provided the business community with a unique perspective: One that has begun to show the fruit of years of rightsizing, innovating and reimagining their mission. The return of a healthy economy has cleared away excess inventories and set the stage for new expansion.
”There’s not a lot of availability out there, but brokers indicate that most people are still not specing buildings these days. Everything we design is build-to-suit." — Ron Moran, Vice President, Ghafari Associates This approach has both pros and cons, Moran explained. A big disadvantage is the lead time involved with these types of projects. A company opening a new plant generally wants to be up and running within six to nine months, a realistic timetable if a preexisting building can be found. However, Robinson said the schedule for a build-tosuit project is much more time consuming. “An average building can take as much as 18 months to deliver by the time you identify the site, address potential
DETROITER March 2017
brownfield issues, get the infrastructure in the ground and put up the structure,” he said. “This type of timeline can be difficult for many companies.” Robinson pointed out that in other major metropolitan areas, speculative building is common, but its relative scarcity in Southeast Michigan often forces tenants to be creative. “They might have to take an older or smaller structure and modify it to meet their needs,” Robinson said. An advantage to the build-to-suit option is the ability for the client to specify features that will meet his or her unique needs and operate at maximum efficiency.
”In Michigan, we manage 18 to 20 million square feet, the clear majority of which is space we built on greenfields or brownfields, or existing, often blighted, buildings we renovated." — Susan Harvey, Senior Vice President, Ashley Capital As Moran explained, some examples might include a minimal floor thickness to support heavy equipment, steel framing strong enough to accommodate overhead cranes or other equipment, and a sufficient HVAC system that meets state and federal regulations. As the overall market matures, developers report that build-to-suit options are becoming more specialized. Ryan Dembs, CEO of Dembs Development in Farmington Hills, said that while his company’s buildto-suit volume is increasing, much of it is for technology-related companies. Dembs said his company does do a limited number of on-spec buildings and anticipates other developers will gradually fall in line as their confidence level increases. One developer that recently resumed embracing speculative development is New York-based Ashley Capital, which builds and manages industrial real estate throughout the eastern United States and has an office in Canton.
Ghafari Associates, a Dearborn-based architectural firm that designs projects worldwide, has worked on several build-to-suit offices including LG Chemical in Holland, Mich.
“In Michigan, we manage 18 to 20 million square feet, the clear majority of which is space we built on greenfields or brownfields, or existing, often blighted, buildings we renovated. In both cases, we worked without a tenant in hand and subsequently leased the buildings out,” said Susan Harvey, senior vice president at Ashley Capital. “We’re just finishing our first speculative project since the end of the Great Recession,
on the site of the Hazel Park Raceway, a 575,000-square-foot building,” she added. For Ashley Capital and others, the gradual emergence from the recession has been fraught with obstacles. “Lending practices have changed, and it’s gotten more difficult for developers to put together deals for spec buildings,” Harvey said. She does, however, express cautious optimism for the future both locally and throughout the nation. Paul Vachon is a metro Detroit freelance writer.
DETROITER March 2017
Celebrating Detroit’s Doers The 2017 Detroit Policy Conference highlights the people and institutions impacting the city’s revitalization
he Detroit Regional Chamber’s sixth annual Detroit Policy Conference brought together more than 700 business, community and political leaders from across the city and region at the MotorCity Casino Hotel on March 2. The Conference featured Urban Planning for the American City’s Toni Griffin, Ilitch Holdings Inc.'s Christopher Ilitch, Bloomberg Associates’ Janette SadikKhan, and various panels focused on reigniting Detroit’s innovative spirit. The Conference also celebrated how the progress made in Detroit is undeniable while also calling for more collaboration to ensure all Detroiters benefit from the development taking place downtown and in the neighborhoods. The Conference highlighted the power of changemakers who are positively impacting the city and region’s long-term prosperity. 1. Christopher Ilitch, president and CEO of Ilitch Holdings Inc., talks about the impact of The District Detroit on providing local jobs. 2. Archer Corporate Services’ Dennis Archer Jr., Basco of Michigan’s Roger Basmajian, The Platform’s Peter Cummings, and Develop Detroit’s Sonya Mays, discuss inclusive development. 3. Olga Stella, executive director of Detroit Creative Corridor Center, delivers a Power Perspective.
DETROITER March 2017
SHARING THE CONVERSATION What people said during the 2017 Detroit Policy Conference
@DetroitYP: The soul of this city is in its neighborhoods. The heart like other cities is inherently in its core-Planning Director @CityofDetroit #DPC17
@TheDailyDetroit: 16 years ago, no pro sports teams were playing in District #Detroit area. Next year, all four of ours will be, says Chris Ilitch #dpc17
@JGallagherFreep: SadikKhan: Detroit's "such wide streets" create huge opportunity for protected bike lanes with benefits for all #DPC17 #freep
4. Toni Griffin, founder of Urban Planning for the American City, delivers a keynote address. 5. The Detroit News’ Nolan Finley moderates a panel on the philanthropic impact in Detroit. The panel featured Ralph C. Wilson Jr. Foundation’s Dave Egner, Knight Foundation’s Katy Locker, DTE Energy Foundation’s Faye Nelson, and Rock Ventures’ Chris Uhl. 6. Janette SadikKhan, transportation principal at Bloomberg Associates, shares insight on transforming urban streets. 7. Detroit Police Chief James Craig and Rochelle Riley, columnist for the Detroit Free Press, discuss safety and innovation.
@313JenniferK: MotorCityElectric chief predicts 5-10 yr solid employment for skilled trades in Detroit ... #DPC17 @CarolGalle: "Detroit is not blighted; it's not distressed. It's just grossly underserved", Peter Cummings. #DPC17 @ignition__media: "Detroit is not a blank canvas." says Cornetta Lane from @PedaltoPorch. #DPC17
DETROITER March September 2017 2015
Farewell, MR. I Business leaders celebrate life of iconic entrepreneur Mike Ilitch By Paul W. Smith
n keeping with this year’s theme, “Reigniting an Innovative Spirit,” the Detroit Regional Chamber's 2017 Detroit Policy Conference honored one of Detroit’s most iconic changemakers – Mike Ilitch, founder of the Little Caesars pizza chain, entrepreneur and community philanthropist. Ilitch died on Feb. 10.
Editor’s note: The following is an abridged version of the tribute provided by Paul W. Smith at the Detroit Policy Conference. Mike Ilitch was a multifaceted person. He was larger than life to everyone who met him and he always left an indelible impression, whether it was a brief encounter in one of his Little Caesars stores, a ride in the elevator with a colleague, a congratulatory phone call with a player … or an interview with one of the many media folks who had the privilege to have him on their show. He was a proud son of immigrants, a U.S. Marine and lifelong patriot. He was a professional baseball player; a shortstop with the Detroit Tigers minor leagues. He was also a devoted husband, father, grandfather and great-grandfather. Above all, he was a family man who loved his children. He had seven kids, and his wife Marian said he would’ve had 12 if he could’ve. He defined the term “entrepreneur,” growing one pizza shop into the largest carryout pizza chain in the world.
He was an unapologetic sports fan, which made him a phenomenal team owner. He was unparalleled in his devotion and generosity as a community advocate. The Wayne State University Mike Ilitch School of Business, now under construction, will be a reminder of his generosity for generations to come. And of course, he was a constant ambassador for the city of Detroit. Mike grew up in Detroit. He played ball in Detroit. He worked in Detroit and FOR Detroit. When others were turning their back
Left: Mike Ilitch gives fans a thumbs up. Right: Mike Ilitch poses for a photo outside of Comerica Park, home of his Detroit Tigers.
on this city, Mr. I embraced it. With both arms, he embraced the city. Mr. I provided a consistent, ongoing dialogue to just about anyone who would listen, about the value and vibrancy and importance of Detroit. In fact, now, when I write Detroit, “MI”you know what I think? I think Detroit, “Mike Ilitch.” Paul W. Smith is host of WJR NewsTalk 760 AM.
DETROITER March 2017
A Budget Plan for
All of Michigan
Job creation, quality education among key issues for state budget By Rep. Laura Cox of Southeast Michigan and all of our state’s residents. The 2017-18 legislative session has only just come to order and we are already hard at work to deliver a budget on time, and ahead of the constitutional deadline. We must do this in order to give local governments, school boards and others the ability to accurately design their budget plans to fit their needs. I am proud to have been a part of an economic recovery that has transformed Michigan in so many ways over the past few years. Yet, many families are still struggling to make ends meet, to provide for their children’s education, to keep up with their mortgage payments. It is my intent to help ease that struggle by prioritizing vital services, programs and state departments that are essential to aiding the most vulnerable of our citizens. Laura Cox represents Michigan’s 19th District in the House of Representatives.
any of my life experiences have prepared me for my new role as House Appropriations Chair. As a U.S. Customs and Border Protection agent, I learned how to be a fighter and make tough decisions. In my role as a wife, mother of four, and grandmother of two, I became an ardent protector. In my 10 years as a member of the Wayne County Commission, I learned to scrupulously allocate the $2.4 billion at the county’s discretion. Now, as chair of the Michigan House Appropriations Committee, I am using each of these skills and working with my colleagues and the governor in order to craft a blueprint for our state finances which addresses our immediate needs, while investing in the future success
We are investing in our children’s future by spending more money than ever before for K-12 education. Not only are we putting more money in classrooms to help kids learn and succeed, we are also paying down the debt that school districts accrued so even more funding can go toward our children’s education. Furthermore, we are investing in the future for families who have had to tighten their belts when jobs were scarce. Now there is an abundance of good-paying skilled professions, but we do not have enough people trained to work those jobs. We are investing in skilled trades and career and technical education so more people are qualified to work in those jobs, giving them more secure futures and enabling them to remain in Michigan. We must continue to make our communities safer by addressing the concerns within our
communities and focusing on the needs of public safety officers. Because of smart budgeting, we have brought the violent crime rate down in Flint, Detroit and Saginaw, three cities previously ranked at the top of the FBI’s violent crime list. The state budget provides funds for every city, township and village so officials can provide vital services for communities. Public safety, fire protection and emergency medical care all rely on the spending plan being developed in the capitol. We must strive to improve our roads and bridges, giving families safe passage on our highways and ensuring commerce can navigate smooth roads so our economy can continue to grow. We also are looking ahead to Michigan’s future by maintaining the state’s emergency fund. At one point in the notso-distant past there was only enough money in the emergency fund to keep the state government operating for 30 minutes. Today we have invested wisely to guard against a reversal of fortunes so we will not have to endure another lost decade. This state budget plan will focus on the issues that are so important to Southeast Michigan and the state as a whole. From boosting job creation so that we can support our loved ones, to ensuring that our children have access to quality education, health care and the chance to provide a future for themselves. From keeping our streets and communities safe to safeguarding ourselves from another recession. By producing a responsible, balanced budget, we can help ensure that our friends and neighbors have the best possible opportunity for success, prosperity and happiness. Laura Cox is chair of the Michigan House of Representatives’ Appropriations Committee.
DETROITER March 2017
On the Roster Join us in welcoming these new members to the Chamber. We encourage you to contact them for future business opportunities.
Arthur J. Gallagher & Co. Anne Young 30150 Telegraph Road, Ste. 408 Bingham Farms, MI 48025 586.292.8785 www.ajg.com Arthur J. Gallagher & Co. is an international insurance brokerage, risk management and employee benefits consulting firm with operations in 33 countries. Gallagher offers client-service capabilities in over 150 countries through a network of correspondent brokers and consultants. Gallagher’s Employee Benefit operations offer a full range of employee benefit and HR consulting solutions, including benefits strategy, plan design and management, financial planning, actuarial, data analysis, benchmarking, retirement brokerage and consulting, human resource services and more. Doner Courtney Cooley 25900 Northwestern Hwy. Southfield, MI 48075 248.354.9700 www.doner.com In today’s marketplace of ideas, the ones that win are the ones that move people. These ideas go beyond capturing attention. So kinetic, you’re inspired to share, tweet, post, redeem, pin, shop and connect. That’s what makes brands go. That’s what we make. Since 1937, Doner has been the builder of storied, iconic brands. Brands of the people. Independent Bank Michael Stodolak 623 Washington Ave. Bay City, MI 48708 248.743.4032 www.independentbank.com Independent Bank Corp. is a Michiganbased bank holding company with total assets of approximately $2.5
billion. Founded as First National Bank of Ionia in 1864, Independent Bank Corp. operates 63 offices across Michigan’s Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, investments and title services. Independent Bank Corp. is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves.
JMA Financial Services Inc. 313.401.1449
Michigan Bankers Association www.mibankers.com
Michigan Health Endowment Fund healthendowmentfund.org
Benepay Technologies www.benepaytech.com
Burris Law PLLC
Charles Stewart Mott Foundation www.mott.org
Detroit Horse Power
DPro New Media www.dpro.us
Ethos Development Partners www.ethosdp.com
Hilite International Inc. www.hilite.com
HKS Architects PC 248.347.7050
Home Team Detroit 313.444.8326
Michigan Israel Business Bridge www.business.michiganisrael.com
Michigan Virtual University www.mivu.org
Motor City Travel
Pink Elephant Products
Ron Otto Travels LLC
SAPTC - Shanghai Auto Parts T&C www.saptc.co
Schafer and Weiner PLLC www.schaferandweiner.com
Special D Events Inc. www.specialdevents.com
Business Builder Topknotch Graphics www.topknotch.com
United Christian Broadcasters (Canada) www.ucbcanada.com
Forward Detroit A. Raymond Corporate North America Inc. Ford Motor Co. Key Bank Patina Solutions SAPTC - Shanghai Auto Parts T&C Switch Thomson Reuters Tax and Accounting Western Michigan University
Up and Coming Mark your calendar with these regional business events
Networking Reception with Michigan Congressional Delegation Skyline Club 2000 Town Center Southfield, MI 48075 5:30 to 7:30 p.m. $15 Chamber members only. Please note, pricing increases on April 3 to $25. Network with members of Michigan’s congressional delegation along with Chamber members from all sizes and industries.
Attracting and Engaging Millennials Greektown Casino-Hotel 1200 St. Antoine St. Detroit, MI 48226 8 to 11 a.m. $55 Chamber members; $95 Future members Discover best practices to retain your company’s top talent, learn the latest trends to improve
workplace culture, and discover tactics to attract and maintain the most qualified employees, maximizing on talent in Michigan.
Free to attend and open exclusively to Chamber members.
May 30 – June 2
Whether you are a new member or a longtime supporter, learn the power of your Chamber membership and discover resources to take your business to new heights while connecting with other members.
2017 Mackinac Policy Conference Grand Hotel, Mackinac Island $2,250 Chamber members; $750 Chamber member spouse $3,100 Future members; $750 Future member spouse. The Mackinac Policy Conference – the Detroit Regional Chamber's premier event – brings together business and government leaders to re-energize Michigan. Approximately 1,700 attendees will gather for the 2017 Conference, held at the historic Grand Hotel on Mackinac Island.
Membership Maximizer Brooklyn Outdoor 2501 Russell St., Suite 400 Detroit, MI 48207 8:30 to 10:30 a.m.
Inside the CEO Mind The Rattlesnake Club 300 River Place Drive Detroit, MI 48207 8 to 10 a.m. $30 Chamber members; $50 Future members Hear from Andra Rush, founder, president and CEO of Rush Group LLC, as she shares her unique perspective as a female and Native American business owner and how she has grown Rush Group LLC into three successful companies.
DETROITER March 2017
In the News Good things are happening to businesses throughout metro Detroit
American Axle & Manufacturing Inc. recently announced Donald E. Wright has been appointed vice president and chief information officer. Wright will continue to lead the development and execution of A AM's information technology strategy to ensure that all necessary systems are supporting company operations and objectives. OpTech, a Troy-based IT, engineering, health care and financial workforce solutions provider, was recently named one of the “Best and Brightest Companies to Work For” by Corp! magazine. This is the fifth consecutive year that OpTech received this honor. DTE Energy was recently found to be a leader in residential customer engagement among the largest electric and natural gas utilities, as reported in a national study. DTE was one of 46 utility companies across the United States to receive the designation of “Customer Champion” for its relationship with customers, including brand trust, product experience and operational satisfaction. KPMG LLP, the U.S. audit, tax and advisory firm, topped the Big Four public accounting firms for the third consecutive year on Fortune magazine’s “100 Best Companies to Work For” list. It moved up 31 spots with its highest ranking to date at No. 12, the firm marks the milestone during its 120th anniversary. Providence-Providence Park Hospital in Southfield was recently ranked as one of the nation’s top 15 major teaching hospitals and one of the top 100 hospitals in the United States by Truven Health Analytics. BorgWarner announced that Roger Krone has been named to its board of directors. Krone is chairman and CEO of global science and technology company Leidos Holdings Inc., where he leads 33,000 employees in solving important problems in defense, intelligence, homeland security, civil and health markets. Walsh College recently named Jenny Tatsak as chair of business communication. In addition to her current role as professor of business
communications teaching undergraduate and graduate classes, Tatsak will now oversee the Business Communications Department and lead the Executive Success Center. Dickinson Wright PLLC is pleased to announce that attorney Monica Labe has been named a “2017 Leader in the Law” by Michigan Lawyers Weekly. UHY Advisors Inc., one of the nation’s fastest growing professional services firms, recently announced the appointment of six new managing directors: Cynthia Hannafey, Stacey Massa, Pamela May, Keith Moore, Marian Shaw and Paul Truber. Joseph Richotte, an attorney and shareholder with Butzel Long, was recently appointed to the State Bar of Michigan’s Appellate Practice Section Council. Rehmann is pleased to announce that it has named Sandy Shecter, director of the firm’s accounting, consulting and tax (ACT) department. The department assists businesses with compilations, reviews, changing tax regulations, retirement plan services, budgets and financial forecasts. Jim Robinson was recently named regional president of Chemical Bank’s Southeast Michigan region. He is responsible for aligning the efforts of a cross-functional leadership team to drive growth and ensure consistent service delivery. ASG Renaissance was recently honored with a Platinum MarCom Award for its “Driving on Energi” social media campaign. The program has put more than 60 social media influencers behind the wheel of a new Ford Fusion Energi or Ford CMAX Energi to share content about their experiences with the cars. The aim of the project is to promote plug-in electric vehicles through social media. TechTown Detroit was named the Detroit host for Erie Hack, an international, tech-driven water innovation competition and accelerator program. TechTown launched the months-long series of events with an Erie Hack Challenge Kickoff in February. Erie Hack will bring together coders, developers, engineers and water experts to
generate creative solutions to challenges facing the Lake Erie watershed. Dykema, a leading national law firm, recently announced that Sandra Cotter, director of the firm’s Regulated Industries Department and leader of its Government Policy and Practice group, was elected to the Michigan Chamber Foundation Board of Directors. Miller Canfield, a global law firm headquartered in Detroit, recently announced that it has again been ranked first among Michigan bond counsel law firms in the 2016 Bond Counsel Rankings, published by Thomson Reuters.
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Published on Apr 3, 2017
The latest issue of the Detroiter Magazine takes a closer look at the state of the commercial and industrial market across Southeast Michiga...