DETROIT | Development & Construction: Motown Lowdown

[animatedmartian]

Downtown Detroit's rent market nears magic number: $2 per square foot



Since the late ’90s, downtown Detroit landlords have dreamed of the day they could charge apartment renters $2 per square foot. It was a magic number, like a major league pitcher winning 20 games or a lottery jackpot hitting $100 million.

That’s why the 625-square-foot, one-bedroom apartment being offered at The Albert Capitol Park should have a historical marker. The rent is $1,385 a month. That adds up to $2.22 per square foot.

“We are there and it means downtown is about to be supercharged,” said James Van Dyke, a key downtown developer. “No more ridiculously long wait lists to rent something downtown. For developers, no more having to find eight, 10 different sources of financing, because a bank may actually be willing to give a traditional loan.”

It means the skyrocketing rent for downtown apartments in the hot residential areas of Midtown, riverfront, Eastern Market, and Corktown could begin to level off in the next few years. More financing for developers means they build more apartments. More supply means more competitive prices.

If it does level off, renting a place in the trendy parts of Detroit may continue to cost about the same as renting in the trendy parts of Cleveland, Kansas City, or San Antonio, according to a national report on apartment rents in 46 U.S. cities. The average will go up — but it won’t hit anywhere near the level of a New York ($4,100-a-month average) or San Francisco ($2,540).

....

The average rent is now in the $1.60-per-square-foot range, developers contend, but the rate is creeping ever higher. The $2 mark already has been met for several penthouse apartments and other top-of-the-line apartments such as The Broderick and Park Shelton.

What makes The Albert distinct is that most of the 127 units will be around the $2-per-square-foot mark — not just some of the the building’s best apartments.

...

Magic Johnson development team to host public meeting on plan for Detroit's State Fairgrounds

A development team led by former NBA star Magic Johnson will update the public on plans for the 162-acre, former State Fairgrounds property in northern Detroit at a meeting June 26 at the Northwest Activities Center.

The developers’ original idea for the site along 8 Mile Road and Woodward Avenue near the new Meijer was derided in November 2012 as “big box boring” by community members, who are pushing for some kind of multimodal transit hub to be included.

It is not clear how much of departure the new plans for the site will take.

“It’s a difference without being a distinction,” said Joel Ferguson, one of the site’s developers along with Johnson and former Detroit Deputy Fire Commissioner Marvin Beatty.

Under the Magic Plus LLC moniker, the Development team submitted the only successful RFP for the state-owned land last August. It included 500,000 square feet of retail and housing, including a movie theatre and mixed-use developments.

Ferguson said some buildings are “being moved around” but said he could not comment further on details of the plan until the June 26 meeting.

....

Here's an atrocious refresher of that plan that thankfully has been changed. Lets hope they didn't just move the big box retail to some other spot and actually created something that doesn't look shipped in from the fringes of suburbia.



Also, the Detroit Zoo broke ground on a new penguin exhibit. Designed by Albert Kahn & Associates. Oddly enough, it's meant to resemble an iceberg (considering how much new architecture already resembles something with many angled triangular shapes, I wouldn't have known). It'll also have an under water tube similar to the one at the polar bear exhibit.






http://www.mlive.com/news/detroit/in...f_detroit.html

[LMich]

With Magic involved, you can stop hoping for something urban, because it won't. This is still very slightly better than what I imagined. At least the giant surface lot is on the interior of the site and they have buildings built up to the exterior along Woodward and State Fair. It's certainly an improvement over the neighboring Gateway mall. I'm also heartened that of all the things that have changed and moved around that a small rail station is still very much a part of the plan. There is certainly enough population with the miles radius of this location to be able to support another station along the Wolverine (and potential commuter line).

[animatedmartian]

You can probably hear my bubble of hope popping in the distance.

Though what really irks/intrigues me is that a project of this size has very little residential. Even with the original proposal, why be so retail heavy? Metro Detroit is saturated with retail, at least in the suburbs. Just the other week, 3 new outlet malls were proposed out in Canton, Romulus, and Chesterfield Township. If not at least urban, I'm at least curious about the lack of residential.

[LMich]

This area (and really just the City of Detroit as a whole) of is under-retailed. It's a way of capturing the city proper market, but being just close enough to the city border to attract the nearby suburban population, too. I'm glad to see retail pulling back in closer to the city; for too long cynical retailers have placed retail just across the border knowing that Detroiters would have to come to them and appeasing suburban customers desire to never step foot in the city unless they had to.

This area (around State Fair) has seen its population absolutely collapse, so there certainly isn't any large demand for housing in the immediate area. When this retail is up and running that will hopefully change and they can begin to rebuild the surrounding neighborhood.

[subterranean]

One of the buildings "being moved around" is the former home of Ulysses S. Grant.

[animatedmartian]

Birmingham turns corner on redevelopment
$75 million in projects include condos, retail
By Kirk Pinho. June 22, 2014

Jana Ecker, Birmingham's planning director, has worked in the planning department for 12 years — and she hasn't seen this much redevelopment since before the recession.

At least five redevelopments, totaling more than $75 million, are ongoing or planned in and around the downtown of the affluent Oakland County enclave. The projects will bring new high-end condominiums and senior living residential space, a new restaurant and more retail and office space to the city.

Samuel Beznos, CEO and a partner in the Farmington Hills-based Beztak Cos., said increasing rental rates for office, retail and multifamily residential space all bode well for Birmingham. Beztak, along with Southfield-based Etkin LLC, is developing the $26 million All Seasons of Birmingham senior residential project at 820 E. Maple Road.

According to the Southfield office of Newmark Grubb Knight Frank, there is 834,000 square feet of office space in Birmingham's downtown, which was 7.5 percent vacant in the first quarter. That's down from 9.6 percent in the first quarter of 2012.

Average asking rental rates downtown were $30.63 per square foot in the first quarter, the highest average in the Detroit office market. That is up from $29.24 during the first quarter of 2012.

The average asking rent in the first quarter in the region was $18.39 a square foot, according to Newmark Grubb.

....

The Forefront, 400 S. Old Woodward Ave., 49,000-square-foot mixed-use redevelopment of the Greens Art Supply building with first-floor retail and 11 high-end condominiums. Developer: Joey Jonna, founder of Jonna Luxury Homes LLC, Birmingham. Estimated cost: $20 million. Completion date: Third quarter 2015.




The Balmoral, 34901 Woodward Ave., 88,000-square-foot mixed-use redevelopment with underground parking, drive-through space, commercial space and residential space. Developer: Woodward Brown Associates LLC, owned by Harvey Weiss and Najib Samona, Royal Oak. Estimated cost: $28 million. Completion date: 2015.




All Seasons of Birmingham, 820 E. Maple Road, redevelopment of former William R. Hamilton Funeral Home into a 131-unit senior housing complex. Developers: Etkin LLC, Southfield, and Beztak Cos., Farmington Hills. Completion date: May 2015. Estimated cost: $26 million.

Prepare your monocles.

Video Link

[LMich]

Hadn't realized until that article how much office space Birmingham has downtown, though, I wonder give the size of the city if the whole city isn't being considered as "downtown." Anyway, it appears much of the Woodward corridor development is coming back, and that the recovery isn't being entirely routed into greenfield sprawl, again. Still, you can't help but wonder how much more strongly we'd be seeing a recovery along existing corridors if at least one of the mass transit projects proposed in this metro had actually been constructed on time.

[animatedmartian]

Interests spread up Michigan Avenue.

West Corktown: Creating Detroit's newest neighborhood
JUNE 24, 2014. MJ GALBRAITH.



Whether you know it or not, there's a new neighborhood being dreamt up for an area west of downtown just beyond the I-75 and I-96 interchange. Its epicenter is the corner of 23rd Street and Michigan Avenue, where a nearly century-old bank building was recently purchased by Lynne and Mike Savino. It will become their new home as the couple works to adapt the old bank into a loft-style building.

They're calling the area West Corktown, "a neighborhood within a neighborhood," and they're thinking that as Corktown's storefronts continue to fill up and become unavailable, the stretch of Michigan Avenue between I-75 and W. Grand Boulevard is the next logical place for development.

As Lynne tells it, the West Corktown name started as a joke and, rest assured, there's still a good deal of humor involved in the branding. But when she and her husband decided to leave the Green Acres neighborhood, Lynne found herself constantly telling her friends that she was moving just west of Corktown. It just grew from there. It's a way for the Savinos to draw attention to -- and, they hope, find some buyers for -- the vacant buildings along that stretch of Michigan Avenue.

As the couple continues to work on their own corner, the Savinos see a lot of potential in the historic buildings that neighbor their own. They've already seen interest from potential buyers, too.

"There are nice buildings here. This red building next door is a great building. There's a lot of small buildings that individuals could purchase for a reasonable amount of money, fix them up," says Lynne. "Corktown is getting packed and expensive. This really is just the next natural direction, hopefully, for things to go."

Bundled in the estate sale through which they purchased the bank was Leroy's U.S. Star Bar -- its liquor license, too. Unlike the bank, which was almost completely stripped by scrappers, Leroy's was left in remarkably decent condition. The Savinos are currently weighing offers from people interested in bringing the bar back to life. Though dusty, there's a great old wooden back bar, a vintage Bevador beer cooler, and plenty of character left in Leroy's.

I think the name rolls off the tongue pretty easily. I just wonder if it's too early to gauge how popular this neighborhood might get when there's hardly been any new residential development in Corktown as of yet. I could certainly see it becoming popular though.

[hudkina]

I guess it's got a better ring to it than Core City. Granted, Core City more falls north of MLK, so I guess you could argue that West Corktown would be the area bounded by I-96 to the east, MLK to the north, and the railroad tracks to the south and west. It's a relatively small area, though it's about the same size as Brush Park.

About 1/3 of the neighborhood is industrial, but the Michigan Ave corridor has some really nice old bones. Much of the historic residential has been replaced by the cheap suburban-style wide-lot development that Core City is known for, so it definitely lacks the charm of Corktown. It is also home to the Grand Lofts.

[LMich]

EDIT: Oh, 23rd Street is actually west of the interchange; I didn't read closely enough. I think the freeways and how they cut up and isolate entire sections of the old westside will always be a hinderance to revitalization attempts in this area, as will he mess of freight rail lines. Were I a developer, I'd be cocentrated on densifying Corktown proper and making my way out from there, mostly north, you know "North Corktown"/Briggs, which was part of Corktown proper before the Fisher cut it off. I'd make my way up 12th and Trumbell before anything else.

BTW, I find it funny these folks moved down from Green Acres. That is quite a change in scenery. lol But, more power to them. If MCS was ever renovated, it would really help as it would bring jobs to the area. Short of that, so long as you leave that hole along Michigan Avenue, it's going to be hard to make "West Corktown" popular unless you want to try and connect up with Mexicantown and try and feed off that energy, but that's also just far enough away to make this difficult.

[animatedmartian]

On the plus side, you have Grand Boulevard that leads directly into Mexicantown and MLK leading directly into Midtown. But yea, I would think that all the gaps between MLK and Fisher would have to be populated before people go west. Then again, it's not like there's anything the dictates that development has to move concentrically through Detroit and often times it only very generally does. But best of luck to those folks, nonetheless.

[hudkina]

The funny thing is that Corktown is really only halfbaked at this time. There's still a ton of revitalization that needs to occur before it can become a proper "urban" neighborhood. Granted, West Corktown would definitely benefit from being along a possible future streetcar line along Michigan Ave.

[LMich]

Originally Posted by hudkina

Granted, West Corktown would definitely benefit from being along a possible future streetcar line along Michigan Ave.

I was thinking the same thing. You connect this place to downtown via a streetcar, and now you're talking. Speaking of which, I wonder how difficult it would be to get a modern streetcar spur off of Michigan and under the tracks to serve Mexicantown? That would be a very successful line.

Anyway, it looks like construction on the Old Redford Meijer is imminent:

Meijer to break ground on second Detroit superstore next week

By John Gallagher | Detroit Free Press

June 24, 2014

Less than a year after it opened a new superstore near Woodward and 8 Mile Road in Detroit, Meijer plans to break ground Monday on a second superstore in the city.

This second store will be built on the site of the former Redford High School at 21431 Grand River in far northwest Detroit in the Brightmoor/Old Redford district. Construction is expected to take about a year.

Meijer executives and local leaders are expected to take part in the 10 a.m. ceremonial groundbreaking.

The new Meijer will create more shopping options for city residents who have often gone outside the city to find basics. The new store will create up to 500 jobs, and feature fresh produce, a full-service drive-through pharmacy, and a gas station.

...

[hudkina]

I always through a spur that travels along Vernor Hwy might be successful. The problem is that Vernor Hwy is a narrow road with a lot of traffic. The ROW is barely more than 60 feet, so any streetcar would almost certainly travel with traffic. Vernor HWY is the only street in the city that would probably benefit from a subway line (as was intended at one point), or an elevated line, but the population density is nowhere high enough to support the costs. The two large neighborhoods are both somewhere around the 15,000 ppsm density, but I would think densities closer to 40,000 to 60,000 would be needed to support an actual subway line.

[animatedmartian]

Gilbert buys the DMP Building. Though honestly I'm kind of Gilbert-fatigued and I hope the next thing he does is announce or show off some planned new construction, specifically something residential.

Gilbert buys Detroit News, Free Press building
By Kirk Pinho. June 27, 2014.



Dan Gilbert has purchased the Detroit Media Partnership building that houses the Detroit Free Press and The Detroit News. The purchased real estate also houses the two daily newspapers’ business operations.

The asking price for the 415,000-square-foot property located at 615 W. Lafayette Blvd. between Second Boulevard and Third Street was $8 million.

Laura Biehl, public relations manager for Gilbert’s Rock Ventures LLC, would not say how much Gilbert paid for the building, which will be redeveloped.

The newspapers will move 550 employees into the old Federal Reserve building at 160 W. Fort St. between Shelby and Griswold streets in October. Gilbert owns the building, which is 167,000 square feet, according to Bedrock Real Estate Services LLC. The newspapers will lease about 86,000 square feet in the building, Biehl said.

....

The Detroit office of CBRE Inc. represented the DMP in the sale, which also includes a nine-story parking structure, two surface parking lots and parking on the ground floor of the building totaling 600 spaces, according to a news release.

....

[LMich]

I'm just glad that it's not going to be torn down, and I hope that this area of downtown eventually becomes a full-fledged neighborhood as opposed to the office-park feel that it has. It's almost as if the city and developers combed through the place for years looking just for the kind of storefronts and such that gave the neighborhood a neighborhood feel and then knocked them out.

[Onn]

Agreed, I think the News/ Free Press building is great and definitely has potential! Glad its being kept!

[LMich]

And, honestly, the property is so big and architecturally segmented that so long as they just save the architecturally significant part of it (i.e. the office/newsroom section), you could actually parcel the site up and redevelop around it. Much of the property is the old printing plant, I believe, which was moved out to the suburbs decades ago.

[animatedmartian]

Speaking of preservation, here's the Michigan Historic Preservation Network on the importance of preserving buildings in Detroit. Of course, I think few people would disagree on that importance.

Video Link

[animatedmartian]

Via DYes. The southern street through Cadillac Square has been closed off and covered with quarter basketball courts. This is apart of Dan Gilbert's plan for "placemaking" in Downtown Detroit.

Originally Posted by Lowell