View Full Version : Stumbling blocks: Vacant buildings impede Detroit redevelopment

Aug 6, 2007, 11:55 PM
Stumbling blocks: Vacant buildings impede Detroit redevelopment

Louis Aguilar / The Detroit News

Big empty buildings continue to stymie downtown Detroit's comeback, particularly in the area under consideration for the new homes of Quicken Loans Inc. and the Detroit Red Wings, developers and city officials say.

The long-deserted buildings litter the downtown landscape, ghostly contrasts to pockets of redevelopment along Woodward, Park Avenue and Grand Circus Park, one of the areas being eyed for the world headquarters of fast-growing Quicken Loans. The potential site for Quicken, for example, is flanked by empty buildings. Some fear a fire-damaged structure next to the site could pose a hurdle for any development there.

Dreams of million-dollar payoffs for those buildings are one reason progress has been slow in Grand Circus Park and elsewhere, some contend. Some owners rebuff offers, willing to let their buildings sit empty while they wait to cash in on redevelopment plans in the works from the riverfront to Midtown.

"Some people think they're holding a lottery ticket," said Brian Holdwick, vice president of the Detroit Economic Growth Corp., the quasi-public city agency promoting downtown development.

"There's always the dilemma of people who just stay one step ahead of (code enforcement) process and wait for a big payoff," Holdwick said. "Besides being vigilant on code enforcement, there's not much we can do. It's a big issue. It has an impact on downtown progress but it won't stop things from happening."

The city-owned Statler site in Grand Circus Park is one possible site for Quicken Loans. The spot would give Quicken the chance to be the kind of catalyst for change that Compuware has been for Woodward and Campus Martius. The other potential site being pitched by the city is the old Hudson's department store site on Woodward.

Grand Circus Park, named after two crescent-shaped parks on Woodward, is in many ways a microcosm of the state of downtown. Although the park is home to successful projects big and small -- Comerica Park, the Detroit Opera House and Cheli's Chili Bar, to name a few -- vacant properties hug the streetscape. A small project being worked on in the area is Angelina's Bistro, which will be housed in the former Madison Theater building.

Olympia on a buying spree

Next door to the Grand Circus Park site is a building whose roof caught on fire when a city-hired construction crew razed the Statler Hotel a few years ago. City officials say something will have to be done with that building for Quicken to build there.

Building owner Anthony Pieroni said he has no immediate plans for the structure and contends no one from the city or Quicken has contacted him. "I don't intend to stop a deal but I don't know how I can be part of this process if no one is contacting me," he said.

He's also aware that all of the talk about Quicken and a new hockey arena makes his fire-damaged empty building more desirable

"I know what the Ilitches are paying for properties around the area. I would sell that building for a bargain rate," he said, though he declined to give a price range.

Olympia Development, the real estate arm of Ilitch Holdings Inc., had no comment, spokeswoman Karen Cullen said.

Olympia Development, whose control includes the Detroit Tigers, Detroit Red Wings and the Fox Theatre, also owns property next to the Statler site. The city is offering that property -- which includes the former United Artists building -- along with the Statler to Quicken.

Olympia has been on a buying spree of mainly empty buildings and lots near Grand Circus Park. This comes at a time when its lease with the city-owned Joe Louis Arena, home of the Wings, soon expires. The company is looking to possibly build an arena in the area behind the Fox.

Waiting for a bonanza

Also near the potential Quicken site are two empty buildings in the 2000 block of Park Avenue. The buildings are boarded up, full of broken windows and graffiti. They belong to Ralph Sachs, who, according to city records, owns a number of Detroit properties.

Six years ago, the city unsuccessfully tried to demolish the property. Repeated calls to a small sign on one of the buildings that advertises itself as the broker (no name is given) were not returned. The buildings have a total of 10 code violations -- everything from graffiti to broken windows to unsafe overhangs -- that Sachs has yet to resolve, according to James Canning, a spokesman for Detroit Mayor Kwame Kilpatrick.

Across Washington Boulevard from the Statler site, the David Whitney building, which has a People Mover stop, has been empty for four years. Owner Becker Ventures Inc. in Troy says there are no immediate plans to occupy it.

"It's empty by choice," said Neil Weissman, executive vice president of Becker. "We've had several offers to lease but didn't think it was appropriate. We're looking at all sorts of uses, from apartment to office to hotel.

"Right now we are doing financial analysis of planning, trying to get our arms around tax credits. There's no timeline.

"But if an offer came along and it was crazy high, of course, we'd listen."

Across Woodward from the David Whitney is the Broderick Towers. Earlier this year, the county almost seized control of the building due to back property taxes and code violations, but developers J.C. Beal and Michael Higgins, a former owner, worked out a deal. The developers are working on sealing the $40 million in financing to continue with converting the building into condominiums and ground-floor retail. The Detroit Pit Stop bar and restaurant opened in the Broderick this spring.

Loft project is success story

The wait-and-see attitude of some building owners was evident to Anthony Ferlito, owner of Ferlito Construction Co., several years ago when he sought to renovate the Kales Building, the original Kresge Co. headquarters.

Ferlito recalled meeting with several building owners near Grand Circus Park as he moved forward with plans to covert the 18-story Albert Kahn building into lofts. That project was successful, and the building is 98 percent occupied, Ferlito said

"It was pretty clear to me that several of those building owners really were just going to sit back and wait," he said.

"Just wait for others to have a go at things and then see what they could do."

You can reach Louis Aguilar at (313) 222-2760 or laguilar@detnews.com.

Aug 7, 2007, 3:18 AM
I have always thought it was a shame that some way couldn't be found to preserve all those empty buildings in downtown. I will never forget the first time I saw it in the late '80's and what an impression it made on me. Knocking down buildings for empty lots and the occasional new development will never turn Detroit into Chicago. Better to preserve it the way it was which was a unique and amazing envionment in the US if not the world. I do recall someone did a photo book on it which is better then nothing I guess.

Top Of The Park
Aug 7, 2007, 4:07 AM
......Although Detroit is older......Denver knocked down so many old buildings in the name of Urban Renewal in the 70's that it would make you sick. These same buildings would be worth a kings ransom in lower downtown where the land just became parking lots. Just now, 30 years later they are beginning to infill. We did have a prime parcel in the middle of Downtown sit empty because the owner was sitting on it waiting for the big payout. It became such a political hot potatoe, he finally sold it. Detroit has so many interesting buildings to preserve...good luck.

Aug 7, 2007, 3:24 PM
Same thing with Minneapolis. A large portion of the north side of dt was demolishen for "urban renewal". It did have some positive effects but we lost too many grand buildings because of it.
If a city really want these properties, then they have to condemn these sites. If they are in the type of shape that we are hearing, then that should be simple enough.

Aug 7, 2007, 4:12 PM
It should be noted that most of these buildings are rumored to be renovated.

Quicken Loans/Rock Financial which is currently headquartered in the Detroit suburbs is rumored to move downtown on the vacant Statler Site. Many people who have been following the story feel that Dan Gilbert (the owner) is looking to create a big impact downtown with not only building what could be the city's new "tallest" but also the renovation of the neighborhing UA Building and Whitney Building. It is also believed that it will coincide with the announcement of a new Red Wings arena just a few blocks away. And the developers of the Broderick which is also in the general area is working hard to convert the abandoned structure into condos.

If all works out, and the Broderick, Whitney, and UA Building get renovated in the next three years or so, and the Book-Cadillac and Pick-Fort Shelby already under renovation, most of Downtown's dinosaurs will be renovated. The only really notable abandoned building that's future is uncertain is the Lafayette Building which is across the street from the Book-Cadillac. A few years ago, a developer was hoping to convert the building into residential units, but so far those plans have fallen through.

Aug 7, 2007, 5:55 PM
It should be also be noted that the vacant buildings downtown have been slowly disappering not to demolition, but renovation. Right now the grandest and largest of them the Book-Cadillac Hotel has been under renovation for close to a year and another the Fort Shelby Hotel for a couple months. So overall these building have bright futures.

The area in article is centered around Grand Circus Park on downtown's northern edge, has contained the bulk of downtown vacant skyscarpers. A lot of the smaller buildings in the area have been renovated. But there are 3 skyscrapers still awaiting renovation I like a lot Detroit am crossing the Quicken relocates becuase should kickstart these projects.

Aug 7, 2007, 11:06 PM
Detroit seems to be about 5 years behind St. Louis in terms of downtown rehabs. I remember when downtown St. Louis was plagued with boarded up buildings. Today, there are almost no buildings, large or small that isn't rehabbed or about to be. I have confindence that Detroit will "Quicken" the pace in the next year or so.