[airforceguy]

RenCen redevelopment gets first public money — and is now on the clock

The Downtown Development Authority board unanimously signed off on a total of up to $75 million in reimbursements to Bedrock LLC and General Motors Co. for several pieces of the $1.6 billion or so project first floated a year ago this month. It’s a small piece of what’s expected to be a much broader public financing package; the project’s backers have said it would not happen without lawmakers raising the cap on the Transformational Brownfield Program, a reimbursement incentive that largely comes from the state.

Lawmakers are still in conversations about how and whether to accomplish that. The program's $1.6 billion cap on post-construction tax captures is almost entirely spoken for, with $30 million or so remaining, Crain's reported last month. The $75 million consists of two tranches: $20 million that the DDA would reimburse for demolition of the RenCen’s 1.5 million-square-foot retail podium; and another $55 million the DDA would reimburse for the creation of public plazas on Jefferson Avenue and Atwater Street, creating new roads running through the site, as well as pedestrian paths and promenades.

The reimbursements would come every six months after demolition and construction costs, according to staff for the Detroit Economic Growth Corp., which staffs the DDA, during Wednesday’s meeting.

Jared Fleisher, president of Dan Gilbert’s Bedrock, said demolition of the podium is expected to cost a little more than $20 million, and the $55 million would reimburse only a portion of the roughly $137 million needed for the civic spaces project.

The RenCen proposal includes the demolition of the 300 and 400 office towers that sit closest to the Detroit River, freeing up some five acres of land for new park space along the water.

In addition, the 727-foot Marriott hotel tower — the state’s tallest building — would have its approximately 1,300 hotel rooms reduced to 858 rooms, with approximately 200 rental units on the top 20 floors replacing the lost rooms. There would also be an observation deck.

The 100 Tower would be turned into 384 units of housing, while the 200 Tower would be renovated as modern office space.

The DDA funding is contingent upon approval of a transformational brownfield plan by March 31, 2027, by the Detroit City Council and the Michigan Strategic Fund. In addition, the funding would not be awarded if there are more than 18 months of delays from the anticipated June 30, 2027, start of the podium demolition and the anticipated June 30, 2028, start of the public space improvements, according to a DDA board memo. The reimbursements would take place between 2027 and 2033.

None of the $20 million in demolition funding would go toward tearing down the 300 and 400 towers, executives said. Each tower could cost north of $50 million to raze.

In addition to the redevelopment of the RenCen itself, the broader vision includes converting the 20-some acres of largely surface parking lots east of the complex into a new waterfront athletic and entertainment district likened to New York City’s Chelsea Pier and Chicago’s Navy Pier.

https://www.crainsdetroit.com/real-estate/rencen-bedrock-general-motors-public-funding-approval