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Wave of Renovations Helping Downtown Detroit


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Jerry and Tomeka McGee recently moved from Atlanta. "We love the character of old buildings and old architecture," he said.



Published: January 30, 2005


THIS city has certainly taken its lumps over the last half century. It has lost more than half its population and remains at or near the bottom of many indices of urban quality of life.

Still, there have been signs of a downtown revival over the last few years, with one of the most remarkable changes being the creation of residential lofts in the blighted central business district. About 440 new residential rental units, many of them in move-in condition, have either been developed over the last two years or are currently under construction in the roughly one-square-mile area. In addition, another 220 units are planned.

Almost all of the projects involve the renovation of long-vacant historic commercial and industrial buildings, many dating from the early 20th century and featuring the kind of heavily ornamented terra-cotta facades and floors with relatively small square footage that are especially attractive to residential developers .

"There's a lot going on right now in terms of businesses relocating downtown and people wanting to live closer to where they work," said Robert Schostak, president of Schostak Brothers & Company of suburban Southfield, Mich. His company is co-developer of Merchants Row, a 155-unit project carved out of five buildings along Woodward Avenue, the city's main north-south thoroughfare. "We're certainly pioneering, there's no doubt about that," he said, but at a time when downtown, although not the entire city, after a long decline, seems to be on the upswing. "For the first time in many years, it's not only feasible but highly desirable to do residential downtown," he added.

Other developers agreed. "There's an awful lot of momentum in the right direction," said W. Robert Bates, senior vice president of Mansur Real Estate Services, an Indianapolis-based company that specializes in downtown historic readaptation projects. Mansur is the developer of the Kales Building Lofts, an 18-story former office building that at one time housed the headquarters of the old S. S. Kresge dime store chain. The 117-unit project is on Adams Street overlooking Grand Circus Park, one of the city's oldest parks, on the north side of the district. "The city is committed to getting these projects done," Mr. Bates said. "I'm very optimistic about Detroit."

The residences being created range in size from about 600 square feet, or a small studio, up to about 2,100 square feet, the equivalent of a three-bedroom apartment. Rents generally are about $600 to about $2,000 per month. The spaces in many cases offer features like 17-foot ceilings, concrete floors, spiral staircases and large windows.

Jerry and Tomeka McGee, who recently moved from Atlanta, took a one-bedroom unit at the Kales Building with expansive views of Grand Circus Park. Mr. McGee is a graphic designer and Mrs. McGee is studying textile design.

"We're urban people," Mr. McGee said. "We love the character of old buildings and old architecture. And the rental properties downtown are not expensive."

Toby White, a lawyer who grew up in the Detroit suburbs and recently moved into a one-bedroom unit at the Lofts at Woodward Center, agrees. "I've always loved downtown and was excited by it," he said. "There's more going on. I like the fact that I can see the city reviving before my eyes," he said, referring to the downtown core.

Last month, city officials opened Campus Martius Park, a new $20 million park in the heart of the central business district that includes an elaborate fountain, an ice skating rink and an Au Bon Pain restaurant.

The park is opposite the new Compuware Building, a 1.1-million-square-foot structure occupied by its namesake corporation that was completed in 2003. Meanwhile, several blocks away, General Motors is finishing a $500 million top-to-bottom renovation of its riverfront Renaissance Center headquarters that includes a new winter garden and an imposing station for the city's People Mover mass transit system.


Older buildings in downtown Detroit, including some on Woodward Avenue, above, are being converted into modern loft apartments.

The improvements are driving the residential loft market by "giving people confidence that downtown is going to be revitalized," said Peter Zeiler, the business development coordinator for the Detroit Economic Growth Corporation, a nonprofit group that acts as a liaison between the city and private developers.

Still, the revival is at an early stage. Almost all of the conversion projects in the central business district are rentals, as opposed to condominiums, because they are being financed in part with national and state historic tax credits, whose rules require that projects must remain rentals for at least five years.

"When you do the math," said David Farbman, president of the Farbman Group, in Southfield, the developer of the Lofts at Woodward Center, a 64-unit project opposite the Merchants Row project that was created out of three older office properties, "it still makes financial sense to use the credits" rather than build condos. Mr. Farbman estimated that the credits provided about 12 percent of the project's $10 million financing.

The city has also stepped in by creating - in partnership with several civic organizations - a $20 million housing fund for the area that provides low-interest loans to developers.

"One of the fundamental building blocks of revitalization is having a residential base to support all the other commercial and retail enterprises that make a city vibrant and active on a 24-hour basis," said David Blaszkiewicz, president of the fund. "Our goal is to create 1,000 new units of housing over the next three to four years."

The tenants moving into these lofts run the gamut from young professionals to empty-nesters. "There's not really a particular demographic," said Lisa Debs, a saleswoman for Detroit Urban Living L.L.C., a development company that has several projects under way just north of the district. "What they all have in common is that they want an authentic urban environment."

Some of the tenants of the new downtown apartments are people who lived in the suburbs because they felt there was no alternative.

"It makes sense for people like me to be down here," said Mason Franklin, an advertising executive who recently moved from the suburbs to a unit at Merchants Row. "I work down here. I don't have kids. I'm 38 years old and I'm not ready to live on autopilot. And when you're downtown, you're not on autopilot."

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I was thinking the same antony! There will be one giant hole in the GC Park skyline when the Statler is gone. I also have to say that I love the view from the Kales looking over GCP! I wonder how sales are going for the Kales now that it is finally open? Any word on the ground floor retail?

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They'll sure have a nice view of the gaping hole left by the Statler demolition. I like how the Book Tower will magically increase in width once the Statler is gone. It looks like Trolley Plaza is coming down along with the Statler. :silly:

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