Detroit Development News

[Lmichigan]

After much delay, it seems things are happening downtown, again, and that Gilbert is single handedly driving most of the new interest. I hope that other area business leaders are taking note and choose to join him in recentering the region.

[deepdive282]

Dan Gilbert hopes Madison project will change downtown Detroit

To get a good idea how Quicken Loans founder and chairman Dan Gilbert hopes to change downtown Detroit, take a look at the progress on his Madison Theatre Building.

Gilbert bought the small, five-story structure near Broadway and Grand Circus Park and has workers transforming it into a hub for high-tech entrepreneurial activity.

The building is to open in late fall.

There'll be a co-working floor that Gilbert plans to offer for free to entrepreneurs -- sort of a desk-for-a-day environment for techies. And there'll be a 150-seat theater where Gilbert hopes to host all sorts of technology events, from critiques of new software and hardware to brainstorming sessions for digital types.

It's all part of transforming downtown into what Gilbert calls Detroit 2.0 -- a city rich with high-tech entrepreneurial activity and a bustling new economy.

"We're just really trying to highlight the city and bring folks from the suburbs downtown," Dan Mullen, Gilbert's point man for the Madison project, said last week during a tour of the work in progress.

He added, "We want you to live here, work here and play here."

Quicken Loans chief Dan Gilbert works to create a tech hub in downtown Detroit

When Quicken Loans founder and Chairman Dan Gilbert moved his company's headquarters to downtown Detroit last year with 1,700 employees, the move added to a cluster of computer-related firms developing along what Gilbert likes to call "Webward Avenue."

The cluster of high-tech firms took shape when Compuware moved its headquarters downtown from the suburbs in 2003. Quicken Loans' arrival added to it, and a New Jersey-based technology firm called GalaxE Solutions has been adding employees to its location in the 1001 Woodward Building.

Gilbert would like to attract a lot more high-tech firms and employees downtown, gradually changing downtown's traditional focus on law, banking and government to emerging technologies, or what he calls Detroit 2.0.

At the Gilbert-owned Madison Theatre Building, now being remade into a high-tech entrepreneurial hub, Gilbert's venture capital firm, Detroit Venture Partners, will have a floor. So will Skidmore Studio, a graphic design firm moving in from the suburbs.

When Gilbert announced Skidmore's pending move a few weeks ago, he called it "just one more piece of evidence that the Detroit 2.0 movement is continuing to gain momentum as brain-economy businesses rush to Detroit."

The Madison, to be finished this fall, is just one of several Gilbert projects under way downtown. Gilbert and his partners have purchased the Chase Building and the First National Building, and real estate insiders say he continues to look for more buildings.

George Jackson, president of the Detroit Economic Growth Corp., who helped negotiate Gilbert's move from the suburbs, applauded the emphasis on creating a digital-technology hub downtown.

"I think it makes us more attractive to professionals thinking of moving to Detroit when they have something like this," Jackson said Monday.

In recent days, construction crews were busy turning the five-story Madison building into Gilbert's vision. The planned décor might be called "industrial chic," Dan Mullen, Gilbert's point man for the project, said last week during a hard-hat tour.

"A lot of the look and feel will stay industrial," Mullen said. "So you're going to see these exposed steel beams, clay tile ceilings, polished concrete floors." A key space will be a 150-seat theater on the fifth floor, where Gilbert wants to host high-tech conferences and events.

"We want to do as many cool, creative events as we possibly can on that fifth floor to bring folks down to the city," Mullen said.

Several firms are involved in the re-creation of the Madison building. They include Southfield-based Neumann/Smith Architecture, the Birmingham contractor firm Sachse and local developer Bedrock that will handle management and leasing. Doodle Home, an interior design firm run by Gilbert's wife, Jennifer Gilbert, is working on interiors.

http://www.freep.com/article/2011062...wntown-Detroit

[Lmichigan]

Looks like Whole Foods is still very seriously looking at setting up shop in Detroit.

Whole Foods continues discussion on possible Detroit store at meeting

By Louis Aguilar | The Detroit News

June 24, 2011

Detroit — Whole Foods Market today is holding its second community meeting about possibly opening a store in the city.

While the organic and natural foods grocery company has emphasized that it has not made a decision about whether to open a store here, one of its representatives today went to great lengths to talk about the merits and philsophy of the upscale chain. The company is emphasizing that its stores create jobs with benefits, use local foods and reach out to the community.

...

The meeting is taking place at a community center called Friends of Detroit in Midtown. Meeting with 35 residents.

Elk Banks emphasized that a final decision hasn't been made, but often couched his comments with specific details about what a Detroit store could look like.

He described any conversations among company officials about placing a store in Detroit as "discussions in our minds." When asked about the potential size of a store in the city, Elk Banks said discussions among officials often ranged from 18,000 to 25,000 square feet.

"You are not going to see a Taj Mahal, a store of 60,000 to 80,000 square feet," he said, adding that Whole Fods is a public company and is not legally allowed to disclose where a store will be located until its quarterly earnings report.

...

Sounds to me that they may have already decided, butare legally bound about what they can say. Let's hope.

In other news, Michigan is trying to lure the headquarters of Sears from Chicagoland. Two buildings being considered at Regents Court in Dearborn and the old BC/BS Building in Southfield just recently vacated as BC/BS is moving those employees to downtown Detroit.

[hudkina]

Sears and Kmart are in a lot of trouble. Who knows if they'll even be around to make a move. It would be funny to see the company move back into the old headquarters in Troy.

As for Whole Foods if they do build in the city, I think they will probably set up shop at the corner of Warren and Woodward. It seems the most logical place as it is near the Wayne State campus as well as a future lightrail stop. I know that Wayne State has been wanting to build a hotel and conference center at the corner, so maybe they can incorporate the Whole Foods into the ground floor retail.

[Paddington]

I think Sears is a decent store. I still go to Sears.

K-Mart is terrible. I went to a K-mart superstore on John R and 12 Mile yesterday (trying to find a copy of Duke Nukem Forever for the PC, which is sold out everywhere in Detroit) and I felt like I had gone back in time 20 years. The layouts, lighting, fixtures, etc. all seemed so outdated compared to Target/Walmart/Meijer.

[Lmichigan]

K-Mart has been crap for years. I was shocked that Sears didn't fold them when they bought them. The one closest to me has a huge parking lot that's probably not even a third the way filled during its busiest times, they've been down to literally two lines and the return counter with all of the others basically used for storage...the entire experience there is just plain depressing; makes you feel sorry for the workers who you can tell have low morale. It's one of those businesses you'd rather see put out of its misery.

[hudkina]

Actually it was Kmart that bought Sears. They just changed their name to Sears Holding and consolidated into the Sears HQ.

Originally Posted by Paddington

I think Sears is a decent store. I still go to Sears.

Wait... what? Mr. Mercedes-Benz C-Class in McMansionville shops at Sears? Even I don't shop there... LOL

BTW, Kmart is a disgusting mess. I have absolutely no idea how that store stays in business. Even the Super Kmart in Southgate that was probably only built about 10-15 years ago to compete against the much older Meijer across the street is a shithole. There's an intersection in Woodhaven with a Target, Walmart, Meijer, and Kmart all on each corner. The Target, Walmart, and Meijer always have at least a couple hundred cars in their parking lots. The Kmart usually has maybe a dozen or two. I wouldn't doubt half of those are employees. When I walk into a Target or Meijer (I don't shop at Walmart) the floors are usually sparkling clean. When I walk into a Kmart the floors look like they haven been cleaned in months and there's always a unsettling odor. BTW, how poor are you when you can't afford anything that Kmart sells. Seriously... If you have to put a $149 plastic patio set on layaway, you probably shouldn't be buying it in the first place.

[TampaMike]

Have to agree with this Kmart hate. They do nothing to re-image their selves and their stores. The Kmart in my town looks pretty much what the Kmart in Winona, Minnesota looked like in 1995. Like Paddington said, they're outdated.

[hudkina]

Meijer to sign lease for Detroit store

The grocery superstore chain Meijer is expected to sign a lease by mid-July for a new Detroit store at Woodward and 8 Mile Road, project developers said today.

...

source: http://www.freep.com/article/2011062...-Detroit-store

Sounds like this is almost certainly going to be built.

[Lmichigan]

Finally. Getting them to sign was like pulling teeth, though, I understand their concerns.

[Paddington]

That lot is a huge unoccupied expanse that has busy retail and lots of car traffic on either side of it along 8 Mile.

I'm living in Ferndale and the amount of retail here is very limited compared to what I had in Dearborn. I find myself going to 14 Mile Road in Troy frequently to buy stuff. I really liked the retail in Dearborn; it was very convenient living near the Ford building.

[hudkina]

That's why this Meijer should help attract people from Ferndale and Hazel Park along with Detroit. Meijer usually does a good job of maintaining their stores, so as long as this area doesn't "get ghetto quick" it should be a decent alternative to driving further out into the suburbs.

[Lmichigan]

Originally Posted by hudkina

...so as long as this area doesn't "get ghetto quick" it should be a decent alternative to driving further out into the suburbs.

It be kind of hard for it to do that since it's already that, unless you meant the when the mall is opened. Actually, the State Fair neighborhood is one of the fastest depopulating places in the entire metro, so it's not even that it's really that bad of an area, it's simply that there really isn't anything there there, anymore.

As for the new mall, I'm not worried about it chances so long as its well lit and the developer hires the right management for the place. I mean, at the end of the day, this will bring in residents from all around. It'll finally be able to capture some of the wealth in Palmer Park & Woods, Sherwood Forest, University District, etc...that has otherwise been forced to shop outside of the city.

[hudkina]

I meant the strip mall itself. If people feel unsafe in the parking lot (or even the store itself) they'll flee, particularly those coming from the other side of 8 Mile. Granted, I think the store will do very well even if people aren't coming from the suburbs. There is still a lot of wealth in Northwest Detroit as well as the Greater Downtown area that would easily flow into that store. The people who are making the Home Depot on 7 Mile one of the most profitable in the region will likely do the same to the Meijer.

[Mudhen419]

http://www.clickondetroit.com/news/28397611/detail.html

Detroit's Light Rail Project Moving Forward
Mayor Says Engineering Work Has Begun On Light Rail System

[Jaybird]

^ I am so glad they came to a decision on how the light rail will be constructed and it's a good way to do it, have the trains go up the middle from 8 mile to Grand Circus Park and then off to the sides from Grand Circus Park to the Rosa Parks Transit Center.

Now, they just have to get that $300 million grant from USDOT Sept. 1.

[diablo234]

Thought you guys would get a kick out of this. Some actually positive coverage in the media for once regarding Detroit's revitalization.

NY Times - Detroit Pushes Back With Young Muscles

[hybridy]

Somerset comes to Woodward CityLoft

The Somerset Collection in Troy, the most upscale mall in the state and one of the toniest in the nation, will bring mini versions of several of its stores -- including Neiman Marcus, Michael Kors, Saks Fifth Avenue, Coach, Lego, the Gap and a Häagen-Dazs ice cream cart -- to downtown Detroit later this month.



http://www.freep.com/article/2011070...dward-CityLoft

[Jaybird]

http://www.crainsdetroit.com/article...up-sees-ddots#

Oh man, another road block for the proposed light rail system:

An unhappy M1 Rail puts project funds on the line: Group sees DDOT's plan as unsustainable

By Bill Shea

THE FUNDING TRAIN
The local money Here's how the federally required $210 million local funding match for the $528 million Woodward rail project breaks down:

The proposed Woodward Avenue light rail project is in jeopardy.

The private consortium of investors that has pledged $100 million toward the project's $528 million cost doesn't have faith in the Detroit Department of Transportation's plan and won't provide funding until it does, sources familiar with the situation told Crain's.

The group of prominent Detroit businessmen and organizations, M1 Rail, doesn't think the nine-mile-long, streetcar-style rail line between the city limit at Eight Mile Road and downtown, as proposed, is the best use of the funding, is financially sustainable or is the best layout and alignment.

The city's plan also fails to tie the line into any future regional mass transit systems, sources say, and that has M1 balking at financial assistance.

The $100 million is crucial because it's part of the $210 million in required local match money needed by DDOT to leverage funding under the Federal Transit Administration's New Starts program, which is aimed at partially funding qualified local transit projects such as rail. Washington would pay $318 million of the cost if the project's New Starts application -- expected this summer -- is approved.

Without the M1 money, the project could be doomed because the city doesn't have backup funding to replace any lost private money. The city is generating its share of matching money through the sale of bonds and state and federal grants. (See "The Funding Train," right, on this page.)

The city has not been told that money will be withheld, said Bob Berg, partner and vice president at Detroit-based Berg Muirhead and Associates and a spokesman for the city on the rail project.

"There's been a good-faith effort to accommodate all the interested parties, including M1 and the public," he said.

The city doesn't have an alternate local match plan because it has no reason to believe M1 won't provide its $100 million, he said.

"You're always going to have bumps along the road. That doesn't necessarily stop you," Berg said. "This always has been a fairly complex situation. The city has been trying to keep everyone in the loop all along."

DDOT must have the funding sorted out by the fall, when preliminary engineering begins.

Deafening silence

M1 Rail has been conspicuously quiet since Mayor Dave Bing announced June 29 that the city had committed to a particular route and mixed center-running and curbside alignment for the streetcar-style system -- plans that irritated some of the private backers who preferred different options, insiders have said.

M1 Rail's members don't want to fund a project they believe will fail -- the fear is being linked to a little-used system belittled as "People Mover 2" -- but they also don't want to be viewed as the ones who killed light rail, insiders say.

One member, however, has broken his silence.

Rip Rapson, CEO of the Troy-based Kresge Foundation that has pledged $35 million toward the rail effort as part of M1, told The Wall Street Journal in a story on July 2 that the organization was reconsidering its financial commitment -- something that it can use as leverage in talks with the city.

"Are we going to pull our money out? We won't just because we're annoyed," he told the newspaper. "Everyone knows that Kresge is the do or die for the line."

The heart of the dispute is less annoyance than disagreement with the city's plan, however.

Rapson was out of town Thursday and Friday and unavailable for comment, but a foundation spokeswoman tried to soften the tone of the newspaper story.

"We really expect that the issues will be resolved," said Judy McGovern, Kresge's associate director of communication. "There are fresh conversations going on to this all the time."

She said the $3.1 billion foundation already has paid $14 million of the $35 million so far, and expects to fund more this year.

Other members of the M1 coalition have declined to comment or have not returned messages.

Matt Cullen, M1's CEO, would volunteer only a blanket statement.

"M1's board and stakeholders remain very supportive of Mayor Bing and very supportive of robust, sustainable transit projects for Detroit and the region," he said.

Cullen previously has said the group won't fund a project with which it disagrees. And those close to the situation have said M1 doesn't view DDOT's proposal as a "robust, sustainable transit project."

Sustainability, insiders say, is one of the key stumbling blocks. M1 doesn't believe the city's plan to cover the line's annual operating expenses is viable and that the line is of only limited value if it isn't part of a regional system.

Norm White, the city's CFO and lead on the rail project, previously has said the Woodward line is being built with the hope it will spark other communities to pay to extend it into the suburbs and become part of a regional system.

A $10 billion proposal to deploy a system of bus and rail lines throughout Wayne, Oakland and Macomb counties over 25 years, with M1 rail as its spine, was approved by political executives in December 2008 -- but has been put aside since then.

The author of the regional plan and the man who organized the private investor group, John Hertel, declined to say anything other than it would "be a shame" if the rail line wasn't built at least from Hart Plaza to New Center -- the original plan proposed by M1 three years ago.

He left his role as regional transit czar to head the SMART bus system, and the Woodward project transitioned from M1 to DDOT in 2009.

The Woodward alignment and route were agreed upon by Bing and the FTA, a pact announced June 29. The agreement is via the project's final environmental impact statement, which spells out the specifics of what will be built and where.

M1 and DDOT negotiated for months on the alignment. M1 wanted more curbside service, especially through Midtown. But that's not part of the plan, which fed into M1 Rail members' irritation.

The city has said the layout and median-curbside alignment chosen was the best option and one driven by federal guidelines.

Big names, big money

M1 Rail assembled its $100 million in commitments largely from foundation gifts, federal tax credits and pledges to buy the advertising rights for the line's stops.

The organization's major individual donors are deep-pocketed, powerful Detroit advocates with downtown business commitments: Penske Corp. founder Roger Penske, who is chairman of the project; Peter Karmanos Jr., founder of Detroit-based Compuware Corp.; Mike Ilitch, owner of the Detroit Tigers and Detroit Red Wings and co-founder of Little Caesar Enterprises Inc.; and Quicken Loans/Rock Financial founder Dan Gilbert, the project's co-chairman.

Those four have committed $3 million each for the display advertising rights to a station along the route. Henry Ford Hospital and Wayne State University also have committed $3 million each for a station.

Four other donors withdrew informal $3 million station commitments. Cullen declined to name them and said he believes they can be persuaded to recommit when there is a final design.

Also pledging funds to M1 is Detroit's quasi-public Downtown Development Authority ($9 million).

The final portion of the $100 million wasn't cash but $20 million from the U.S. Treasury Department's New Market Tax Credit program, which annually awards credits against federal income taxes for qualified organizations that invest in low-income communities.

The credits are for a year and must be reapplied for if they aren't used. M1 qualified for the credits twice but isn't applying again until plans are in place, Cullen said.

The uncertainty over the rail money has transit insiders worried.

Marie Donigan, a former Royal Oak state representative who does private-sector transit advocacy and consulting, said the loss of M1 Rail funding would be "devastating."

She also said that since the project was taken over by the city -- M1 Rail originally intended to build a smaller line on its own, but stepped aside for DDOT's bigger project -- the private backers haven't been deployed properly to advocate for the effort.

"Instead of being asked to champion the project, they're being asked to pay for it. It's kind of a sad role for them," she said.

Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19

[Jaybird]

It also sounds like Detroit city council can't agree on an authority to oversee construction of the light rail project either...

http://www.google.ca/url?sa=t&source...doD75BopUcb4UA