Detroit —Bedrock, Dan Gilbert’s Detroit-based commercial real estate development and investment firm, has unveiled a package of four developments totaling $2.1 billion in new investment that will add to Detroit’s skyline.
Totaling 3.2 million square feet, Bedrock expects to create both construction and permanent jobs totaling up to 24,000.
“Detroit is going vertical,” says Gilbert, who also owns the Cleveland Cavaliers of the National Basketball Association. “In fact, that is the only way to create any type of significant expansion in the city because we are virtually at full occupancy for residential and commercial space in both downtown and midtown.”
Gilbert adds that “transformational” projects like these are necessary to both accommodate the expansion of current downtown businesses and make Detroit a legitimate competitor for new businesses and massive opportunities, including Amazon’s HQ2.
Gilbert, Detroit Mayor Mike Duggan and other elected officials and community members gathered at the historic Book Tower to unveil the following projects:
- The Hudson’s Site — The approximately $900 million, 1 million square-foot redevelopment of the old Hudson’s site will include the tallest tower in Detroit. Crain’s Detroit Business reports that the building will rise 80 stories, which would top the 73-story Detroit Marriott at the Renaissance Center. The tower will feature a publicly accessible sky deck on top of the residential floors. It will also include restaurant, retail and office space, as well as exhibit and public space that will be open to all.
- Monroe Blocks — The $830 million transformation of the Monroe Blocks between the Greektown district and Campus Martius Park will deliver a 35-story, 814,000 square-foot office tower to attract companies and jobs to Detroit, as well as 482 residential units, restaurants and retail space and three public plazas.
- Book Tower — The $313 million rehabilitation of the Book Building and Tower will be one of the most significant historic rehabilitation projects ever undertaken in Detroit. The project will feature a combination of 95 residential units, 180,000 square feet of retail and office space and a planned hotel.
- One Campus Martius — The $95 million expansion of the One Campus Martius site will provide 310,000 square feet of office space.
“The economic impact this project will have on our city is larger than anything we’ve seen in generations,” says Duggan. “Not only will it produce thousands of new jobs and opportunities for Detroiters, it will reshape the city’s skyline and attract even more reinvestment in Detroit.”
The package will now go before the Detroit Brownfield Redevelopment Authority (DBRA) as the first step toward the approval of new state financing under the MIthrive program enacted into law earlier this year.
The State of Michigan, specifically the Michigan Strategic Fund, is ultimately responsible for approving all proposals applying for the MIthrive tool.
Bedrock will invest equity and secure potential outside debt totaling $1.9 billion (or 88 percent of the project costs) while securing approximately $250 million in bond funding (or 12 percent of the total cost) through the MIthrive program. If approved, Detroit will be the first city to put this new state financing tool to work.
“One of the Senate’s top priorities is to pass legislation that supports an economic environment ripe for growth and investment,” said Michigan Senate Majority Leader Arlan Meekhof. “Today’s announcement is evidence of the need for Michigan to continue to pursue policies that best position our state to compete for economic investment.”
MIthrive builds on the existing local Brownfield Tax Increment Financing (TIF) program by providing additional state support and allowing these projects to keep a portion of the new state tax revenue they generate to help close the gap between high redevelopment costs and what market rents can support.
MIthrive allows the projects to retain state sales and state income taxes from the construction activities on-site, as well as up to 50 percent of the state income taxes generated from new jobs and residents within the completed developments.
As part of the DBRA process, Bedrock will take the development plans before the DBRA’s Citizens Advisory Council. In addition, the City of Detroit and Bedrock are currently collaborating to allow residents in close proximity to the construction sites to have a direct voice in the development process.
Since its founding in 2011, Bedrock and its affiliates have invested more than $5.6 billion in acquiring and developing more than 100 properties in downtown Detroit and Cleveland totaling more than 16 million square feet. Bedrock’s real estate portfolio consists of more than 330 office and retail tenants in downtown Detroit.
The DBRA was established pursuant to Michigan Public Act 381 of 1996, under which properties that are located in Detroit and qualify as contaminated, blighted or functionally obsolete (and are part of an approved Brownfield plan) may be eligible for TIF reimbursement for both environmental and non-environmental activities.
— John Nelson