Hey everyone,
Those who were upset about the failed promises of the Ilitch family and skeptical of The District Detroit might now have the right to say, “I told you so.”
Olympia Development of Michigan and The Related Companies announced the project would be delayed until at least 2025. It was supposed to start in fall of last year. The developers haven’t even bought the necessary land to start building, and the troubled state of Detroit’s office market is having an effect. In other words, a lot is still up in the air.
That project and others this week actually left us asking a lot of questions. How is Wayne County going to pay for $100 million in additional costs for its new jail? Why did Michigan spend hundreds of millions to create mostly low-paying jobs? Does it really cost almost $4.3 million to commission a study related to I-75? Lastly, what will happen to a neat-but-obsolete warehouse on the eastside?
More to chew on this week in The Dig.
The Dirt
A “resequencing” of events: District Detroit developers announced last week that construction is at least a year and a half behind on their $1.5 billion project downtown. The project was supposed to start last fall but won’t until sometime next year. Executives with Olympia Development and Related Companies said they struggled to secure financing for the project’s office buildings. Land needed for what was supposed to be District Detroit’s first office building at 2200 Woodward Ave. is still owned by the Detroit/Wayne County Stadium Authority; the two parties have not agreed on a sale price. The developers insist the delay doesn’t mean trouble. Instead, they say there is demand for their project’s office space and that an unnamed “anchor tenant” has committed to leasing the majority of 2200 Woodward Ave. Vacancy rates remain high at other downtown offices. The developers now plan to change the order of buildings to break ground, starting in 2025 with a residential tower on Cass Avenue, followed by one of two proposed hotels. All 10 developments that comprise District Detroit must be completed to get all the nearly $800 million in public incentives that the state and city already approved for the project. (BridgeDetroit, Outlier Media)
Spend money to not make money: Michigan shelled out $335 million in corporate incentives last year, mostly for the construction of new manufacturing facilities. Gov. Gretchen Whitmer promised “good-paying, high-skills jobs” in return for the investment. The 83 companies that got incentives last year said they would create 11,408 jobs. But around 40% of those jobs pay less than Michigan’s median wage of $45,510, according to an analysis by Bridge Michigan. Officials for the state argued that the pay for these jobs often exceeds the median incomes of the Michigan regions where those jobs are located. They also emphasized that the state considers factors beyond wages when approving incentives. (Bridge Michigan)
Put a cap on it: The U.S. Department of Transportation and District Detroit’s developers have given the Downtown Detroit Partnership (DDP) a total of close to $4.3 million to study building a “cap” over I-75 downtown (paywalled). (That’s a nice chunk of change for whichever consulting firm wins the contract!) Covering the freeway would allow the construction of green space while freeway traffic continues to pass underneath. The DDP hasn’t provided any estimates for how much of the freeway would be capped or how much it would cost, but a 5.2-acre park built on a freeway cap in Dallas cost $110 million when it opened in 2012. The proposal comes amid a nationwide conversation about correcting freeway mistakes that split apart neighborhoods, including a highly contentious debate over I-375. (Crain’s Detroit Business, Detroit Free Press, Outlier)
Regression to the mean: Property taxes for Detroit’s poorest homeowners continue to be overassessed, according to an analysis by researchers at the University of Chicago. The researchers found that, on average, the city overassessed properties at the bottom end of the market. This continues a trend of what the researchers call property tax “regressivity,” even after a citywide reassessment in 2017. This isn’t fair, but it also affects a relatively small group of people. Homes worth this little already have extremely low property taxes, even if they are overassessed. And the study found that the vast majority of homes at all other price brackets are actually underassessed. If you’re worried or just curious about how your home’s assessment stacks up, use Regrid’s Detroit Assessment Gauge. (University of Chicago, Outlier, Regrid)
Boondoggle: The long-delayed Wayne County Criminal Justice Center in Detroit will cost taxpayers almost $100 million more (paywalled) than the county originally estimated. Bedrock Detroit paid for construction cost overruns as part of a deal with the county. But the county spent tens of millions of additional dollars on several items, some of which are real head-scratchers, including building a $34 million DTE Energy plant and paying $27 million to Bedrock for a parking lot. The county didn’t respond to questions from reporters and has not announced the final price tag for the center or how it’s paying for the extra millions of dollars. Construction of the center, which was originally supposed to open two years ago, is nearly complete. The county will have six months to open it once Bedrock hands over the keys. (Detroit News)
Development News Quick-Hitters
Public engagement nonprofit Sidewalk Detroit has commissioned an installation to draw attention to and mitigate pollution from Stellantis’ factory just blocks away. The Detroit Remediation Forest will have trees, air monitors and a sculpture honoring two African queens and the two co-founders of local nonprofit Canfield Consortium. (Metro Times, BridgeDetroit)
The Tigers are spending $30 million renovating Comerica Park ahead of opening day on April 5. The most notable upgrade will be to the big video board in the outfield. Fans said the ballpark was looking run-down this most recent season (to say nothing of the team itself). (Crain’s, Metro Times)
Members of the Detroit Bird Alliance, formerly the Detroit Audubon Society, are concerned about how two glass buildings by the river, built on the former Joe Louis Arena site, will affect migratory birds. Detroit is a crossing point for many birds, and the new hotel and luxury apartment skyscrapers in the so-called Water Square area could be especially deadly to them (paywalled). (Crain’s)
One Good Building
The Marathon Linen Service Co. building has little chance of survival
Want to find out about Detroit’s innumerable but less heralded structures? Look no further than writer and photographer Eric Hergenreder’s blog documenting these kinds of buildings.
Earlier this month, he highlighted one I’d never heard of: the Marathon Linen Service Co. building on East Warren Avenue at Moran Street. Hergenreder told us he chose to feature this building and most others on his site by simply exploring and photographing the city. He does the research later through newspaper archives, the Detroit Public Library’s Burton Historical Collection, Detroit Historical Society records and even Facebook groups.
Lately, his hobby has taken on more urgency because he’s seen more of these older, obsolete buildings getting demolished. “I’ve been trying to stay on top of that to document buildings before they’re gone,” he wrote by email. “That’s been a huge focus for me lately.”
Two Greek immigrant brothers, George and Nicholas Genematas, founded Marathon in 1905. It’s unclear when the brothers built their warehouse, but it wasn’t big enough. They expanded it with multiple additions in the first half of the century.
The tan-brick building is a great example of midsized industrial buildings that sprouted in Detroit in the early part of the 20th century. It has several patterns of brickwork near the roofline, as well as a stone relief that Hergenreder guesses is of Pheidippides, the Greek messenger whose popular myth inspired the marathon race (and the company’s name).
Hergenreder unearthed lots about Marathon’s history, which you can read in his post. The story about a police sting involving extortionists is quite colorful.
Marathon stopped operating at some point in the 2000s, and the building eventually fell into the hands of a scrapyard owner. Hergenreder speculates its ultimate fate will almost certainly be demolition. It’s expensive to redevelop an old industrial site like this one, especially when it’s in a neighborhood that’s not being actively redeveloped.
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