Hey everyone,

We’ve been wondering whether there’s been any progress on redeveloping the massive Herman Kiefer hospital complex. It’s a bit of a mixed bag.

On the plus side, renovations of nearby homes are proceeding. If you want to see developer Ron Castellano rehab one of the houses, he will soon guest-star on the home improvement show “In With The Old.” On the other hand, it might be another few years before he redevelops the sprawling Kiefer complex. 

Elsewhere, demolition of a historic building in Eastern Market is expected to start any day. Construction has started and plans were announced for several developments in the past week as well. 

As always, thanks for reading.

The Dirt

>>Historic to demolished: The wall of a historic building on Russell Street in Eastern Market partially collapsed Saturday. The incident took place during a busy market day, injuring one person and damaging vehicles. Known as the Del Bene building, it was home to several businesses including a Beyond Juicery + Eatery and Brooklyn Outdoor. The owner of Jabs Gym, another tenant, said he informed landlord Scot Turnbull that bricks had begun to separate, but Turnbull said he had not heard any complaints. It only took a few hours for the city to issue an emergency demolition order for the building, which is 126 years old. Demolition could begin within days. The president of Preservation Detroit said he doesn’t see signs of an imminent collapse and that the city is rushing to demolish. (BridgeDetroit, Metro Times)

>>Another Ilitch extension: Olympia Development of Michigan got a lengthy extension from the Downtown Development Authority last week to submit development plans for more than a dozen parcels around Little Caesars Arena. The properties were transferred to the company owned by the Ilitch family as part of a 2014 development agreement for the arena. Olympia now has to contribute $100,000 toward a planning study of the area, expected to kick off next year. The company must submit a development proposal no later than Sept. 13, 2030. In other words, we won’t see anything done with these parcels for a long time. (Crain’s Detroit Business) 

>>Development news roundup: Detroit City Council codified rules around affordable housing for developments that get tax incentives, grants or discounted property. Now, any development with 20 or more residential units that receives these subsidies has to set aside 20% of the units for those making 80% or less of the area median income (AMI)… Century Partners is planning a $9 million redevelopment of an abandoned apartment building in Piety Hill. The firm that was once part of the Fitzgerald Revitalization Project will rent all 42 units to households that make 50%-80% of AMI… Construction began on a $14 million mixed-use development in Midtown. Developer Greatwater Opportunity Capital will set aside about 20% of the units — all studios or one-bedroom apartments — for those making 80% or less of AMI… Construction has also begun on a 1.6-mile section of the Joe Louis Greenway running through Highland Park along a ​​former Conrail railroad track. The $20 million stretch is being paid for with Wayne County’s American Rescue Plan Act allotment. (Crain’s, Freep, Outlier Media, Detroit News, Urbanize Detroit)

>>Wall Street’s home buying spree: Over the last couple years, investors across the U.S. have elbowed out first-time homebuyers in mostly middle-class neighborhoods by paying for homes with cash. Investors made nearly 10% of all home purchases last year, and that number was around 20% in fast-growing cities like Atlanta and Charlotte, North Carolina. The result? Many of those neighborhoods have become majority renter. And many who would have bought a home have instead turned to renting, locking younger households out of a traditional route to wealth-building. (New York Times)

Flyer: “Not voting in the next election? Could you not care less about elections and how they work? We want to support you. Join Outlier Media for a conversation fit for adults living in Detroit who don’t plan to vote in the next election because they don’t want to, are ineligible or are facing other barriers. We’re not trying to persuade you to vote. We’re simply interested in learning what your concerns are because we know they are often overlooked or dismissed. At 6 p.m. on September 28, 2023 at TechTown, 440 Burroughs St., Detroit, 48202.” One photo shows three people standing in a circle, happily engaging in conversation and another has three seated panelists talking to a crowd.

Dig Deeper

Owner of long-vacant hospital complex gets positive coverage

An upcoming episode of the Max show “In With The Old” will be about redeveloping a home near the old Herman Kiefer hospital complex. The show highlights people across the country trying to rebuild abandoned and historic structures.

The episode in Detroit is expected to feature Darius Smith and his attempts to rebuild his grandmother’s home in Virginia Park. Smith, a business partner of Herman Kiefer developer Ron Castellano, grew up in Detroit but now resides in Ann Arbor. 

The show should provide positive attention to a project that’s received little of it. Castellano inked a deal with the city in 2015 to buy the massive hospital complex and 115 homes from the Detroit Land Bank Authority. He barely made a deadline two years ago to complete 15 home rehabs and says he is on track to meet the next deadline of 20 more rehabs by Nov. 30. Nearby residents have long complained about the deal, saying it locked out Detroiters from the opportunity to buy homes. His willingness to work with community groups may have eased some of the tension. 

Meanwhile, Castellano still has no tenants or redevelopment plans for Herman Kiefer’s 11 buildings. He has until February 2029 to invest $75 million or have 80% of the property activated. If not, he risks losing it altogether.

Coming Down

One-of-a-kind place to get the wrecking ball

Dark brown office building with three stories and tall windows. The facade has towers that are a little taller than the rest of the building, which has a modernist, rectangular design. It’s surrounded by trees without leaves and a driveway covered in debris.
Kmart’s former headquarters, photographed in 2017. Photo credit: “Kmart HQ Troy, MI 1” by Mike Kalasnik, licensed under CC BY-SA 2.0 Credit: Photo credit: “Kmart HQ Troy, MI 1” by Mike Kalasnik, licensed under CC BY-SA 2.0

The former Kmart headquarters in Troy is getting demolished in the coming weeks. The retailer left in 2006, and the current owner hadn’t been able to find a suitable use for the massive complex. 

Nicknamed “Fort Kresge,” the building has a truly unique design with modular office structures connected by octagonal towers. When it opened in 1972, it was around 600,000 square feet but reached a maximum size of more than 900,000 square feet in the 1990s. Detroit architecture firm Smith, Hinchman & Grylls (now SmithGroup) won  awards for its design, including one from the American Institute of Architects. The building was quite impressive inside, too, containing a stunning art collection with works by Pablo Picasso, Andy Warhol and Paul Klee. 

The demolition is expected to take nine months to a year. No redevelopment plans for the site have been made public yet.

Aaron (he/him) believes in telling true stories about real people. He doesn’t think there’s anything better than a crisp fall afternoon at the Detroit Jazz Fest.