Lee Plaza hotel to be redeveloped?

**3WC** · November-21-15, 10:01 AM

circumstances it takes a minimum of 10 months to be approved for a HUF loan Good comments, davewindsor.

However, Ferchill had no liability for repaying any of the Book debt. He did have equity in the deal as a result of his developer's interest and he did pledge that interest for a part of the financing. What Ferchill did have was a fairly good development track record.

There is little or no chance Sasser is applying for HUD financing. There are onerous restrictions on who hgets HUD loans, and the developer must have a very substantial net worth [[a percentage of the loan as I recall) and most importantly, an excellent development track record. Also, under the best of circumstances it takes a minimum of 10 months to get approved and usually at least a year. Finally, it would cost a minimum of $1.5 million in legal fees, architectural fees, CPA fees etc to get to the approval stage; it's more expensive when you're rehabbing a building vs building new. Of course, if Sasser has a deep pockets partner it would help and would be absolutely necessary if he doesn't have the required net worth but the big hurdle would be the development record.

HUD only has so much money as authorized by Congress and there is concern that HUD may not be funded sufficiently in the future. Reduced funding would make it much more difficult to get such financing as only the most experienced and financial heavy hitter would get loans.

I am told that it would be impossible to do a Lee Plaza rehab without HUD financing [[and other financing sources as well). Conventional wisdom is there is no way it would be economical to use conventional [[bank/institutional lenders) financing as the numbers could not possibly work.

Why hasn't the City/DEGC made any announcements about this [[have they?) as it's a pretty major development?

**Wheels** · November-21-15, 10:30 AM

Reading this thread has me wondering if now might be the time to invest heavily in real estate in Lasalle Gardens.

**warsaw7** · November-21-15, 10:35 AM

Originally Posted by Wheels

Reading this thread has me wondering if now might be the time to invest heavily in real estate in Lasalle Gardens.

I would say yes. I have a friend who bought a house in the Gardens for a round 130k. She is the third owner and was move in ready when she moved in. Everything about the house is amazing, from the ornate ceilings to the slated roof, this was a steal. If this house, in the condition it is in, was in Boston Edison, it would fetch well over 300k. She definitely was ahead of the curve in terms of an up and coming neighborhood.

It is also worth noting that the neighborhood does have a lot of potential and seems to be on the cusp of being a well desired neighborhood. There is a strong sense of community here along with a neighborhood organization.

**DetroiterOnTheWestCoast** · November-21-15, 01:17 PM

Originally Posted by Wheels

Reading this thread has me wondering if now might be the time to invest heavily in real estate in Lasalle Gardens.

I was wondering the same thing; IF this project were to happen it would be a great help to that area.

I found this tidbit from Crain's to be interesting; maybe there really is something serious going on here:

“He has quite a number of investors on board,” said Kelley Lyons, executive director of the Detroit Housing Commission, which has owned the building since around 1992. Both she and Sasser said the sale of the Lee Plaza building for $258,000 is expected to close next month.

http://www.crainsdetroit.com/article...s-uphill-climb

**Richard** · November-21-15, 04:20 PM

I kinda think this would have,like the others posted,HF in the silent background.

DHC would not allow the sale to go through if it was based on speculation,so they have to provide proof of something.

If the plaza was a marque hotel,and combined housing that covers all income groups,that would make it an ideal situation for their employees and visitors add a little public transportation and a safer neighborhood with added shops etc. if all that is combined that becomes a huge impact for everybody.

New market credits are 39% of the total project,that is the take down of the property,he needs to have ownership first that is why they are talking about private investor providing the bridge loan.

Detroit right now is number one in the country in returns on multifamily residential so it is not surprising that this maybe is just the start.

Somebody posted awhile back as to where is a good place to invest in Detroit,I still think pretty much anywhere,because everywhere outside of the downtown core no matter what it looks like today will not be like that 10 years from now.

**Zacha341** · November-21-15, 10:02 PM

I agree as I live not too far from there. There are wonderful homes remaining in that area, specifically Lasalle. The problem is that Linwood nearby is rough and Ferry Pk running the length of West Grand Blvd street side of LP is very dicey, rough -- and there are many lots with no lighting flanking back south towards McGraw, 14th street and Grandriver that are not developing much. On the other hand there's a HUGE pharmaceutical company/ developer along Rosa Parks [[12th) dead smack in the middle of the blight! Built from the ground up. Anyone know the name??

Originally Posted by warsaw7

I would say yes. I have a friend who bought a house in the Gardens for a round 130k. She is the third owner and was move in ready when she moved in. Everything about the house is amazing, from the ornate ceilings to the slated roof, this was a steal. If this house, in the condition it is in, was in Boston Edison, it would fetch well over 300k. She definitely was ahead of the curve in terms of an up and coming neighborhood.

It is also worth noting that the neighborhood does have a lot of potential and seems to be on the cusp of being a well desired neighborhood. There is a strong sense of community here along with a neighborhood organization.

**warsaw7** · November-22-15, 01:19 AM

Originally Posted by Zacha341

I agree as I live not too far from there. There are wonderful homes remaining in that area, specifically Lasalle. The problem is that Linwood nearby is rough and Ferry Pk running the length of West Grand Blvd street side of LP is on not very dicey, rough also, and there are many lots with no lighting flanking back south towards McGraw, 14th street and Grandriver that are not developing much. On the other hand there's a HUGE pharmaceutical company/ developer along Rosa Parks [[12th) dead smack in the middle of the blight! Built from the ground up. Anyone know the name??

I believe that is Cardinal Health.

**kathy2trips** · November-24-15, 01:40 AM

I prefer to err on the side of optimism. Detroit needs to do what it does best: commerce and industry. Jobs! Jobs! Jobs! Any movement in that direction is a good thing. Don't cross the bummer bridge until you get to it.

**IrishSpartan** · November-25-15, 01:23 AM

Originally Posted by corrybt

Aerial shot of the Lee Plaza hotel and Olympia from the late 50s. It's from a book about Olympia Stadium that says the hotel was where visiting players stayed. What I don't get is why they didn't build a new arena on the empty lots between the hotel and Olympia instead of the current JLA site. They might have been able to salvage the area instead of letting completely fall apart.

If the visiting hockey teams stayed at the Lee Plaza it would have been back in the 1930-1940's era. During the 1950's-1960's the visiting hockey teams stayed downtown at the Leland Hotel. The exception being the Montreal Canadiens who stayed at the Book [[then Sheraton) Cadillac.

**Zacha341** · November-29-15, 11:05 AM

Yes, it's KIRCO/ Cardinal Health... I will post a separate link on that development soon.

Originally Posted by warsaw7

I believe that is Cardinal Health.

**DetroiterOnTheWestCoast** · May-02-16, 05:22 PM

Color me skeptical. But if he's really going to close on 6/1, I hope the project has been vetted.

http://www.freep.com/story/money/bus...sing/83669182/

**ekleezy** · May-02-16, 06:27 PM

I'm just skeptical of the timeline. 18 months from June 1 until doors open. Forest Arms is much smaller and took more than twice that amount of time. I hope they can pull it off that fast, it would be incredible to watch.

**masterblaster** · May-02-16, 07:07 PM

Very ambitious indeed. That area over there is really, really, really rough.

Since there are no plans to extend the QLine down Woodward due to the rapid bus plans, maybe a 2 mile long extension of the streetcar going west along West Grand Boulevard connecting the Henry Ford Hospital, Motown Museum, the Duffield Branch of the Public library, and the Lee Plaza could be explored.

**Zacha341** · May-02-16, 08:28 PM

Article links to this site of interesting photos of the Plaza in it's prime, including one of it during construction:

http://www.historicdetroit.org/galle...za-old-photos/

**Hypestyles** · May-02-16, 09:40 PM

hopefully this redevelopment will happen.

**MikeyinBrooklyn** · May-02-16, 09:57 PM

Originally Posted by Hypestyles

hopefully this redevelopment will happen.

Agreed. The rebuilding of the city will continue to occur as projects jump out, one by one, from the blooming midtown/downtown corridor. Development will then continue as the area between the two fills in. This could be a real transformative project. I wish him and his project well.

**Wheels** · May-03-16, 08:43 AM

The police never stopped anyone from steeling the roof off this place. Why would you think your car will still be there in the morning?

**southen** · May-03-16, 08:47 AM

Originally Posted by Wheels

The police never stopped anyone from steeling the roof off this place. Why would you think your car will still be there in the morning?

I would think if you are creating a 200 unit development that you might employ security and have a gated lot for residents to park in vs. having nobody paying attention to the building at all. Slightly different circumstances.

**Zacha341** · May-03-16, 09:34 AM

The amount estimate seems too low. How has this developer done on other large or similarly scaled projects??

**emu steve** · May-03-16, 10:50 AM

I know nothing about this type of development but wonder if the 'energy company' behind it is doing it as a 'demonstration' project??? [[if there is such a thing. Not something Gilbert would do).

What struck me about the project is that it isn't delineated the way someone would in the downtown with supply/demand studies showing occupancy rates, market rates per sq. foot., etc.

One would be hard pressed to say there is a market for expensive rentals in that area.

As others have posted, it seems to defy typically development, i.e., within or immediately adjacent to a redeveloping area. This is not that. It could take a long time before the New Center area development gets this far west.

They got a building with 'good bones' for almost nothing.

So the cost is essentially renovations.

**casscorridor** · May-03-16, 12:00 PM

Originally Posted by masterblaster

Very ambitious indeed. That area over there is really, really, really rough.

Since there are no plans to extend the QLine down Woodward due to the rapid bus plans, maybe a 2 mile long extension of the streetcar going west along West Grand Boulevard connecting the Henry Ford Hospital, Motown Museum, the Duffield Branch of the Public library, and the Lee Plaza could be explored.

It doesn't matter. Everyone will drive anyway.

**ABetterDetroit** · May-03-16, 12:10 PM

It would truly would be awesome and I hope this all comes together. Questions remain though. Mr. Sasser acknowledges he needs to raise money for securing the building after closing but has a unnamed invester ready to go with 51 million and the project will be completed in 18 months???

**G-DDT** · May-03-16, 02:53 PM

First off, I love how we Michiganders are so over-cautiously removed from guile that we are examining every aspect of this man on this thread [[maybe we should check his "rectal scan" to see if he's "on the level"-this video will better elaborate on thathttps://www.youtube.com/watch?v=DJklHwoYgBQ).

Having a healthy skepticism in the matter is very well warranted, however, I too am going to throw my caution aside for optimism in this project.

So, okay, it's very ambitious, and it takes on a lot of baseless presumptions on the future. However, it is a beautiful building-and yeah, the neighborhood is bad, but it's things like this that give a shot in the arm for the New Center area at large. Maybe folks will see this and, at the least, more and more strip malls [[ugh), maybe even a Meijer's can open around there.

My only gripe is that 2K a month rental price...who this services?....hmmm....yet, to save that building and pump some residential life into that area is a whole heck of a lot better than doing nothing.

**ABetterDetroit** · May-03-16, 06:41 PM

Originally Posted by G-DDT

First off, I love how we Michiganders are so over-cautiously removed from guile that we are examining every aspect of this man on this thread [[maybe we should check his "rectal scan" to see if he's "on the level"-this video will better elaborate on thathttps://www.youtube.com/watch?v=DJklHwoYgBQ).

Having a healthy skepticism in the matter is very well warranted, however, I too am going to throw my caution aside for optimism in this project.

So, okay, it's very ambitious, and it takes on a lot of baseless presumptions on the future. However, it is a beautiful building-and yeah, the neighborhood is bad, but it's things like this that give a shot in the arm for the New Center area at large. Maybe folks will see this and, at the least, more and more strip malls [[ugh), maybe even a Meijer's can open around there.

My only gripe is that 2K a month rental price...who this services?....hmmm....yet, to save that building and pump some residential life into that area is a whole heck of a lot better than doing nothing.

A reasonable expectation for a property like this should be a proper vetting of the finances and the required capital to bring the building up to code before the transfer of deed from the Detroit Housing Commision to any private entity happens.

Detroit has had a HUGE problem with do nothing property owners willing to wait decades to see a return on the initial investment. At the very least a legally binding contract stating that a finished fire suppression system must pass inspection in 5 years or any current owner loses title to the property.

I truly hope that you are right and I am dead wrong on this one but it is not just a few folks on this board that see red flags.

http://www.crainsdetroit.com/article...s-uphill-climb

**royce** · May-03-16, 09:54 PM

I am going to be very critical of this development because it sounds highly improbable that it's going to happen. Why this guy thinks he can rehabbed this building is beyond me. Most importantly, why is he even attempting to bring Lee Plaza back, especially as a luxury apartment complex. It's last incarnation as a residence was low-income senior living and that didn't work out. Also, as described by many already, the area is seriously "busted." I would love to see the building saved from the wrecking ball, but it's time has passed and it's in the wrong location. He should take that 51 million and invest it in Detroit in a different way, but it's his, I mean his investor's, money. They can do what they want with it.