Banker: Penobscot Building in default

**Detroitnerd** · August-25-09, 02:14 PM

I believe Stott is vacant right now.

**digitalvision** · August-25-09, 02:14 PM

Sorry to break your heart, Detroitnerd and others, but light rail is not the panacea - not for these problems. Not to mention, it's at least a couple years away AND only goes to Grand Blvd at this time.

It's going to be at least a decade until rider patterns shift enough to have impact. Not saying we shouldn't do it, but in business, you can't bet on the future like that - especially in a region so full of disappointments. Seen too many lost shirts betting on the maybe.

Losing the penobscot would be a body blow to downtown and devastating.

BTW, it would be the whole penobscot block, they're considered 1 structure.

Stott is not completely vacant, but almost completely vacant. There's some retail and a couple office buried in there.

**GPCharles** · August-25-09, 02:22 PM

BTW, it would be the whole penobscot block

The Penobscot doesn't fill the entire block - there is the Ford Building and the old Silver's building.

**Detroitnerd** · August-25-09, 02:23 PM

Originally Posted by digitalvision

Sorry to break your heart, Detroitnerd and others, but light rail is not the panacea - not for these problems. Not to mention, it's at least a couple years away AND only goes to Grand Blvd at this time.

Awwww, poow wittwe me. Stop being a condescending dick.

Originally Posted by digitalvision

It's going to be at least a decade until rider patterns shift enough to have impact. Not saying we shouldn't do it, but in business, you can't bet on the future like that - especially in a region so full of disappointments. Seen too many lost shirts betting on the maybe.

Oh, yeah. It would be terrible if we had a plan that looked forward more than a year. But, since ridership patterns will take forever to shift, well, too bad. We may have to lose some more buildings. We all know it's disappointing, but, we have no vision. Sorry. Fuck it.

Originally Posted by digitalvision

Losing the penobscot would be a body blow to downtown and devastating.

But that's what lack of a long-term plan, as well as a plan that if we make downtown Detroit as flat and vacant as Troy was in 1955, we're assured success. So why complain when this is the natural outcome of our foolish plans and demolish-it-first strategy?

Thanks for playing.

EastSider · August-25-09, 02:30 PM

What's your plan to fill the Penobscot with tenants? You're good with tossing out the words "we have to plan long-term," but the Penobscot issue is here-and-now.

What ideas do you have that the last three owners didn't?

And think quick, because the First National Building is probably following quickly on the Penobscot's heels.

**digitalvision** · August-25-09, 02:36 PM

DN,

I know you're pissed - we're all pissed at this possibility.

I said planning is a good idea - and it's a GREAT thing we've got forward looking plans for Detroit and the region. It's REALLY important and if the work was done 15 or 30 years ago, we wouldn't be in this fix. Better now than never. But we need to be realistic about what it's going to do.

Losing buildings will not be a function of what any one of us do - it's business conditions. It's the market. It's the fact we've been in a one-state depression. One of the things that can be a huge positive for the city is those buildings and whenever possible they should be preserved or torn down only when there's a replacement plan, and a real one.

If a building is not financially viable, it can't continue to stand save for a ward of the state.

**Detroitnerd** · August-25-09, 02:39 PM

And I say you're eulogy for what is yet to be destroyed is disingenuous nonsense. I'm sick and tired of people blaming the past, the market, the city, the suburbs. You know who is to blame? We are.

**bailey** · August-25-09, 02:43 PM

Quote:
Originally Posted by digitalvision

Sorry to break your heart, Detroitnerd and others, but light rail is not the panacea - not for these problems. Not to mention, it's at least a couple years away AND only goes to Grand Blvd at this time.

Awwww, poow wittwe me. Stop being a condescending dick.

wow...Pot? Kettle? It's a legit point. There have been "serious" talks about "mass transit" in detroit for what...at least a decade? There have been at least 5 years of "real planning" and focus groups and what not about "light rail" up Woodward...and not much else beyond that. At the current pace are we any less than 5 more years from a shovel going in the ground for what is currently on the drawing board? I mean it's not like they're going to put the street cars back online. It's going to be a Woodward loop that, at best case, goes from downtown to 8 mile. At best case, even after what little is planned is put online, parking for tenants is still going to be an issue for much of the CBD for the long term.

No one is saying tear down the Penobscot, but the proposal was about the consolidation of tenants and the removal of the annex or the old Penobscot as a parking solution for the Penobscot and several other buildings struggling ot retain tennants. .

**iheartthed** · August-25-09, 02:52 PM

Sorry to break your heart, Detroitnerd and others, but light rail is not the panacea - not for these problems.

Of course it isn't a panacea all by itself. But it's necessary if Detroit ever hopes to achieve a meaningful rebound.

On my way to work this morning I was thinking about how public mass transit in other well-functioning cities is regarded as a necessity, while private automobiles are viewed as a luxury. In Detroit, it is exactly the opposite; private automobiles are regarded as a necessity, while public mass transit is viewed as a luxury. That's some ass backwards type of thinking.

**Oldertimer** · August-25-09, 02:52 PM

It is time to cut bait. It is time to "farm detroit". Tear it all down and start over. Run for mayor on not what you will do but what you won't do. You won't let "it" continue. You will tear down what is useless and not used. We all start over. It is 1701 all over again.

**Oldertimer** · August-25-09, 02:54 PM

We farm the fields. We rebuild in the future. Right now we get rid of what is waste and not needed or utilised.

**wolverine** · August-25-09, 02:55 PM

Originally Posted by EastSider

I believe the main tower is worth the loss of the two smaller ones.

I am so glad I don't live in a city where the fate of a sold block of good architecture is contingent on supplying parking [[of all things!) just to make half of the buildings marketable.

EastSider · August-25-09, 03:06 PM

Originally Posted by wolverine

I am so glad I don't live in a city where the fate of a sold block of good architecture is contingent on supplying parking [[of all things!) just to make half of the buildings marketable.

Good architecture doesn't pay the bills, though, does it?

**Catman** · August-25-09, 03:09 PM

Originally Posted by digitalvision

..... it's floor plans do not fit modern office needs nor does it's connectivity, and has some of the same maintenance issues the Book Tower had.....

How do other Art Deco era buildings remain viable today? Such as the Empire State Building, for exampe? How did they retro-fit these buildings?

**bailey** · August-25-09, 03:14 PM

Originally Posted by wolverine

I am so glad I don't live in a city where the fate of a sold block of good architecture is contingent on supplying parking [[of all things!) just to make half of the buildings marketable.

Maybe if people like you did live here, the situation would be different?

Stosh · August-25-09, 05:46 PM

Originally Posted by bailey

Maybe if people like you did live here, the situation would be different?

Apples and oranges argument. More telling is the business office market, and who once was the tenants for these buildings.

I suppose that all these buildings once had tenants that did business here. I'd also suppose that there's a vast amount of lawyers, consultants, and other professionals that do business with either the City of Detroit, the federal and circuit courts, the county, DPS, among other civil entities.

If all of these entities were, as a conditon of doing business with the above entities, required to maintain and staff offices in the CBD, I'd be willing to bet that there would be a significant rise in occupancy. It's one thing to have a cash cow, quite another to starve the cow to death.

EastSider · August-25-09, 06:43 PM

Or you'd drive more of the competent people away and we'd be left with people the caliber of Sam Riddle and Adolph Mongo.

**Onthe405** · August-25-09, 06:47 PM

Originally Posted by digitalvision

......has no parking, it's floor plans do not fit modern office needs nor does it's connectivity, and has some of the same maintenance issues the Book Tower had.

Originally Posted by Catman

How do other Art Deco era buildings remain viable today? Such as the Empire State Building, for example? How did they retro-fit these buildings?

This is a question I've often asked as well. In many cities, particularly Detroit, the conventional wisdom is buildings like the Book Tower & Penobscot are considered obsolete and non-competitive tear-downs because of their age, yet the Chrysler Building, Wrigley Building, GE [[RCA) Building , or even more amazingly, the Flatiron Building [[1902) and Woolworth Building [[1913) remain viable commercial properties. Somehow I doubt the tenants in these landmarks are lacking computer & phone infrastructure in the year 2009.

Obviously, these older buildings can be retrofitted. However, I surmise [[unlike Manhattan or Chicago) in a CBD like Detroit where real estate is hardly at a premium, the cheapest way to go is to implode and rebuild to a more realistic scale [[smaller) and with more current building standards.

crawford · August-25-09, 06:53 PM

I'm not sure I understand the issue under discussion.

Older buildings in a place like NYC can be retrofitted for modern needs because the market will support the necessary rents to pay for the upgrades [[while, of course, allowing for a healthy landlord profit).

In contrast, the Detroit market has low rents and high vacancy, and the high costs of upgrading will not come close to being covered by anticipated rents. Therefore, there are no major upgradings of older properties.

And, while lack of parking is a strong obstacle for older Detroit office buildings, in NYC no office building has parking, whether old or new. It just isn't an issue.

Additionally, because space is at such a premium in NYC, companies are just happy to find space that meets their needs. In Detroit, a company can pick from any building they desire, and in most cases will logically graviate to the nicest, most modern space.

Lorax · August-25-09, 06:55 PM

Much ado about nothing.

The Penobscot is in great condition compared to much else downtown- it will be resold at a loss, and another businessman or corporation will take a chance on it. The price will just keep going down until it can be had for a couple of thousand bucks.

crawford · August-25-09, 07:00 PM

A couple of thousand bucks for a huge 47-floor office tower

I know plenty of people who pay "a couple of thousand bucks" in monthly rent! For small aparrtments! Maybe they should buy giant office blocks instead.

Lorax · August-25-09, 07:13 PM

LOL!!

I was, naturally, exaggerating, but the price will come down to tooth-fairly levels. Didn't the Guardian Building sell for something like 4 million bucks recently?

**Detroit500** · August-25-09, 07:35 PM

Originally Posted by Lorax

LOL!!

I was, naturally, exaggerating, but the price will come down to tooth-fairly levels. Didn't the Guardian Building sell for something like 4 million bucks recently?

I don't know, but I"m sure Ficano would love to tell you.

DetroitDad · August-25-09, 10:19 PM

That trolley loop may not help the office market much, but it may help the residential market Downtown. I believe the Penobscots was being looked at for residential space, and residential space doesn't need nearly as much parking, and can sometimes get by with elevator garages, valet, or even none adjacent parking. Some residents are choosing [[or are forced) to not own a car, share a car, or rent space on the edge of the CBD for a cheaper price.

I don't know what the real world affects that loop will have on the residential market, but it is being sold as expecting to have a significant affect.

Anyway, I have no doubts that we will be losing more businesses and buildings in the coming years.

crawford · August-25-09, 10:27 PM

Doubtful the Penobscot could ever be a residential conversion.

It's floorplans are too big, and apartments obviously need windows.

You could only have super-long, narrow apartments.

And not sure what you mean by lack of need for residential parking. If these are market-rate units, there will be at least one parking spot per unit, and probably a lot more.