Developer wants to save Lafayette

[Huggybear]

We don't know what the building would bring on the open market because the DEGC has been adamantly opposed to putting it on the market.

The results of "the free market" can be seen in Grand Circus Park, Lafayette Park, Capitol Park, Washington Boulevard, and the multitude of private, immovable surface parking lots pockmarking downtown. People [[Kefallinos, Higgins, etc.) buy properties for back taxes or dirt cheap, sit on moldering buildings or lots, and ask astronomical prices if anyone shows any interest in redevelopment. You might not like who is running things at DEGC or how it disposes of property, but it's pretty hard to call its holding an inventory "irrational" given what has historically happened downtown.

[dexterferry]

huggybear, you work for the DEGC, right? if you're going to be posting on an anonymous forum why not provide some insight rather than just defending your boss.

[Stosh]

More fuel for the fire: http://www.freep.com/article/2009071...-on-in-Detroit

Especially interesting is the side bar with "just imagine if we still had"
Old City Hall
Post Office
Detroit Museum of Art

As I remember it, the old city hall was razed due to the floor beams being warped, or something like that. Structurally unsound. The other two are an abomination, but that's the way cities get built and renewed, sadly.
Here's the Museum of Art, that was not included in the article, from the Library of Congress American Memory collection, Detroit Photographic Company archives.

[Novine]

"You might not like who is running things at DEGC or how it disposes of property, but it's pretty hard to call its holding an inventory "irrational" given what has historically happened downtown."

Like the DDA/DEGC hasn't sold off their lots and buildings to Ilitch to be turned into parking lots or spent millions of public dollars to demo Ilitch-owned buildings that then become parking lots or vacant patches of dirt. You claim your not associated with the DEGC but the fact that you can rant about the slumlords and leave Ilitch's name out makes it clear where your loyalties lie [[DEGC or Ilitch, which is it?)

[Fnemecek]

The results of "the free market" can be seen in Grand Circus Park, Lafayette Park, Capitol Park, Washington Boulevard, and the multitude of private, immovable surface parking lots pockmarking downtown.

That's the result of the free market + almost non-existent code enforcement + a DEGC/ DDA that has failed in its primary mission of attracting new businesses to Detroit and boosting the ones that we have. If one were to address the second and third factors, the first one wouldn't be as much of an issue.

People [[Kefallinos, Higgins, etc.) buy properties for back taxes or dirt cheap, sit on moldering buildings or lots, and ask astronomical prices if anyone shows any interest in redevelopment.

Yeah, my bad. No one else in the entire world has ever had to deal with land speculators.

We should just spend millions of dollars that we can't afford to demolish all of these buildings in the first place.

You might not like who is running things at DEGC or how it disposes of property, but it's pretty hard to call its holding an inventory "irrational" given what has historically happened downtown.

I can think of many words to describe them. Irrational is, without a doubt, the nicest of them and it isn't the least bit hard to use any of those words.

[Novine]

For the Huggybears, one of the former DEGC staffers echoed what many have said here already.

"But Zeiler also faults his former colleagues at DEGC who, he said, have never adequately surveyed all of Detroit's historic structures and come up with a policy for preserving the best of them.

"The vision for historic properties needs to go past just isolated deal making, with historic tax credits simply a tool thrown into the mix to try to make a deal happen," Zeiler said.'

I've said the same thing here. Step One for Demolition Jackson is to identify within his scope of responsibility all of the historic buildings he thinks are worth preserving. Then all parties will be clear on what may face the wrecking ball and what doesn't have to be constantly monitored to make sure Jackson doesn't run the demolition contractors through it in the middle of the night.

[MIRepublic]

Speaking of Zeiler, you all remember who he is, right?

[DetroitDad]

What "different scenario?" I'm not talking about the Hudson's block. I'm talking about all of the existing retail space that is empty, like all of the spaces on either side of Woodward between GC Park and Campus Martius.

None of that has been filled since the Super Bowl was allegedly going to cause Detroit to rise, so why would it make economic sense to create even more retail space in the Lafayette?

You are talking about a one sided street. One sided streets have been shown to discourage pedestrian activity significantly, especially during blustery Winter days. Yes, Woodward is prime, but it wasn't prime enough for the prices they ere asking. Furthermore, there is also not enough pedestrians and residents in that area to fill more than what is already there.

The Lafayette Building has close proximity to many residences, offices, and parking garages. The Lafayette is also near three heavy pedestrian traffic areas; Campus Martius, Washington Boulevard, and the Financial District. The Lafayette is also highly visible at the Lafayette Michigan intersection.

[Fnemecek]

To add to DetroitDad's comments, one of the other important differences regarding the Lafayette Bldg. is that it's location makes ideal for outdoor advertising space. A developer could secure revenue from both the side facing Campus Martius Park w/ a Times Square style electronic billboard, which wasn't an option for Hudson's. The side that faces the U.S. Court House is also a lucrative option for ad revenue.

This - plus the various tax credits and a couple of other things - gives a potential developer the revenue that they need to justify $4 - $5 million in renovation expenses, without any of the office or retail space being leased.

Obviously, once the market imporves in downtown Detroit, they'll want to lease that space. The court house side advertising will have to come down [[because no one wants to rent office space when your windows are covered by another company's advertising).

Or we can just spend $1.4 million to throw it all away.

[davewindsor]

To add to DetroitDad's comments, one of the other important differences regarding the Lafayette Bldg. is that it's location makes ideal for outdoor advertising space. A developer could secure revenue from both the side facing Campus Martius Park w/ a Times Square style electronic billboard, which wasn't an option for Hudson's. The side that faces the U.S. Court House is also a lucrative option for ad revenue.

Just out of curiousity, what are the market rents for outdoor advertising space in this area of downtown?

[Gistok]

While I don't defend Higgins or Kefallanos, they do remind me of another downtown building "collector" named Chuck Forbes. Mr. Forbes bought up much of upper downtown [[theatre district) in the 1980's, although he didn't have the money to fix up very many of them. We are very fortunate indeed that Mr. Forbes owned so many buildings, and secured them. He also had the good fortune to own several properties in the Stadia footprint, which he sold at a great profit, but sadly were destroyed [[YMCA, YWCA, Wolverine Hotel).

But it gave Mr. Forbes enough money to spend on restoring several of his other properties... such as the Gem/Century Theatres, Elwood Bar, Colony Club Building, and the Francis Palms Building with attached State/Filmore Theatre [[although the theatre auditorium was never fully restored).

Fortunately Mr. Forbes wisely followed CAY's advice and sold the Fox Theatre/Building to the Ilitch's, so that a $12 million restoration could be done [[something that Forbes was unable to afford, even today).

Although it is not fair to compare Chuck Forbes to either Dennis Kefallanos or Michael Higgins, at least their buildings are still standing... a claim that many that other business owners [[and the city) cannot make.

Back in the 1980's many people claimed that the old theatres and their attached [[empty) office towers were an eyesore that should come down. Fortunately for Detroit, those people weren't listened to....

[royce]

Yeah, I remember Zeiler, a.k.a the dreaded Skulker. One of the most pompous, arrogant, and tactless human beings I have ever had the displeasure of knowing. I heard he went to Charlotte, NC. He may have known a thing or two about development, but like I mentioned above, his arrogance and lack of tact, made it almost impossible to discuss issues with him because he thought he knew it all; and he insulted you if he thought you didn't [[where the lack of tact came in). I hope someone told him about his shortcomings so that he could avoid repeating them in NC.

[Huggybear]

Ideal for advertising? The apex of the Lafayette Building faces Campus Martius but is obscured both by the E&Y building and other things around it [[including the Arcade Bar and the ratty buildings that house the Lafayette and American Coney Islands). One of the two large faces looks at the Book Cadillac parking deck, and the other faces a vacant corner office building and the Federal court parking decks [[you can see about five feet of that face coming up Shelby). The V [[as if you're going to build something across the two wings) faces two surface lots and ultimately the windowless face of the blue parking deck. There is nothing facing any significant amount of pedestrian or automotive traffic.

Assuming that you could get a permit for it, you could do this with Cadillac Tower or erect something on the Monroe Block, but it's a questionable proposition with the Lafayette.

If past is precedent, Kefallinos isn't going to spend jumbotron money anyway. He'll do another canvas billboard with Power Puff girls advertising some other one of his properties [[witness the ones on Russell Industrial and Shapero Hall). Why hasn't someone busted him for this?

To add to DetroitDad's comments, one of the other important differences regarding the Lafayette Bldg. is that it's location makes ideal for outdoor advertising space. A developer could secure revenue from both the side facing Campus Martius Park w/ a Times Square style electronic billboard, which wasn't an option for Hudson's. The side that faces the U.S. Court House is also a lucrative option for ad revenue.

This - plus the various tax credits and a couple of other things - gives a potential developer the revenue that they need to justify $4 - $5 million in renovation expenses, without any of the office or retail space being leased.

Obviously, once the market imporves in downtown Detroit, they'll want to lease that space. The court house side advertising will have to come down [[because no one wants to rent office space when your windows are covered by another company's advertising).

Or we can just spend $1.4 million to throw it all away.

[Fnemecek]

Ideal for advertising? The apex of the Lafayette Building faces Campus Martius but is obscured both by the E&Y building and other things around it [[including the Arcade Bar and the ratty buildings that house the Lafayette and American Coney Islands). One of the two large faces looks at the Book Cadillac parking deck, and the other faces a vacant corner office building and the Federal court parking decks [[you can see about five feet of that face coming up Shelby). The V [[as if you're going to build something across the two wings) faces two surface lots and ultimately the windowless face of the blue parking deck. There is nothing facing any significant amount of pedestrian or automotive traffic.

Great, I'll be sure to call the people who do outdoor advertising for a living and tell them that some DEGC staffer who posts anonymously on an internet message board knows more about their business than they do. I'll call you when they stop laughing.

Two of the four sides that you said aren't feasible for advertising [[the ones facing parking structures or lots) are ones that no one ever proposed using for it.

As for the two sides where I did mention the idea of using it for advertising:

• The coney island restaurants are lower than where the signs would go. There isn't anything about the that would impact what people will pay to advertise there;
• The E-Y building does narrow the field of view that can potentially see the sign, but it doesn't block it completely. Therefore, the amount of revenue would be reduced proportionately but not eliminated; and
• The Shelby side is visible from the federal court house and the high-priced attorneys who make appearances there. As far as the advertisers are concerned, that's all that matters.

Bottom line: advertising and other items would generate enough revenue for the Lafayette Bldg. to justify the $4 - $5 million in renovations that it would take to stabilize the building and make it ascetically pleasing from the Westin Book Cadillac. More importantly, it would enable a developer to do this without having to rely on either office or retail rental income, which he probably wouldn't get in the current market anyway.

Assuming that you could get a permit for it, you could do this with Cadillac Tower or erect something on the Monroe Block, but it's a questionable proposition with the Lafayette.

There's no point in assuming that one could get a permit to erect advertising on the Cadillac Tower. The building has had advertising on its western face for more than a decade now.

[Fnemecek]

Just out of curiosity, what are the market rents for outdoor advertising space in this area of downtown?

It varies widely - anywhere from $5,000 to $25,000 per month - depending on how large the space is, how many people will see it and who is likely to see it.

[EastSider]

You are talking about a one sided street. One sided streets have been shown to discourage pedestrian activity significantly, especially during blustery Winter days. Yes, Woodward is prime, but it wasn't prime enough for the prices they ere asking. Furthermore, there is also not enough pedestrians and residents in that area to fill more than what is already there.

The Lafayette Building has close proximity to many residences, offices, and parking garages. The Lafayette is also near three heavy pedestrian traffic areas; Campus Martius, Washington Boulevard, and the Financial District. The Lafayette is also highly visible at the Lafayette Michigan intersection.

Care to share the link for this "one-sided street" theory?

We're supposed to believe the Lafayette building is somehow more accessible to pedestrian activity than Compuware, which wasn't able to keep its retail?

[kraig]

Speaking of Zeiler, you all remember who he is, right?

I remember that he went off about the leadership, or lack thereof, in the area to the papers a little while ago. Is there something else up with him?

[Rocko]

I realize there are several differences between the Lafayette and the Argonaut, and that the projects for these structures would be different, but there are also many similarities between these two buildings and their histories. They are making it work for the Argonaut. It seems they shouldn't turn so fast from making it work for the Lafayette. $63 million in Historic Preservation tax credits! That's no small number. Think how far $63 million would go for the Lafayette.

http://www.freep.com/article/2009071...elopment-spark

[rjlj]

It is working for the Argonaut because it seems that the DEGC is not involved in that project.

[staticstate]

I bet there would be plenty of people willing to volunteer at the Lafayette and do what they are doing over at MCS. Think Kefallinos is paying attention?

[Toolbox]

Ah, yes. Let's witness the Compuware retail.

Yesterday, I went to the Credit Union One in the Compuware complex so I could withdraw money to buy a new book at Border's to read over my lunch at The Woodward. I wanted to finish with desert at Ben & Jerry's, but you never know if the posted hours are their real hours, and it was already closed for the night.

Spot on!

DK is still a slum lord plain and simple. Did he get a C of O for the Milwaukee lofts yet?

[PQZ]

1. Huggybear is not a DEGC employee or affiliate. I know the DEGC folks and s/he ain't one of them. I do however, respect HB's and Kraig's [[elatively) non-hysterical and reasoned approach to the issues at hand.

2. The idea of selling outdoor advertising to fund the development of a building has already been tried - at the David Broderick. The much larger advertisement with direct views and televsion opportunities from Comerica Park render that a much more lucrative spot than a handful of lawyers arguing motions in the Federal Courthouse. The Broderick sign nets about $600,000 a year and has yet to result in any redevelopment at the Broderick. Bottom line - even if the Lafayette were to match the Broderick in revenue [[which will NOT happen given location and size) it would take seven years to accrue the cash necessary to meet the laughably low estimate of $4 - $5 million to occupy the first two floors.

3. Speaking of the Broderick - Rjlj- you are wrong when you suggest the Argonaut is working because the DEGC is not involved with it. Quite the contrary, DEGC has been working on iterations of that project for more than five years and has tax credits and other mezzanine financing going into the project. Without DEGC, there is no Argonaut. Some of you may not also be aware that without DEGC there is no TechTown or any of the residential conversions occuring between TechTown and the Argonaut.

4. As a person who directly bid, contracted and managed tens of millions of dollars in mothballing, renovation and demolition work I am more than confident that a $4 million investment will not secure the Lafayette for partial uses. The adequate water proofing of the building will run to well more than $5 million - and that does not even begin to address the remediation, utility and life saftey systems. My estimate is around $15 million +/- 20% to have the first floor habitable and code compliant.

5. And finally, shame on you Frank Nemecek. Not once during the process of renovating the Book Cadillac Hotel did you or a representative of Friends of the Book Cadillac attend a single public meeting about the building. Not one of the three hearings in front of the Detroit Historic Commission, not one of the dozens of DDA meetings in which contracts or other actions were taken, not one of the six or seven Brownfield Authority hearings in Detroit or in Lansing. The DEGC spent six years to find a way to finance the building which has a value of nearly half of what it cost to restore it. THAT is the DEGC doing its job. THAT is hustling new business to the City. THAT is doing the actual hard work necessary to make things happen in the city while people like you sat on the sidelines, designed T-shirts and then congratulated yourselves for "raising awareness" - as if a lender was swayed by 300 t-shits.

The reality is that DEGC does not have an overall strategy for historic preservation within the downtown area. And neither do the preservationists. BOTH are at fault.

Worse, the dilletente preservations are making things worse for preservation.
The reality is that the DDA / DEGC is saving far more buildings - even with an ad hoc approach than they are tearing down.

Screaming for the head of George Jackson over Tiger Stadium and the Lafayette when the preservation limelighters did nothing to assist the process of restoration - save writing letters too late for any impact - is hypocricy at its worst.

Posters here have been wetting their pants in excitement over the Book Cadillac and Fort Shelby. Many of those same posters live or visit with friends in the Kales, Lofts of Woodward, Merchant's Row, Iodent etc. Many eat and drink in Park Bar, Cetaur, Cliff Bell's, Detroit Beer Co., Cheli's, Angelina's - the list goes on and on of projects that wopuld not exist with out the DDA and DEGC.....yet when the Lafayette is threatened the hundreds of millions of dollars invested through DEGC into those projects are forgotten and George Jackson becomes the biggest monster history has ever known.

[gumby]

Spot on!

DK is still a slum lord plain and simple. Did he get a C of O for the Milwaukee lofts yet?

I would assume so seeing as people have been living there for several years, unless something has happened since mt ex-GF lived there back in 06 [[which is possible). No doubt DK wasn't very responsive to tenants complaints and I personally wouldn't give him money. But I would rather see him get the building and put some money into it instead of a vacant lot.

[Fnemecek]

1. Huggybear is not a DEGC employee or affiliate. I know the DEGC folks and s/he ain't one of them.

I stand corrected.

2. The idea of selling outdoor advertising to fund the development of a building has already been tried - at the David Broderick. The much larger advertisement with direct views and television opportunities from Comerica Park render that a much more lucrative spot than a handful of lawyers arguing motions in the Federal Courthouse. The Broderick sign nets about $600,000 a year and has yet to result in any redevelopment at the Broderick. Bottom line - even if the Lafayette were to match the Broderick in revenue [[which will NOT happen given location and size) it would take seven years to accrue the cash necessary to meet the laughably low estimate of $4 - $5 million to occupy the first two floors.

Well, one could wait seven years to accrue enough cash.

Likewise, when I decided to buy my own home, I could have waited another 10 years or so until I was able buy it in cash. Or I could get this new thing called a mortgage. I only had to show the bank that my income was sufficient to make the mortgage payments and I got to buy my home 10 years earlier.

The same thing applies here: if there's enough revenue from advertising to make the payments, one can borrow the funds needed.

5. And finally, shame on you Frank Nemecek. Not once during the process of renovating the Book Cadillac Hotel did you or a representative of Friends of the Book Cadillac attend a single public meeting about the building. Not one of the three hearings in front of the Detroit Historic Commission, not one of the dozens of DDA meetings in which contracts or other actions were taken, not one of the six or seven Brownfield Authority hearings in Detroit or in Lansing. The DEGC spent six years to find a way to finance the building which has a value of nearly half of what it cost to restore it. THAT is the DEGC doing its job. THAT is hustling new business to the City. THAT is doing the actual hard work necessary to make things happen in the city while people like you sat on the sidelines, designed T-shirts and then congratulated yourselves for "raising awareness" - as if a lender was swayed by 300 t-shits.

Yeah, big bad FoBC. All we did was make sure that the building stayed standing. As if that had anything to do with anything.

The FoBC was mobilized after then Mayor Dennis Archer announced his intention to demolish the building in 1999. They met privately with the Archer Administration, the City Council and others. After a variety of lobby efforts, they eventually backed away from demolition.

Two years later, when George Jackson and company came into office, it was clear that they were going to find a way to make the Book-Cadillac deal happen. So we let them.

Everyone at the DEGC had my phone number and my email address. If you needed anything, all you had to do was ask. Other than that, we stayed out of the way.

Some of us, after all, have businesses to run and families to raise.

If the DEGC was doing its job properly with the Lafayette, we'd stay out of the way there as well.

[Fnemecek]

Posters here have been wetting their pants in excitement over the Book Cadillac and Fort Shelby. Many of those same posters live or visit with friends in the Kales, Lofts of Woodward, Merchant's Row, Iodent etc. Many eat and drink in Park Bar, Cetaur, Cliff Bell's, Detroit Beer Co., Cheli's, Angelina's - the list goes on and on of projects that would not exist without the DDA and DEGC.....yet when the Lafayette is threatened the hundreds of millions of dollars invested through DEGC into those projects are forgotten and George Jackson becomes the biggest monster history has ever known.

Welcome to reality.

A physician can do his job properly every day for years and save hundred of lives in the process. However, he botches one operation and kills a patient then that's all anyone will ever remember.

A pilot can land a plane a thousand times and safely deliver millions of passengers in the process. However, if shows up to work drunk one day and crashes then that's all anyone will ever remember.

This is reality. George Jackson has to learn to do his job every single day. Not just when it's easy. Not just when it's convenient. Not just when people are praising him for it.

Every. Single. Day.

The fact that he got the job done a couple of years ago doesn't mean that you get to slack off for the rest of your career. The instant anyone thinks that the case, it's time to retire.

This is reality.