Developer wants to save Lafayette

[E hemingway]

Council: Developer should work with DEGC on Lafayette Building proposal

Real estate investor Dennis Kefallinos wants to save Detroit's Lafayette Building, slated for demolition - but the Detroit City Council says the decision is in the hands of the Detroit Economic Growth Corp.

Eric Novack, project manager for Kefallinos' Dionysia Properties L.L.C., and Margaret Andrews, an attorney who represents Dionysia Properties and Boydell Development — another of Kefallinos’ entities — addressed the council at its Tuesday morning meeting.

"We would like to petition the city council to give us a two-week period for a structural analysis of the Lafayette Building," Novack said. "We feel at Dionysia that we could make it a viable property. We could have workers on the ground working within 30 days, within six months, a large portion of the restoration of the facade taken care of, and we could have the first two levels viable for commercial and retail."

Andrews told the council that in recent days, the group had contacted the DEGC, but had not received a response.

"We did not previously approach the council or the DEGC, because we were under the mistaken impression that there was a structural engineering report that said the building was unsalvageable, " she said.

Detroit's Downtown Development Authority voted last month to demolish the aged structure. Built in the 1920s, the triangular neo-classical building has been unoccupied since 1997. It's located at the intersections of Shelby Street, Michigan Avenue and West Lafayette Boulevard.

Andrews said that Dionysia has $3 million to $4 million in hand to finance the first stage of development of the building.

During an interview Monday with Crain’s, Novack said a preliminary plan would include loft-style apartments and retail on the ground level.

Some City Council members advised Andrews and Novack that the DEGC was the appropriate agency to contact.

"If you have the money, take it to [[DEGC President and CEO George Jackson) and he will take it seriously," Councilwoman Barbara-Rose Collins said.

Councilwoman Martha Reeves argued in favor of allowing Dionysia to investigate the building.

"If we can have any influence to get a two-week stay to investigate, I don't think there's anything we should deny," Reeves said. "I think we should approve."

But after Andrews acknowledged that Dionysia was related to the company that owns the dilapidated Shapero Hall building, Councilman Kwame Kenyatta expressed doubts about Kefallinos' track record.

"I will definitely not vote on anything related to, a godson of, a cousin of, the company that owns that building," he said.

Kefallinos purchased the old Wayne State University pharmacy school in 2007 for $2.4 million.

Detroit City Council President Ken Cockrel Jr. said he thinks it's probably too late for the Lafayette Building.

"I'm inclined to agree with most of my colleagues," he said. "At this point it's really too late. It's the [[DEGC's) place. There are a number of developers who went into that building and wrote it off, and said that building has serious structural problems. ."

Cockrel said he'd like to see a plan in writing.

"A lot of people have got great ideas, but comes down to show us a track record, and show us you have money in the bank to make this happen right now," he said. "If you can show me that in writing, I will ship it to George Jackson myself."

http://www.crainsde troit.com/ article/20090707 /FREE/907079985/ -1#

[ASR89]

Good news if they're serious. However, the situation could turn into another Broderick Tower real soon: Buy the property and let it sit for years, saying you'll do something but never do. Or on the flip side, it could be another Book Cadillac. It would be awesome if restored.

[DetroitScooter]

Sounds like a plan, which is more than "Demolition" Jackson has come up with. At least let them look at it. Easy decision.

[dtowncitylover]

I don't why they rush to tear this building down. It's not the most unsightly building downtown. I hope that they get the chance and will pray that they will do something positive with the building.

[dexterferry]

I wish one of the hundreds of journalists working in detroit would take an interest in exactly why george jackson and these others are so hellbent on seeing this building become another eyesore parking lot.

keffalinos tried very hard to redevelop Shapero Hall. He had all kinds of [[typically cockamamie) plans for the building and he tried to get them approved but the NIMBYs in lafayette park threw a fit and launched an organized attack against his plan [[from what I've heard, they didn't want a nightclub or the traffic of a hotel disrupting their quiet little enclave). someone should tell Kenyatta Shaphero Hall's redevelopment failed because a handful of vocal Lafayette Park residents prefer an abandoned eyesore to a functioning enterprise in their neighborhood, not for lack of trying on the part of Keffalinos).

this guy gets the "slumlord" tag around here a lot, and I'm sure he could run his rental units a lot better, but the fact is Keffalinos does actually try to do things in this town and doesn't just sit on vacant properties like higgins, moroun, and others. I say good for him if he can do something with the lafayette building.

[DetroitDad]

This will certainly look bad for the D.E.G.C. and the D.D.A. if they don't take a good hard look at this. The fact that demolition over any chance of development is even considered is a mockery of these institutions.

For those that don't know, D.E.G.C. and D.D.A. stand for the Detroit Economic Growth Corporation and the Downtown Development Authority, respectively; because somehow economic growth and development have become synonymous with demolition for vacant landscaped lots, unsightly parking garages, and surface parking lots. This has happened so much in the City of Detroit that many Detroiters now cringe whenever the word development is used. On the other hand, economic growth projects are now viewed by most Detroiters as buzz words, leading many Detroiters to scoff at so called economic development projects and say; "we'll believe it when we see it".

[Downtown diva]

This will certainly look bad for the D.E.G.C. and the D.D.A. if they don't take a good hard look at this. The fact that demolition over any chance of development is even considered is a mockery of these institutions.

For those that don't know, D.E.G.C. and D.D.A. stand for the Detroit Economic Growth Corporation and the Downtown Development Authority, respectively; because somehow economic growth and development have become synonymous with demolition for vacant landscaped lots, unsightly parking garages, and surface parking lots. This has happened so much in the City of Detroit that many Detroiters now cringe whenever the word development is used. On the other hand, economic growth projects are now viewed by most Detroiters as buzz words, leading many Detroiters to scoff at so called economic development projects and say; "we'll believe it when we see it".

I agree, Sean!

[Huggybear]

This will certainly look bad for the D.E.G.C. and the D.D.A. if they don't take a good hard look at this. The fact that demolition over any chance of development is even considered is a mockery of these institutions.

Kefallinos is the real estate equivalent of the guy with 10 rusted-out, dysfunctional old cars parked on blocks his front lawn - and when he wants to drive one [[if ever), instead of doing a body-off restoration, he breaks out the duct tape, Bondo and Krylon. If you don't like Ilitch or Higgins, you're really not going to like Kefallinos.

[Fnemecek]

^ How is that any better than the DEGC's proposal for a vacant lot with overgrown weeds and trash that never gets collected?

[EastSider]

^ How is that any better than the DEGC's proposal for a vacant lot with overgrown weeds and trash that never gets collected?

Better question, why do we expect a Kefallinos project to be better than what we currently have at the Lafayette building?

[detourdetroit]

with all due respect to the idea that Keffalinos is not a proponent of the highest standards, and as a former disgruntled resident of one of his buildings, I find myself arguing on his behalf.

While he has some structures like the American, etc. that are currently vacant, he has many that are not. In fact, of the landlords of his ilk, his efforts to get the number of historic properties that he does own activated and put into productive use, are pretty remarkable.

Keffalinos may not be the best for the job, but he is good for the job. And if the choice is between a DEGC smoke screen pocket park reminiscent of the weed strewn blight that is the Statler site and the potential for an effort that is reminiscent of the Boydell building, as a city lover I'd choose the latter any day of the week.

[Retroit]

I'm not in favor of tearing down the building, but I'm also not in favor of selling it to someone who is not able to do a decent restoration of it. The City of Detroit shouldn't sell the building for $1 to someone just because they have a some plan and some money. Can the city afford to be picky? If they want to stop the cycle of absentee landlordism, they'd better start being picky.

A decent restoration would probably cost $40 million [[uneducated guess), so giving the building to someone who only has $4 million would be like giving a home that needs $100,000 worth of restoration to someone that can only afford a $10,000 worth of restoration.

Until Dionysia submits a complete proposal and can come up with the complete amount to fulfill it, they should not be taken seriously.

[E hemingway]

That's ludicrous Retroit. No developer puts up a complete plan with all of the money for it up front. Homeowners don't do it. Commercial landlords don't. Nobpdy does. My educated guess [[and I have a pretty good idea of what I am talking about) is that Keffalinos can make that building viable and respectable looking for under $10 million. That means he fixes the roof, secures and cleans the exterior and rehabs the first floor or two so it's commercially viable. The whole building doesn't need to be done all at once.

The bottom line is the city is essentially broke. It doesn't have millions of dollars laying around for demolitions of choice. This is a demolition of choice, not necessity. It will create jobs, tax base and increase the property values in the surrounding area. This is an easy business decision. It would be a complete failure on the DEGC, DDA and city's part if they didn't find a way to make this investment happen.

[ghettopalmetto]

I'm not in favor of tearing down the building, but I'm also not in favor of selling it to someone who is not able to do a decent restoration of it. The City of Detroit shouldn't sell the building for $1 to someone just because they have a some plan and some money. Can the city afford to be picky? If they want to stop the cycle of absentee landlordism, they'd better start being picky.

A decent restoration would probably cost $40 million [[uneducated guess), so giving the building to someone who only has $4 million would be like giving a home that needs $100,000 worth of restoration to someone that can only afford a $10,000 worth of restoration.

Until Dionysia submits a complete proposal and can come up with the complete amount to fulfill it, they should not be taken seriously.

You obviously don't know a damned thing about the construction industry. No one EVER has all the money up front. Typically, it trickles in from the banks, and through pre-sales and pre-leases.

You, of course, are well aware, that if the DEGC were interested in being picky, there is a mechanism known as a Request for Proposals. Of course, this also means you need to review the RFPs, and not just throw them all out the door on the basis of Cause like the DEGC did with Tiger Stadium. It also requires that the DEGC know more about development than just demolition.

On the other hand, if the mission of the DEGC is to promote development vis-a-vis being in the real estate business itself, just sell the damned building and let the free market work its magic. Developers know more about this kind of thing than George Jackson, anyway. Just ask John Ferchill, who saved the "unsalvageable" Book-Cadillac.

Now, let's consider. No one knows how much it would cost to return the Lafayette to an operating condition. And the costs depend on what the use of the space will be [[offices tend to use higher-end finishes than residences). So how you arrived at your bullshit $40 million figure is beyond me.

The $4 million, if you would pay attention, or knew anything about how construction projects work, is merely to conduct an investigation, determine a scope of repairs, perform any immediate stabilization that may be required, and engage an architect to develop a schematic design. THEN you can get a price. In other words, this $4 million needs to be spent IN ORDER TO develop a "complete" proposal.

Of course, since the DEGC doesn't believe in Due Diligence, you can't put numbers on jack shit, other than they're going to spend $1.4 million the City doesn't have.

[crawford]

LOL, what a joke! Knock it down already, Jackson!

Ignore this creep Kefallino. He's all talk and hasn't done a thing in his life. He just wants the media attention.

No more slumlords, please. We have a huge public investment in the Book Cadillac, and we don't want it screwed up by this sleazy speculator.

[dexterferry]

He's all talk and hasn't done a thing in his life.

hmm. he immigrated from greece, started working as a dishwasher, and now owns a good chunk of downtown detroit, including many buildings that contain commercial activity providing hundreds of jobs. you and I may not care for the wares at the Ruseell Bazaar or the tittybars, but don't accuse the guy of doing nothing.

[Gsgeorge]

Geez crawford -- the second someone steps in who has a semi-legitimate track record & wants to do something good for downtown, you shoot him down?

I'd say any interest in redeveloping the Lafayette is very, very, very good. Let him poke around. He'll find a solid building that could be readapted into a hub of commerce & living downtown. Kellifanos is smart because he knows his market. He doesnt shoot for the moon and make luxury condos. He brings it down to size, puts in affordable shops [[like the Kresge shops) and reasonably-priced lofts. If he's really smart he'd try to pull in a grocer to anchor the development.

[Detroit500]

I'd love to see this come to fruition... If it can't, hopefully some more development by the Book Cadillac in another way. It's so sad that this beautiful newly restored hotel is basically isolated, and surrounded by vacancies and a Holiday Inn.

[Gistok]

Even a choice between a half-assed restoration of an occupied building OR a parking lot...

only an idiot would choose a parking lot. [[Let's see just how many there are of those in city government...)

Granted Kefallanos's reputation is not the greatest... but I wonder just how many downtown buildings would not even be standing today if it weren't for him?

He got a nice tidy sum for that Ilitch destroyed beauty he recently sold on Grand River Ave., so he may have a decent bank account at the moment.

[Rocko]

I realize this guy's reputation is not sterling.... are any Detroit developers'? If it's just two weeks they want to take a good look, not giving them the opportunity would be a sin. Give them the time, if it's as bad as some have said, then the wrecking ball will only be delayed half a month. If not, and I'm hopeful on this, this could be the start of something grand. DEGC, give them the time!!

[kraig]

What the hell, he may be full of stuff. But, on the off chance that he may be able to pull it off, it won't hurt to let the guy take a look at it. Best case scenario, he's able to make something out of it, the building is saved and is active again. Worst case scenario, he can't do anything with it and the DEGC tears it down anyway.

It's not going to disrupt anything between now and the time that the demolition would start.

[Fnemecek]

Damn, Kraig and I are in complete agreement on something.

[gravitymachine]

all you folks putting your faith in kellafinos "saving" the place better get used to the most half assed rehab ever undertaken if this isn't a publicity stunt

and as far as lambasting the "NIMBY's" in LP above, would you opt to allow your neighborhood to completely disrupted by a massive entertainment complex?

[davewindsor]

all you folks putting your faith in kellafinos "saving" the place better get used to the most half assed rehab ever undertaken

I'd rather have a half assed rehab than nothing at all. The BC has a 15 year tax abatement. If this guy even does a half assed rehab and finds some tenants for the main floor, it means property taxes will paid to the city. A small boulevard pays no property taxes, in fact, they are out money for the demo. A city running a deficit would be crazy, if not negligent to the taxpayer, to not consider someone willing to pay property taxes. If he can prove he has $3-$4million and is willing to sign a contract that he can get at least the main floor online, give the guy a chance.

[BShea]

all you folks putting your faith in kellafinos "saving" the place better get used to the most half assed rehab ever undertaken

and as far as lambasting the "NIMBY's" in LP above, would you like your neighborhood completely disrupted by a massive entertainment complex?

I live in Lafayette Park and can see his building from my window. I would be OK with an upscale hotel, but I wonder if Greektown would fight that ... I don't want a flophouse or bum-nest, like we have now. We walk downtown through that block and it's not the most comfortable place to walk near at night.

I'm in LP, but I'm not part of [[or subject to) the Red Menace, AKA the LP collective/commune board, LOL. I hear stories of them manning their proverbial barricades against anyone who doesn't subscribe to The Nation and actively post on Daily Kos, LMAO. Great area, tho, so I guess they've done OK in keeping out the Right Wing riff-raff [[right being anyone to the right of, say, Michael Moore). Love the area, plan to stay a long time.