Financing secured; former United Way building to be offices, lofts by 2015

[hybridy]

Full article from Crain's:

The redevelopment of the former United Way building in Capitol Park is expected to be completed by the end of the year now that the developer secured $38.5 million in federal, state and private financing.
The 126,000-square-foot building at 1212 Griswold St. will be turned into new office space for 185 Archdiocese of Detroit employees and 56 loft-style apartment units.

Financing for the project came from federal New Markets and historic tax credits; state historic and brownfield tax credits; Beechwood, Ohio-based Liberty Bank NA; Chase Bank; J.P. Morgan Chase; the Chicago-based Urban Partnership Bank; the Chicago-based National Community Investment Fund;Invest Detroit; and Lansing-based Develop Michigan Inc., said Richard Karp, principal of Lansing-basedKarp and Associates LLC, one of the developers of the project.

Karp said units will range from 500 to 1,300 square feet. Rental rates won’t be known until the fall, but he expects them to rent for about $1.95 per square foot.

Most of the units will have one bedroom, but there will also be two- and three-bedroom units, he said. The development group for the project, Capitol Park Partnership, includes Karp; Kevin Prater, owner of Lansing-based Prater Development Ltd.; and Richard Hosey III, a former senior vice president for Bank of America who is now the owner of Detroit-based Hosey Development LLC. Lansing-based Buildtech Ltd., owned by Karp, is the general contractor on the project.

The Downtown Detroit Partnership’s Live Downtown Program will provide financial incentives to employees of several companies to move into the former United Way building, according to the release.
The Downtown Development Authority purchased the former United Way building for $1.75 million and the 72,000-square-foot Capitol Park Building at 1145 Griswold, according to Washington, D.C.-based real estate information service CoStar Group Inc.

Capitol Park Partnership owns the former United Way building, Karp said. The DDA still owns the Capitol Park Building, but Capitol Park Partnership has development agreements on that building and the 110,000-square-foot Farwell Building at 1249 Griswold, which was purchased by the Michigan Land Bank in 2009 for $3.3 million.

The DDA approved the development agreement for the three buildings in 2012.
“This is probably the fastest public/private partnership development in Detroit in the last 40 years,” Karp said.
Demolition and abatement began this month at the Capitol Park Building to turn it into retail/office space and 63 loft-style apartments. The Farwell Building will be redeveloped to feature first-floor retail space and 83 loft-style apartments, Karp said.

He said he expects to close on financing for the Capitol Park Building in the next four months, and the Farwell Building in the next six.

The archdiocese announced last year that it is moving into the former United Way building from the Gabriel Richard Building at 305 Michigan Ave. and the Chancery Building at 1234 Washington Blvd.

http://www.crainsdetroit.com/article/20140608/NEWS/140609853/financing-secured-former-united-way-building-to-be-offices-lofts-by

[Khorasaurus]

Your bolded section is the best part. Construction has been underway on the United Way building for a while [[although it's great to hear that they will definitely be able to finish it...), but the other two were more up in the air. Awesome to hear that construction on the Capitol Park Building is starting.

The Farwell is the absolute key to Capitol Park, though. It's the most visible building on the park, and it currently looks terrible. When it is done, Capitol Park will finally live up to its potential.

[Danny]

Luxury Condos in Gilbert Park. I like it.

[AveryTurner]

I hope they have good renovation plans used to make these new offices. There are many such home improvement installations that add value to the property and have profitable ROI. Its beneficial for both the owner and if he rents it out.Check This Out for good remodeling techniques. Its time people started investing in good plans.

[DetroitPlanner]

Luxury Condos in Gilbert Park. I like it.

I doubt it. The main tenant is the Archdiocese. Ever been in the Gabriel Richard Building? Not exactly posh.

Work has been happening here for several months.

[Hermod]

The redevelopment of the former United Way building in Capitol Park is expected to be completed by the end of the year now that the developer secured $38.5 million in federal, state and private financing.
The 126,000-square-foot building at 1212 Griswold St. will be turned into new office space for 185 Archdiocese of Detroit employees and 56 loft-style apartment units.

Financing for the project came from federal New Markets and historic tax credits; state historic and brownfield tax credits; Beechwood, Ohio-based Liberty Bank NA; Chase Bank; J.P. Morgan Chase; the Chicago-based Urban Partnership Bank; the Chicago-based National Community Investment Fund;Invest Detroit; and Lansing-based Develop Michigan Inc., said Richard Karp, principal of Lansing-basedKarp and Associates LLC, one of the developers of the project.

Detroit will not be back until announcements about new construction/rehab say something like:

"XYZ developers will build/rehab a new office building/apartment house/condominium/combination at xxxx Woodward Avenue. The ABC construction company has the construction contract. Financing is through a simple construction loan from Biggg Banque."

[eliboyer]

I hope they have good renovation plans used to make these new offices. There are many such home improvement installations that add value to the property and have profitable ROI. Its beneficial for both the owner and if he rents it out.Check This Out for good remodeling techniques. Its time people started investing in good plans.

Umm...Huh?

[mwilbert]

Detroit will not be back until announcements about new construction/rehab say something like:

"XYZ developers will build/rehab a new office building/apartment house/condominium/combination at xxxx Woodward Avenue. The ABC construction company has the construction contract. Financing is through a simple construction loan from Biggg Banque."

There is some truth to this, but you are always going to have people looking for things like brownfield credits and historic preservation credits when they are trying to renovate old buildings. According to the article, they anticipate residential rents of about 1.95/sq ft. That may be overoptimistic, but if such rents prove to be achievable, it should be possible to build apartments with conventional financing.

[Hypestyles]

There is some truth to this, but you are always going to have people looking for things like brownfield credits and historic preservation credits when they are trying to renovate old buildings. According to the article, they anticipate residential rents of about 1.95/sq ft. That may be overoptimistic, but if such rents prove to be achievable, it should be possible to build apartments with conventional financing.

500 sq. feet at $1.95 per sq. foot comes to $975 [[I wonder if any utilities are included). For a one-bedroom loft, is this considered “cheap”? About par? Expensive?

[DetroiterOnTheWestCoast]

500 sq. feet at $1.95 per sq. foot comes to $975 [[I wonder if any utilities are included). For a one-bedroom loft, is this considered “cheap”? About par? Expensive?

Depends on one's perspective....

http://sfbay.craigslist.org/sfc/apa/4510405914.html

[DetroiterOnTheWestCoast]

Detroit will not be back until announcements about new construction/rehab say something like:

"XYZ developers will build/rehab a new office building/apartment house/condominium/combination at xxxx Woodward Avenue. The ABC construction company has the construction contract. Financing is through a simple construction loan from Biggg Banque."

Detroit is so far down I'd say it won't be close to actually being "back" even if and when this bar is passed. However, as long as it keeps coming back, I think a lot of us will be happy.

Large parts of the city are clearly not even close to the "coming back" part of the equation, but a least parts [[led by midtown and downtown as we all know) clearly are rising. Now if the momentum can just keep growing....

[jt1]

Detroit is so far down I'd say it won't be close to actually being "back" even if and when this bar is passed. However, as long as it keeps coming back, I think a lot of us will be happy.

Large parts of the city are clearly not even close to the "coming back" part of the equation, but a least parts [[led by midtown and downtown as we all know) clearly are rising. Now if the momentum can just keep growing....

I agree that there are still too many issues in the city and the neighborhoods are continuing to suffer/deteriorate however Hermod's post does show a continuing trend in SE Michigan and those that left. The classic moving goalposts:

1. Originally it was downtown won't come back until the old buildings start getting rehabbed then when that happens
2. It won't come back until people want to live there then when that happens
3. It won't be better until prices start approaching market rate then when that happens
4. It won't happen until finance packages are simple and on and on and on.

Nobody will deny the issues throughout the city but too many will not acknowledge any progress without adding a new caveat.

[Dbest]

Detroit will not be back until announcements about new construction/rehab say something like:

"XYZ developers will build/rehab a new office building/apartment house/condominium/combination at xxxx Woodward Avenue. The ABC construction company has the construction contract. Financing is through a simple construction loan from Biggg Banque."

If it were only that easy. Do you know how much the Book restoration cost was? 300+ million...

I doubt Gilbert or any other wealthy elite in Detroit would be able to get a "big bank" to casually sign off on that amount.

[DetroiterOnTheWestCoast]

I agree that there are still too many issues in the city and the neighborhoods are continuing to suffer/deteriorate however Hermod's post does show a continuing trend in SE Michigan and those that left. The classic moving goalposts:

1. Originally it was downtown won't come back until the old buildings start getting rehabbed then when that happens
2. It won't come back until people want to live there then when that happens
3. It won't be better until prices start approaching market rate then when that happens
4. It won't happen until finance packages are simple and on and on and on.

Nobody will deny the issues throughout the city but too many will not acknowledge any progress without adding a new caveat.

Yes, that's sort of what I was getting at. If one's threshold is Detroit "being back" [[perhaps to 1,500,000 residents?) then whose lifetime will see that? My own threshold I guess is more basic - expanding the areas "coming back" and shrinking the areas that are continuing to crumble. Perhaps, at some point, the former can outpace the latter.

[DetroitPlanner]

If it were only that easy. Do you know how much the Book restoration cost was? 300+ million...

I doubt Gilbert or any other wealthy elite in Detroit would be able to get a "big bank" to casually sign off on that amount.

Try about half that amount. http://www.detroitnews.com/article/2.../BIZ/701290345

$300 million is still a lot of money for any kind of construction. Ford Field was a very expensive project at $430 million, and most of that cost was due to the spans as well as the large office building attached to it.

[Hermod]

Funny how much of the crowd spewing vitriol about gummint largess for the hockey arena are creaming their jeans about gummint largess for 185 butts in swivel chairs and 56 crackerbox apartments.

[Dbest]

Try about half that amount. http://www.detroitnews.com/article/2.../BIZ/701290345

$300 million is still a lot of money for any kind of construction. Ford Field was a very expensive project at $430 million, and most of that cost was due to the spans as well as the large office building attached to it.

Good call, I went to wikipedia and it says over 200 million. Got my figures mixed up over time. At 200 million its a miracle that it happened...

[GUSHI]

So does the aod own it?

[AveryTurner]

It cannot happen in a week or month, but I think one should be happy its happening. Progress has started! Now we have to just wait.

[DetroitPlanner]

So does the aod own it?

Fourth paragraph of the original post says who owns it.

[Spartan]

Great news, but I have a hard time believing a project funded by historic/brownfield credits will be done that quickly. I expect it will open sometime closer to mid-late 2015.