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

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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