Ilitch announces Huge plans for Red Wings Arena Project - Renderings Released

[hewettbr]

And I only linked to units downtown/midtown. What are you seeing that isn't downtown or midtown?

Yeah, i know for a fact most of the desirable places on that list have waiting lists, and most of them are not downtown. Lafayette park isn't downtown or midtown.

I'm sure i could find some cheap rent in Brightmoor too

Can you just give up this act you try to pull, stop trolling and relax?

I said everything i needed to say to you in my former post.

Here is a few simple questions for you: Why do you care so much about people who believe in the city or the city itself? Why do you take time out of your day to bash something you don't care about? Why is it so hard for you to believe that downtown and midtown have very high residential demand?

You're entitled to your own opinion but the facts are that downtown, midtown and areas around them are expensive and seeing huge gains in property value. Evidence in this is found in $2 a sq foot rent rates and tons of renovation to get new places on the market as quickly as possible. This is only the start, for a true recovery the outlying neighborhoods will need to be stabilized and reestablish themselves. This will take time but when i read the things you say i immediately think of an old-school ignorant thinking fool. Your way of thinking is whats been holding the whole metro area back for the last 60 years. Open your eyes.

[detmsp]

I think demand is relative to supply, if you opened up another 10000 apartments at market rate downtown and they all filled up within 6 months then under your reasoning demand is still lower than Minneapolis, but in reality there is no way to tell what demand is until you start to level off occupancy rates.

its safe to say all market rate and mid market rate places are basically occupied in downtown/midtown. so until that starts to drop to 90-95% there's in way of knowing actual demand, most people i talk to gave up on living downtown due to not being able to afford or find a place.

this is all my opinion although it is based on factual information. in no way am i calling anyone out with this post.

I get what you're saying. However, I think that if there were enough demand to fill 10000 apartments, you'd see that reflected in high prices. But we don't really see that. I know that prices have increased, but they really aren't very high. Paying $1300 for an apartment right in the middle of downtown in a brand new / remodeled building might seem expensive for Detroit, but in any other city that would feel relatively normal if not cheap.

I think what is causing hesitation on the part of developers is that just a few new buildings can have a significant % increase on the number of units in downtown. If demand doesn't somehow grow, that's going to result in prices dropping. And as we've seen, prices have only recently gotten high enough where developers are willing to even think about entering the market. This problem is lessened in a place like Minneapolis. If you added 500-1000 apartments to the market, you've increased availability by a mere 1/60th to 1/30th, so there probably won't be an impact on prices. Do that in Detroit and you've increased availability by 1/16 - 1/8. The impact on price would be way larger.

[hewettbr]

I get what you're saying. However, I think that if there were enough demand to fill 10000 apartments, you'd see that reflected in high prices. But we don't really see that. I know that prices have increased, but they really aren't very high. Paying $1300 for an apartment right in the middle of downtown in a brand new / remodeled building might seem expensive for Detroit, but in any other city that would feel relatively normal if not cheap.

I think what is causing hesitation on the part of developers is that just a few new buildings can have a significant % increase on the number of units in downtown. If demand doesn't somehow grow, that's going to result in prices dropping. And as we've seen, prices have only recently gotten high enough where developers are willing to even think about entering the market. This problem is lessened in a place like Minneapolis. If you added 500-1000 apartments to the market, you've increased availability by a mere 1/60th to 1/30th, so there probably won't be an impact on prices. Do that in Detroit and you've increased availability by 1/16 - 1/8. The impact on price would be way larger.

Yeah i definitely get that, i think once a lot of the projects now finish and fill up we are going to see the next round of rate increases. Remember, less than 1 yr ago rates really started to push people out of downtown. Right now downtown rates in Detroit match rates in Chicago's northside. Although in Detroit you get a nicer building, but in Chicago you receive better city services.

I think we will see another cost jump in the spring and that will really cause developers to consider new buildings.

As more businesses move into downtown their young employees will naturally look to live close to work, they have less tying them down and can uproot and move much easier.

[Gistok]

And I only linked to units downtown/midtown. What are you seeing that isn't downtown or midtown?

FYI... your link lists 97 properties... 75 of which are not in downtown/midtown....

[Spartan]

I get what you're saying. However, I think that if there were enough demand to fill 10000 apartments, you'd see that reflected in high prices. But we don't really see that. I know that prices have increased, but they really aren't very high. Paying $1300 for an apartment right in the middle of downtown in a brand new / remodeled building might seem expensive for Detroit, but in any other city that would feel relatively normal if not cheap.

I think what is causing hesitation on the part of developers is that just a few new buildings can have a significant % increase on the number of units in downtown. If demand doesn't somehow grow, that's going to result in prices dropping. And as we've seen, prices have only recently gotten high enough where developers are willing to even think about entering the market. This problem is lessened in a place like Minneapolis. If you added 500-1000 apartments to the market, you've increased availability by a mere 1/60th to 1/30th, so there probably won't be an impact on prices. Do that in Detroit and you've increased availability by 1/16 - 1/8. The impact on price would be way larger.

I agree with this. I think there is enough demand to see small increases, and we've seen that so far. Any developers considering coming have to be keeping an eye on how the current developments [[e.g., Statler, Book Cadillac) go. There are already plans for a few buildings, and we know the demand is there for a few but not if it's there for a "boom."

[MSUguy]

Really? The taxpayer subsidies have nothing to with level of demand? Thanks for the laugh! And the low rental rates downtown have nothing to do with demand either, I assume?

Then why are we handing them out? I assume DYes is leading the charge to end taxpayer subsidies, correct? Because demand is so great, no need for taxpayer dollars, and I'm sure the Manhattan/Hong Kong towers are on their way, any day now...

The Washington Post ran a story recently on how the success of Whole Foods in Detroit is pushing it to move to lower income neighborhoods. Whole Foods own number said the store shouldn't have built in that location and not surprisingly they got subsides to build it. And people like you questioned building it, citing the subsides as proof a lack of demand. They hit their 10 year sales goal in a little over a year and now we have talk of a potential second store in the city. My point is the need subsidies for certainly reflect beliefs about demand it doesn't mean they are 100% correlated to the actual levels of it.

http://www.washingtonpost.com/blogs/...ds-in-chicago/

[Bham1982]

The Washington Post ran a story recently on how the success of Whole Foods in Detroit is pushing it to move to lower income neighborhoods. Whole Foods own number said the store shouldn't have built in that location and not surprisingly they got subsides to build it. And people like you questioned building it, citing the subsides as proof a lack of demand. They hit their 10 year sales goal in a little over a year and now we have talk of a potential second store in the city. My point is the need subsidies for certainly reflect beliefs about demand it doesn't mean they are 100% correlated to the actual levels of it.

http://www.washingtonpost.com/blogs/...ds-in-chicago/

Whole Foods is Exhibit A of the subsidy train. It received millions in subsidies.

Whole Foods does not publicize sales by store unit, and there is no way of gauging relative store success. In any case, that store only exists because of subsidization.

[CrashDummy]

Whole Foods does not publicize sales by store unit, and there is no way of gauging relative store success.

I'm pretty sure the regional president has a way to gauge relative store success. And then he publicized it.

[dale02]

Only problem is, an amendment to the Michigan Constitution forbids eminent domain for private projects. Since the "district" will likely be owned by the Ilitches, this would get sticky. The eminent domain laws in Detroit are even more stringent. I wouldn't count on that happening.

The arena will be owned by the Detroit Downtown Development Authority, but it won't come to that because the three sites are not actually in the district footprint.

Here's a map:


The only building in the way is Hotel Park Avenue. From what I understand, the Ilitches have been in talks with developers to build and operate a proposed hotel on Fisher and Henry. Hopefully it's a higher-end brand. Given how ridiculous the land values will eventually get around all of this, I think they could afford to do something really nice. This also makes me think that Park Avenue will be gone, while Eddystone will be sold and redeveloped.

[dale02]

I was at the game on Sunday and there was a lot of Canadien fans that had made the trip to Detroit. Moving back to the Eastern Conference and being in the same division with Montreal and Toronto will be huge for having a hotel right next to the arena. Habs and Leafs fans travel very well.

[erikd]

Whole Foods is Exhibit A of the subsidy train. It received millions in subsidies.

Whole Foods does not publicize sales by store unit, and there is no way of gauging relative store success. In any case, that store only exists because of subsidization.

Businesses receive subsidies like this all the time. Here are a few examples of the same type of subsidies given to WalMart in suburban Chicago:

Here details the nonprofit provided about the subsidy packages for eight Wal-Mart locations in suburban Cook County.
Bridgeview: The village issued $6.7 million in bonds for improvements in the tax increment financing district, which benefited Wal-Mart as well as other stores and companies.
Country Club Hills: Wal-Mart was awarded a 50% property tax rebate and a 50% sales tax rebate through 2013. Based on local tax estimates, the property tax portion is likely worth $6.25 million and the sales tax portion $6 million.
Evergreen Park: Wal-Mart was awarded a 20-year sales tax rebate, taking effect five years after the store opened. All sales tax revenue above $550,000 will be refunded annually until $5.25 million has been rebated.
Glenwood: The Village of Glenwood is reimbursing Wal-Mart for development costs through tax increment financing. The maximum reimbursement amount is just over $2 million plus 4% interest per year from the date that Wal-Mart incurred the costs until they are repaid [[this includes any costs incurred before the redevelopment agreement went into effect).
Niles: The village of Niles extended an existing tax increment financing district to include a new Wal-Mart, designating the property a "blighted improved area." The ordinance did not include an estimate, but a consultant's report calculated that $2.9 million of improvements were needed.
Orland Hills: Wal-Mart will receive $12 million in sales tax rebates to pay for work on the development site. The Supercenter will be replacing an existing store in Orland Hills.
Palatine: Palatine officials agreed to provide property-tax increment financing worth $3.5 million for land acquisition, demolition, and building costs for this new store.
Rolling Meadows: This city gave a $5.3 million sales tax rebate to the developer of a shopping area anchored by a Wal-Mart and Sam's Club. Subsidies were for demolition costs.

http://www.chicagonow.com/chicago-muckrakers/2009/07/subsidies-have-diminished-the-economic-impact-of-suburban-wal-marts/

I am not a big fan of these types of subsidies, but the fact is that they are commonplace across the country, in cities, suburbs, and rural areas alike. It is disingenuous to call out Detroit for doing the exact same thing that is done by most municipalities across the county.

[emu steve]

Whole Foods is Exhibit A of the subsidy train. It received millions in subsidies.

Whole Foods does not publicize sales by store unit, and there is no way of gauging relative store success. In any case, that store only exists because of subsidization.

Have we not discovered that subsidies, like sin, exist all around us.

Isn't one of the biggest the subsidies the one Nevada gave Tesla [[for a huge battery factory). Think the subsidy might be bigger than the GDP of some small countries...

And weren't CA, NV, NM and AZ all competing hard, with subsidies, for Tesla's battery factory?

[animatedmartian]

Plenty of companies that exist in Oakland County [[as well as Wayne and Macomb) exist due to subsidies. In plenty of Crain articles, many companies, especially non-auto related, cite that they would have likely relocated to other states were it not for MEDC subsidies. Pretty much the only places in the country that don't have subsidies are places that don't have a thriving economy.

[ghettopalmetto]

Plenty of companies that exist in Oakland County [[as well as Wayne and Macomb) exist due to subsidies. In plenty of Crain articles, many companies, especially non-auto related, cite that they would have likely relocated to other states were it not for MEDC subsidies. Pretty much the only places in the country that don't have subsidies are places that don't have a thriving economy.

I don't buy that for a moment. Deep South states [[South Carolina, for one) give away the farm in tax breaks to large corporations like BMW and Boeing. The state's economy, to put it kindly, sucks.

There is a difference in whether subsidies are used for infrastructure improvements [[which are public goods that raise property values, increase development, and can be considered an investment) or blank-check tax giveaways [[which help the bottom line of a Chosen Company, and little else).

I'm still shaking my head over the Park Avenue building. Forty-five blocks of self-created scorched earth, and Olympia decides that this *one* building is "in the way". Just like the old Hudson's building was "in the way" of all sorts of pent-up development, but I digress. I'll be shocked if the DEGC cabal doesn't find money for Olympia to demo the Park Avenue. I mean, what's a few million bucks between friends?

[bailey]

I don't buy that for a moment. Deep South states [[South Carolina, for one) give away the farm in tax breaks to large corporations like BMW and Boeing. The state's economy, to put it kindly, sucks.

There is a difference in whether subsidies are used for infrastructure improvements [[which are public goods that raise property values, increase development, and can be considered an investment) or blank-check tax giveaways [[which help the bottom line of a Chosen Company, and little else).

I'm still shaking my head over the Park Avenue building. Forty-five blocks of self-created scorched earth, and Olympia decides that this *one* building is "in the way". Just like the old Hudson's building was "in the way" of all sorts of pent-up development, but I digress. I'll be shocked if the DEGC cabal doesn't find money for Olympia to demo the Park Avenue. I mean, what's a few million bucks between friends?

Building Hugger @buildinghuggerFollow
One of the biggest #detroit #citycouncil hearings over #redwings #arenadistrict and no one shows up??
4:24 PM - 20 Nov 2014 Detroit, MI, United States

Just two of Detroit's City Council members bothered showing up. Without a quorum, City Council was unable to ask questions or take action, though many preservationists still used the opportunity to support saving the buildings.

I really don't understand why you're shaking your head. Business as usual as far as I can tell.

[animatedmartian]

I don't buy that for a moment. Deep South states [[South Carolina, for one) give away the farm in tax breaks to large corporations like BMW and Boeing. The state's economy, to put it kindly, sucks.

There is a difference in whether subsidies are used for infrastructure improvements [[which are public goods that raise property values, increase development, and can be considered an investment) or blank-check tax giveaways [[which help the bottom line of a Chosen Company, and little else).

I'm still shaking my head over the Park Avenue building. Forty-five blocks of self-created scorched earth, and Olympia decides that this *one* building is "in the way". Just like the old Hudson's building was "in the way" of all sorts of pent-up development, but I digress. I'll be shocked if the DEGC cabal doesn't find money for Olympia to demo the Park Avenue. I mean, what's a few million bucks between friends?

What are you saying, Michigan subsidies don't work? Well, yea, because ours aren't as big as Southern states. Growth is matched by how big the subsidies are.

[Kathleen]

Time to rally round the Eddystone and Park Avenue Hotels!!!

Tuesday, November 25, at 9 AM – a public hearing, followed by a City Council meeting at 10 AM where it is expected that there will be a quorum. Join us at the Coleman A. Young Center, 13th floor, to comment.

Preservation Detroit's summary of the situation.....
http://preservationdetroit.org/2014/...ystone-hotels/

[erikd]

Whole Foods is Exhibit A of the subsidy train. It received millions in subsidies.

Whole Foods does not publicize sales by store unit, and there is no way of gauging relative store success. In any case, that store only exists because of subsidization.

Bham1982,

Since you are so upset about subsidies for companies moving into Detroit, what do you think about the state [[MEDC) and city of Southfield giving Covisint more than $1.7 Million in government subsidies to move 250 people from their Detroit office to Southfield? Their lease in the Compuware building was up, so the State of Michigan and City of Southfield gave them a fat government subsidy to move from Detroit to Oakland County.

The move — for weeks the subject of speculation in real estate circles — was confirmed today by the Michigan Economic Development Corp, which is providing Covisint with a $1.5 million performance-based grant to help the company settle in and not move to Austin, Texas or Raleigh, N.C.

The city of Southfield also will provide tax breaks worth an estimated $271,161.

http://www.freep.com/story/money/business/michigan/2014/11/25/covisint-move-detroit-southfield/70098824/

According to your logic, this must mean that the move into Southfield/Oakland County "only exists because of subsidization."

So which is it? You can't vilify the city for offering subsidies when the suburbs are doing the exact same thing.