Detroit targets Park Ave. Bldg. for demolition

[emu steve]

So the City won't issue citations or enforce the building code, but they'll spend millions of taxpayer dollars to demolish [[yet another) historic building, *HOPING* that the land will be redeveloped???

Sometimes, I think Detroit has the absolute stupidest city government on the face of the planet.

I will FREELY admit I don't have a clue as to the dynamics at play here.

It appears that the building is unsafe, owned by an investor who has just 'sat' on the property for decades, and now the city wants to take action...

Question:

What is the 'end game' here?

Is the city trying to 'force the hand' of the owner? Redevelop or sell or tear it down?

Does Ilitch want to buy it after it has been demolished? [Even though it is in the 'sports and entertainment district' I see it as a 'peripheral' parcel, not key, to his 'Columbia' development plans.]

Is the land worth more with the building demolished?

Anyone interested in re-developing the property?

I can't figure out what will happen here...

[animatedmartian]

I will FREELY admit I don't have a clue as to the dynamics at play here.

It appears that the building is unsafe, owned by an investor who has just 'sat' on the property for decades, and now the city wants to take action...

Question:

What is the 'end game' here?

Is the city trying to 'force the hand' of the owner? Redevelop or sell or tear it down?

Does Ilitch want to buy it after it has been demolished? [Even though it is in the 'sports and entertainment district' I see it as a 'peripheral' parcel, not key, to his 'Columbia' development plans.]

Is the land worth more with the building demolished?

Anyone interested in re-developing the property?

I can't figure out what will happen here...

Vacant land is often more valuable than vacant crumbling buildings. This is true in any and every city. In fact, if the city were to gain ownership, then it'd become a liability and if some poor soul gets hit by a falling brick, the city has to take responsibility.

It doesn't matter if Ilitch plans to buy the land or not. The fact is that Park Avenue can't exist as a vacant/crumbling building. Either Sachs renovates it, sells it, or it gets demolished.

The reason that the city doesn't seize the building and auction it like a neighborhood houses is mostly because the downtown landowners have more money and can afford better lawyers. It takes upwards a a couple of months for the city to get a house if the owner puts up a fight. For a downtown high rise, it will take years if not decades while still at the taxpayer's expense. Otherwise, it'd be easy and the city would have done it many times.

Of course I'm upset that Detroit is losing another building, but Sachs is the one to blame for letting it get this way. The city is doing what it's supposed to be doing.

[Mackinaw]

Vacant land is often more valuable than vacant crumbling buildings. This is true in any and every city. In fact, if the city were to gain ownership, then it'd become a liability and if some poor soul gets hit by a falling brick, the city has to take responsibility.

It doesn't matter if Ilitch plans to buy the land or not. The fact is that Park Avenue can't exist as a vacant/crumbling building. Either Sachs renovates it, sells it, or it gets demolished.

The reason that the city doesn't seize the building and auction it like a neighborhood houses is mostly because the downtown landowners have more money and can afford better lawyers. It takes upwards a a couple of months for the city to get a house if the owner puts up a fight. For a downtown high rise, it will take years if not decades while still at the taxpayer's expense. Otherwise, it'd be easy and the city would have done it many times.

Of course I'm upset that Detroit is losing another building, but Sachs is the one to blame for letting it get this way. The city is doing what it's supposed to be doing.

You really need to back this up with legal citations. Why would it take longer for the City to establish its right to have the building demolished than to establish its right to seize ownership, on account of the same reasons [[dangerous condition, i.e. blight in every sense of the word). Per Michigan Supreme Court, a municipality can take property that is in fact blighted, but may not take land solely for economic redevelopment [[i.e. the Kelo case). If it can obtain an order for the teardown of a building because it is blighted [[or unsafe, etc.), it can seemingly obtain an order transferring title in exchange for reasonable compensation.

I am no Michigan legal expert, but this is the basics as I know it. It really is a question of the City's policy priorities. We can even add in a cost-benefit analysis, too. Is the cost of demolition more or less than the cost of reasonable compensation to Sachs? Maybe not, and certainly not when you take into account the cost of lost history and Kahn architecture.

[animatedmartian]

You really need to back this up with legal citations. Why would it take longer for the City to establish its right to have the building demolished than to establish its right to seize ownership, on account of the same reasons [[dangerous condition, i.e. blight in every sense of the word). Per Michigan Supreme Court, a municipality can take property that is in fact blighted, but may not take land solely for economic redevelopment [[i.e. the Kelo case). If it can obtain an order for the teardown of a building because it is blighted [[or unsafe, etc.), it can seemingly obtain an order transferring title in exchange for reasonable compensation.

I am no Michigan legal expert, but this is the basics as I know it. It really is a question of the City's policy priorities. We can even add in a cost-benefit analysis, too. Is the cost of demolition more or less than the cost of reasonable compensation to Sachs? Maybe not, and certainly not when you take into account the cost of lost history and Kahn architecture.

Sachs can reject whatever amount of compensation the city offers him, can't he? I don't doubt that he'd want more than what the building is actually worth.

[emu steve]

... Per Michigan Supreme Court, a municipality can take property that is in fact blighted, but may not take land solely for economic redevelopment [[i.e. the Kelo case). If it can obtain an order for the teardown of a building because it is blighted [[or unsafe, etc.), it can seemingly obtain an order transferring title in exchange for reasonable compensation.

I am no Michigan legal expert, but this is the basics as I know it...

Is this really true? Could the city have bought dozens of buildings in downtown or Midtown [[e.g., the now demolished Temple Hotel? The two high rise buildings on Cass near the arena footprint, Hotel Americana?, etc etc.). Blighted but safe? Is the building discussed in this thread not blight but UNsafe?

Can Detroit seize any blighted building even if taxes are being paid?

I'd love to see some case law.

Believe me, I know nothing about this type of real estate law so I'm just asking...

EDIT:

I went to Wikipedia and read Kelo. This is what Wikipedia says about MI law:

Michigan

Michigan passed a restriction on the use of eminent domain in November 2006, Proposition 4, 80% to 20%.^[42] The text of the ballot initiative was as follows:^[43]

A proposed constitutional amendment to prohibit government from taking private property by eminent domain for certain private purposes
The proposed constitutional amendment would:

• Prohibit government from taking private property for transfer to another private individual or business for purposes of economic development or increasing tax revenue.
• Provide that if an individual's principal residence is taken by government for public use, the individual must be paid at least 125% of property’s fair market value.
• Require government that takes a private property to demonstrate that the taking is for a public use; if taken to eliminate blight, require a higher standard of proof to demonstrate that the taking of that property is for a public use.
• Preserve existing rights of property owners.

***********

[313WX]

Is this really true?

Can Detroit seize any blighted building even if taxes are being paid?

I would assume there's some protocol [[though maybe not as extreme as outright forfeiture) in place to target property owners who aren't keeping their buildings up to code.

The problem with Detroit is that, because it's been so broke and dysfunctional for so long, it hasn't actually been enforcing these codes like it should. These owners are well aware that they can get away with not maintaining their properties, at least for a long time.

And even if these code violations were eventually taken to court, there's the risk of wasting a lot of money on litigation just to ultimately inherit a relatively undesirable and worthless property the city itself can't afford to take care of.

[ghettopalmetto]

I would assume there's some protocol [[though maybe not as extreme as outright forfeiture) in place to target property owners who aren't keeping their buildings up to code.

The problem with Detroit is that, because it's been so broke and dysfunctional for so long, it hasn't actually been enforcing these codes like it should. These owners are well aware that they can get away with not maintaining their properties, at least for a long time.

And even if these code violations were eventually taken to court, there's the risk of wasting a lot of money on litigation just to ultimately inherit a relatively undesirable and worthless property the city itself can't afford to take care of.

But seizing and demolishing the property of a private entity...that won't involve any litigation whatsoever, will it?

[313WX]

But seizing and demolishing the property of a private entity...that won't involve any litigation whatsoever, will it?

I'm not sure how the exact litigation process will play out, but according to the article, the city is taking "legal action" to seize and demolish this property [[which included a court case filing in the Wayne County Circuit Court).

[erikd]

Vacant land is often more valuable than vacant crumbling buildings. This is true in any and every city.

This is a blanket generalization that is only generally true because most of the built environment in modern America consists of crappy single-use structures, constructed with cheap materials, which are not well-suited for renovation or re-use.

However, this generalization rarely applies to downtown Detroit. It is obvious that vacant historic buildings in downtown Detroit are far more valuable and attractive to developers than vacant lots are.

The vast majority of the development in downtown Detroit over the last 10 years has happened in existing buildings, many of which sat vacant and run-down for decades. Conversely, the amount of new construction on cleared downtown lots over the same period [[save for a couple massive special-use casino/stadium projects) has been virtually nil.

Everything that we have seen over the last decade proves that buildings like the Park Ave are much more likely to attract development if they are left standing than if they are demolished.

Speculative demolition of historic buildings, based on the misguided hope that the property would be more attractive as an empty lot, has proven to be a total failure in downtown Detroit. It is mind-boggling that anybody familiar with development in downtown Detroit would continue to support this counter-productive process.

[animatedmartian]

This is a blanket generalization that is only generally true because most of the built environment in modern America consists of crappy single-use structures, constructed with cheap materials, which are not well-suited for renovation or re-use.

However, this generalization rarely applies to downtown Detroit. It is obvious that vacant historic buildings in downtown Detroit are far more valuable and attractive to developers than vacant lots are.

The vast majority of the development in downtown Detroit over the last 10 years has happened in existing buildings, many of which sat vacant and run-down for decades. Conversely, the amount of new construction on cleared downtown lots over the same period [[save for a couple massive special-use casino/stadium projects) has been virtually nil.

Everything that we have seen over the last decade proves that buildings like the Park Ave are much more likely to attract development if they are left standing than if they are demolished.

Speculative demolition of historic buildings, based on the misguided hope that the property would be more attractive as an empty lot, has proven to be a total failure in downtown Detroit. It is mind-boggling that anybody familiar with development in downtown Detroit would continue to support this counter-productive process.

And yet the condos in Brush Park were built long before anyone touched Hotel Eddystone or Park Avenue Hotel.

I'm not saying the vacant buildings should be demolished on speculation, but that the buildings will remain vacant until the market supports the costs of redeveloping them to a satisfactory condition. Unless you want them to be renovated into public housing projects then they'll get renovated tomorrow with minimal restoration if any at all. But if people want the "grandeur" and quality that the buildings used to have, then Detroit's luxury market will have to greatly expand for developers to get a reasonable ROI for that quality. Who knows how long we'd be waiting for that point all the while the building still isn't being maintained and sits vacant. In the mean time, developers can build whatever the current market supports on vacant land and get a reasonable ROI.

Much like how there's a current proposal for 250 apartments in the new Statler City project and yet only 105 apartments with the renovation of David Whitney next door. DW's renovation costs $85 million compared to Statler City's new construction of $45 million. All the while, Park Avenue, Cadillac Tower, David Stott, United Artists, and the Wulitzer all still sit vacant with undetermined futures. Why is there new construction at all if these older vacant buildings aren't being utilized?

[ghettopalmetto]

And yet the condos in Brush Park were built long before anyone touched Hotel Eddystone or Park Avenue Hotel.

I'm not saying the vacant buildings should be demolished on speculation, but that the buildings will remain vacant until the market supports the costs of redeveloping them to a satisfactory condition. Unless you want them to be renovated into public housing projects then they'll get renovated tomorrow with minimal restoration if any at all. But if people want the "grandeur" and quality that the buildings used to have, then Detroit's luxury market will have to greatly expand for developers to get a reasonable ROI for that quality. Who knows how long we'd be waiting for that point all the while the building still isn't being maintained and sits vacant. In the mean time, developers can build whatever the current market supports on vacant land and get a reasonable ROI.

Much like how there's a current proposal for 250 apartments in the new Statler City project and yet only 105 apartments with the renovation of David Whitney next door. DW's renovation costs $85 million compared to Statler City's new construction of $45 million. All the while, Park Avenue, Cadillac Tower, David Stott, United Artists, and the Wulitzer all still sit vacant with undetermined futures. Why is there new construction at all if these older vacant buildings aren't being utilized?

It's not an either/or game between reuse of existing structures and construction of new structures. That's been the critical flaw in downtown development. The answer: You do both. Otherwise, Detroit ends up looking like a Rust Belt Phoenix, as has been noted above.

The only time there is an *immediate* need to demolish an entire building is when the primary structural systems are in danger of imminent collapse. This kind of determination requires a structural engineer [[licensed and registered Professional Engineer in the State of Michigan). Alas, when was the last time you saw a signed-and-sealed report recommending that a building be demolished due to danger of imminent collapse?

If this is not the case, you're just spending millions of dollars to chase a dragon. Unfortunately, Detroit for years has allowed DEGC and George Jackson to tie the tourniquet while Mike Ilitch and others administer the injection. At this point, the city is enslaved to its demolition monkey, and there's no turning back until the addict hits rock bottom.

[animatedmartian]

It's not an either/or game between reuse of existing structures and construction of new structures. That's been the critical flaw in downtown development. The answer: You do both. Otherwise, Detroit ends up looking like a Rust Belt Phoenix, as has been noted above.

The only time there is an *immediate* need to demolish an entire building is when the primary structural systems are in danger of imminent collapse. This kind of determination requires a structural engineer [[licensed and registered Professional Engineer in the State of Michigan). Alas, when was the last time you saw a signed-and-sealed report recommending that a building be demolished due to danger of imminent collapse?

If this is not the case, you're just spending millions of dollars to chase a dragon. Unfortunately, Detroit for years has allowed DEGC and George Jackson to tie the tourniquet while Mike Ilitch and others administer the injection. At this point, the city is enslaved to its demolition monkey, and there's no turning back until the addict hits rock bottom.

So how many years are we going to wait until all the vacant buildings are reused? There's still a dozen highrise and even more smaller buildings than have yet to see any sort of rehabilitation. At least with vacant land, I don't have to constant look at the same blight for dozens of years only *hoping* someone comes to reuse it. I'm not understand how it's not speculative to expect developers to come in and announce that they're going to renovate these buildings tomorrow when so many buildings [[even when they do get that announcement) still stand vacant. 10 years is 9 years too many for a building to be vacant.

[ghettopalmetto]

So how many years are we going to wait until all the empty lots are occupied? There's still a dozens of lots that have yet to see any sort of proposal. At least with vacant buildings, I don't have to constant look at the same blight for dozens of years only *hoping* someone comes to build on it. I'm not understand how it's not speculative to expect developers to come in and announce that they're going to build on an empty lot tomorrow when so many lots [[even when they do get that announcement) still stand vacant. 10 years is 9 years too many for a lot to be vacant.

See what I did there?

Your completely arbitrary criterium of "1 year" as a limit for vacancy goes against every principle of construction finance. On what do you base this opinion--your vast professional experience?

Empty buildings, as opposed to empty lots, have intrinsic value--hundreds of thousands of dollars worth of materials and man-hours of labor already staring you in the face [[even if some repairs are necessary). Foundations, floor plates, vertical load-bearing members, lateral-load resisting systems...these are things that empty lots don't have, which cost LOTS of $$$ to construct. Thus, when you demolish a building, you're destroying the value of the materials [[which were paid for long ago) and all the man-hours of labor [[again, already paid).

If no one is building on the Hudson's site [[which, IMHO, is *the* prime empty lot downtown, due to its location, and abundance of free on-site parking), then why would someone build new on the Park Avenue site? Even if they did--the White Castle or whatever cheap hunk of shit that does get constructed will in no way even begin to compare to the value that was destroyed.

No city in human history--NONE--has ever thrived as a result of clear-cutting, scorched-earth speculative demolition. Spending money to destroy intrinsic value and achieve negative returns is just stupid at best.

[DetroiterOnTheWestCoast]

And yet the condos in Brush Park were built long before anyone touched Hotel Eddystone or Park Avenue Hotel.

I'm not saying the vacant buildings should be demolished on speculation, but that the buildings will remain vacant until the market supports the costs of redeveloping them to a satisfactory condition. Unless you want them to be renovated into public housing projects then they'll get renovated tomorrow with minimal restoration if any at all. But if people want the "grandeur" and quality that the buildings used to have, then Detroit's luxury market will have to greatly expand for developers to get a reasonable ROI for that quality. Who knows how long we'd be waiting for that point all the while the building still isn't being maintained and sits vacant. In the mean time, developers can build whatever the current market supports on vacant land and get a reasonable ROI.

Much like how there's a current proposal for 250 apartments in the new Statler City project and yet only 105 apartments with the renovation of David Whitney next door. DW's renovation costs $85 million compared to Statler City's new construction of $45 million. All the while, Park Avenue, Cadillac Tower, David Stott, United Artists, and the Wulitzer all still sit vacant with undetermined futures. Why is there new construction at all if these older vacant buildings aren't being utilized?

Why is there new construction if there are older vacant buildings not being utilized? Because as ghettopalmetto said, its not just an "either or game." But clearly there has been much more demand and progress in renovating downtown than in building on cleared land. The Statler Hotel was torn down in 2005. It's now 2014 and there is a proposal for the site. Only 9+ years after demo [[and has anything been built downtown on any land cleared since then?).

The lofts on Woodward stare out at the vacant Hudson site. Kales, Broderick, Whitney all have been reborn at Grand Circus while the Tuller site has sat empty for over 20 years. And btw, while the Whitney will have far fewer residential units than Statler City, the former is also going the be a hotel.

With so much vacant land already available around the arena site, every effort should be made to save structures such as the Eddystone and Park Avenue building so that there is a better mix in the area.

[erikd]

And yet the condos in Brush Park were built long before anyone touched Hotel Eddystone or Park Avenue Hotel.

I'm not saying the vacant buildings should be demolished on speculation, but that the buildings will remain vacant until the market supports the costs of redeveloping them to a satisfactory condition. Unless you want them to be renovated into public housing projects then they'll get renovated tomorrow with minimal restoration if any at all. But if people want the "grandeur" and quality that the buildings used to have, then Detroit's luxury market will have to greatly expand for developers to get a reasonable ROI for that quality. Who knows how long we'd be waiting for that point all the while the building still isn't being maintained and sits vacant. In the mean time, developers can build whatever the current market supports on vacant land and get a reasonable ROI.

Much like how there's a current proposal for 250 apartments in the new Statler City project and yet only 105 apartments with the renovation of David Whitney next door. DW's renovation costs $85 million compared to Statler City's new construction of $45 million. All the while, Park Avenue, Cadillac Tower, David Stott, United Artists, and the Wulitzer all still sit vacant with undetermined futures. Why is there new construction at all if these older vacant buildings aren't being utilized?

Your assertions are so off the mark and lacking validity it boggles my mind.

We are talking about the Park Ave building, which sits on Grand Circus Park, Next to the Kales, and across the park from the David Whitney and Broderick Towers, all of which have been renovated into very expensive and successful developments.

It is insane to look at the success of the building renovations on Grand Circus Park, and say "unless you want them to be renovated into public housing projects then they'll get renovated tomorrow with minimal restoration if any at all."
---------------------------------

"Much like how there's a current proposal for 250 apartments in the new Statler City project and yet only 105 apartments with the renovation of David Whitney next door. DW's renovation costs $85 million compared to Statler City's new construction of $45 million. All the while, Park Avenue, Cadillac Tower, David Stott, United Artists, and the Wulitzer all still sit vacant with undetermined futures. Why is there new construction at all if these older vacant buildings aren't being utilized?"

When the Statler project goes from a proposal to an actual development, I will recognize and credit it.

For a moment, let's put aside the generally accepted theory of redevelopment and look at how the reality has played out. Grand Circus Park was ringed with buildings that were vacant for decades, and we have seen the results of demolition vs preservation.

The Adams Theater, Kales, Park Ave, Tuller, United Artists, Statler, David Whitney, and Broderick Tower all went vacant and sat empty for decades.

The Adams, Tuller, and Statler were demolished years ago, which the hope that their destruction would lead to development. They have all been sitting as undeveloped, blighted, vacant eyesore lots filled with weeds and garbage in all the years since. The Kales, David Whitney, and Broderick Tower also sat vacant for decades, but have recently been beautifully renovated, and restored back into thriving and productive buildings.

The fate of the United Artists and Park Ave buildings is yet to be determined, but it would seem to be obvious that we should go with the 3 for 3 success of leaving the old vacant buildings up for redevelopment, vs the 0 for 3 failure of tearing them down and hoping that destroying irreplaceable buildings to create even more vacant lots in Detroit will somehow beat the odds and bring the investment dollars pouring in.

[rjlj]

Strongly agree.

This is a blanket generalization that is only generally true because most of the built environment in modern America consists of crappy single-use structures, constructed with cheap materials, which are not well-suited for renovation or re-use.

However, this generalization rarely applies to downtown Detroit. It is obvious that vacant historic buildings in downtown Detroit are far more valuable and attractive to developers than vacant lots are.

The vast majority of the development in downtown Detroit over the last 10 years has happened in existing buildings, many of which sat vacant and run-down for decades. Conversely, the amount of new construction on cleared downtown lots over the same period [[save for a couple massive special-use casino/stadium projects) has been virtually nil.

Everything that we have seen over the last decade proves that buildings like the Park Ave are much more likely to attract development if they are left standing than if they are demolished.

Speculative demolition of historic buildings, based on the misguided hope that the property would be more attractive as an empty lot, has proven to be a total failure in downtown Detroit. It is mind-boggling that anybody familiar with development in downtown Detroit would continue to support this counter-productive process.