Book Tower Lit Up- Renovations Starting Soon???

[MSUguy]

what will the building be converted into? Apartments? Offices?

We don't know yet. They haven't said what the exact mix of uses they plan on having in the building.

In addition to the bath, I noticed they have put new windows in the storefronts.

[DetroiterOnTheWestCoast]

We don't know yet. They haven't said what the exact mix of uses they plan on having in the building.

In addition to the bath, I noticed they have put new windows in the storefronts.

The "bath" and new storefront windows are nice - noticeable improvements from the start!

[brizee]

I might question how Gilbert attains ownership when so many bitch about "red tape".

And so much property in close proximity being in one entity's hands isn't ideal.

But I'll be damned if I'm not impressed by how fast the man moves on his properties.

There's no speculation, no endless press conferences, no promises then squat. He announces his intentions and usually in less than a year you see activity.

He's got this this and two other projects on Washington/Capitol Park going at the same time.

Meanwhile the people that bought the six story CPA building have let it rot for YEARS.

[corktownyuppie]

I might question how Gilbert attains ownership when so many bitch about "red tape".

I can tell you exactly how he attains ownership so quickly and why he can get projects done so fast.

CASH.

Most people, including myself, have enough cash to get a project started but not enough to finish it. So we look to other people [[either a bank or other investors) to loan us the rest of the money, with the intention of doing one of the following two things:

[[1) We finish the project. Sell the completed job to someone else. Pay off the loans, and pocket any money leftover as profits.

[[2) We finish the project. Hold the completed job and rent out the space. The rent is used to pay off the mortgage payments until it is either paid off or the property value has grown enough to try Option #1.

In both of these cases, the banks/investors are willing to lend the money as long as they have something as collateral. That's important, because if the project goes bad [[think Wayne County Fail Jail), or if the builder dies, or if people just stop paying, the bank needs to know that they can somehow get their money back.

The problem is that most banks don't want to take a construction project as collateral. Why?

- The cost of rehabbing an old building has wide variation. "Oh, it could cost somewhere between $50 million to $200 million" is not something that bank wants to hear.

- The value of a completed project has wide variation, "Oh, I think it'll be worth somewhere between $300-$700 million when it's done. But who knows...no one has lived in this building in 30 years" is not something that the bank wants to hear.

You look at the wide variation in cost...and then at the wide variation in end value....most banks say, "Sorry, we can't lend you the money, because we don't have enough confidence that we can get our money back if something goes wrong.

Enter Dan Gilbert.

He walks in an says to the seller, I will pay you in cash. No loans necessary, I can have your money in 7 days if you drop your price by 10%. They say yes.

He goes to the construction company and says, I will pay you in cash. No loans necessary. I will deposit all the money in an escrow account at the end of the month if you can start 30 days. They say sure.

All the red tape that normally slows things down? Gone.

I agree that I don't like having all of these buildings with such few owners. At the same time, as long as the owner is able to "get it done", I'm less worried. And the more buildings he owns, the easier it is for banks and other investors to feel comfortable lending. "Hey, if this project goes bad, then at least we can foreclose and then sell it to Gilbert to get our money back".

Voila. Downtown finally coming along.

The neighborhoods will soon follow...we're already seeing it happen down the between Jefferson and Mack from downtown all the way to the Pointes. It's gonna take another 10-20 years, but I foresee that entire area looking pretty good by then.