New life for the Book

[rjlj]

esp1986, Can you elaborate on the structural problems the Lafayette had? Do you have the study that was completed that detailed these issues and deemed the building ripe for demo?

[Johnlodge]

esp1986, Can you elaborate on the structural problems the Lafayette had? Do you have the study that was completed that detailed these issues and deemed the building ripe for demo?

I have a better idea, instead of having the exact same debate again, go ask on this thread [[or read what was already posted):

http://detroityes.com/mb/showthread.php?t=2143&page=7

And save this thread for the topic in the title.

[ghettopalmetto]

The Lafayette had other problems, mostly structural. The cost of fixing the structure outweighed any potential benefit that the building could have provided.

That's speculation on your part. To my knowledge, there is no report from a licensed Professional Engineer regarding any structural deficiencies of the Lafayette Building. When you find it, please let me know, because I'd like to read it.

The point is, the Book building has been maintained. Granted, it may not be top-of-the-line space, but specifically because it has been maintained by its owners and not allowed to fall into disrepair, you have people willing to invest $350 million into its renovation.

The Layfayette would have had greater viability had the City of Detroit not conducted Demoliction by Neglect.

And since when does John Ferchill get to write the Gospel? He may have had an $11 million financing gap. Someone else might have been able to make the project work, much as Ferchill was able to make the Book-Cadillac deal work when others couldn't.

I hope DEGC is paying real good attention to what will be happening with the Book building. Those self-righteous pricks could learn a thing or two about redevelopment.

[esp1986]

esp1986, Can you elaborate on the structural problems the Lafayette had? Do you have the study that was completed that detailed these issues and deemed the building ripe for demo?

I do not have this info, nor do I know what the problems were. Click on the link I posted above though. It talks about John Ferchill and a study he had done on it. After he and a couple of other groups, including Quicken, balked at the prospect of it, the DEGC then decided to tear it down. In the past few years, a few groups have looked at it and all determined it to be too costly. It was offered to Quicken for $1 and they wouldn't even buy it. They spent years marketing it with no luck, even with Ferchill who took over renovation of the Book-Cadillac after someone else walked away for similar reasons, decided it couldn't be done, which is why it was brought down.

The Lafayette was not brought down because of the lack of structural integrity, but rather because a use could not be found, and it was going to sit open to the elements for even longer, further deteriorating it, making it even costlier to restore. The structure is the reason they could not find a use for it and they decided it was time to stop spending the time and money marketing the building.

I think the Book-Cadillac across the street is a big reason that they decided to finally go ahead with it after all of these years. I mean, no one wants to stay at a four-star hotel and look out their windo to see an abandoned building.

[esp1986]

That's speculation on your part. To my knowledge, there is no report from a licensed Professional Engineer regarding any structural deficiencies of the Lafayette Building. When you find it, please let me know, because I'd like to read it.

The point is, the Book building has been maintained. Granted, it may not be top-of-the-line space, but specifically because it has been maintained by its owners and not allowed to fall into disrepair, you have people willing to invest $350 million into its renovation.

The Layfayette would have had greater viability had the City of Detroit not conducted Demoliction by Neglect.

And since when does John Ferchill get to write the Gospel? He may have had an $11 million financing gap. Someone else might have been able to make the project work, much as Ferchill was able to make the Book-Cadillac deal work when others couldn't.

I hope DEGC is paying real good attention to what will be happening with the Book building. Those self-righteous pricks could learn a thing or two about redevelopment.

I am with you... sometimes I wonder how George Jackson got his job.

Let me point out though that the Book renovation will not be a $320 million one. That is for all of their "projects." It will likely be less than $100 million.

[Toolbox]

Where is the funding for this project coming from? Where is the demand for units? Brush Park is becoming a ghost town and nothing there is moving.

[MotownSpartan]

My hopes have been raised so many times with "development" announcements in this city. I really hope this one actually comes to fruition.

[esp1986]

Where is the funding for this project coming from? Where is the demand for units? Brush Park is becoming a ghost town and nothing there is moving.

Look at the Book-Cadillac. There is some demand for more upscale places. Once the Book-Cadillac dropped their prices, they have been selling pretty well, as only 15-20 remain... Only 6 were sold when the prices were dropped about 6 months ago. There is a total of 67 units there. I think the belief is that if the economy recovers, the demand will rise, we will see.

[Gsgeorge]

They better not make the mistake of marketing these places as luxury condos. That is precisely the problem with Brush Park & Book Cadillac. Who would want to invest more than $250,000 in a Detroit residence? You'd have to be crazy. I don't care how old your Brush Park brownstone is, or how good your view is. Detroit needs to be marketed to young renters, college grads, artists, and the "creative class". Otherwise you're fishing for freshwater trout in the Salton Sea.

[esp1986]

They better not make the mistake of marketing these places as luxury condos. That is precisely the problem with Brush Park & Book Cadillac. Who would want to invest more than $250,000 in a Detroit residence? You'd have to be crazy. I don't care how old your Brush Park brownstone is, or how good your view is. Detroit needs to be marketed to young renters, college grads, artists, and the "creative class". Otherwise you're fishing for freshwater trout in the Salton Sea.

Hopefully they will be between 100,000 and 200,000 each, for most of them anyway. The only problem is, that to make up the significant cost of the investment, they won't be cheap.

[MotownSpartan]

They better not make the mistake of marketing these places as luxury condos. That is precisely the problem with Brush Park & Book Cadillac. Who would want to invest more than $250,000 in a Detroit residence? You'd have to be crazy. I don't care how old your Brush Park brownstone is, or how good your view is. Detroit needs to be marketed to young renters, college grads, artists, and the "creative class". Otherwise you're fishing for freshwater trout in the Salton Sea.

I really agree with this sentiment. The prime market for someone who wants to move into "downtown" is recent college grads, artists, young renters and other creative class types who can't afford high-end rents or purchase prices. Once all these types of people move to downtown it will create the environment that allows the developer to raise rents or invest in other higher end projects.

[d.mcc]

I really agree with this sentiment. The prime market for someone who wants to move into "downtown" is recent college grads, artists, young renters and other creative class types who can't afford high-end rents or purchase prices. Once all these types of people move to downtown it will create the environment that allows the developer to raise rents or invest in other higher end projects.

And I can attest that there are quiet a few young people of the recent college grad ilk, who would stay in Detroit if there were opportunities [[cheaper) for safe and comfortable city living...

[mwilbert]

There is no chance that a renovated Book is going to provide cheaper city living than is already there, not unless the developers build it and then go bankrupt. If it only cost them 50 million to renovate the space and they ended up with 250 units, they would be $200,000 each with no profit. There are lots of places downtown cheaper than that.

[Lorax]

I really agree with this sentiment. The prime market for someone who wants to move into "downtown" is recent college grads, artists, young renters and other creative class types who can't afford high-end rents or purchase prices. Once all these types of people move to downtown it will create the environment that allows the developer to raise rents or invest in other higher end projects.

Great statement. What is lost on many developers is with all the vacant space in Detroit, there is no reason every building on lower Woodward as an example, with loft style spacing above former storefronts shouldn't be rented out as raw space to this demographic in the 500 per month range for 2-3000 square feet.

You would have a younger class renting here, dealing with the lack of affordable safe parking, and soon their numbers would demand more coffee shops, restaurants, etc.

Bottom line is everything is still too expensive for the market.

I have been looking for up to 6000 square feet at storefront level in Detroit, and can't find anything decent under 2500 per month. I should at this point have my pick of these spaces for 1200 per month.

I know there may be certain tax incentives to keeping spaces vacant, but even that runs out in time, and wouldn't a landlord rather have an occupied space than a vacant one? All I can say is that business must be good!

[ghettopalmetto]

Great statement. What is lost on many developers is with all the vacant space in Detroit, there is no reason every building on lower Woodward as an example, with loft style spacing above former storefronts shouldn't be rented out as raw space to this demographic in the 500 per month range for 2-3000 square feet.

You would have a younger class renting here, dealing with the lack of affordable safe parking, and soon their numbers would demand more coffee shops, restaurants, etc.

Bottom line is everything is still too expensive for the market.

I have been looking for up to 6000 square feet at storefront level in Detroit, and can't find anything decent under 2500 per month. I should at this point have my pick of these spaces for 1200 per month.

I know there may be certain tax incentives to keeping spaces vacant, but even that runs out in time, and wouldn't a landlord rather have an occupied space than a vacant one? All I can say is that business must be good!

How do you propose to cover construction costs if you rent space at the unheard-of rates of $2-3 per square foot?

And are you really complaining that you can't find retail space for less than $5 per square foot? Sounds like your business plan might need some work.

[Detroitej72]

If I were a landlord, I'd rather have someone renting space to cover the taxes than it sitting empty and paying the costs myself.

Just my two cents worth.

[Toolbox]

Great statement. What is lost on many developers is with all the vacant space in Detroit, there is no reason every building on lower Woodward as an example, with loft style spacing above former storefronts shouldn't be rented out as raw space to this demographic in the 500 per month range for 2-3000 square feet.

There was plenty of space like that 10-15 years ago in Detroit, then everyone went luxury style loft space. Most young people do not know that a true loft is 4 walls and a bathroom.

[mwilbert]

If I were a landlord, I'd rather have someone renting space to cover the taxes than it sitting empty and paying the costs myself.

Just my two cents worth.

Well, you might, but have you ever had a tenant? Possibly one who doesn't live up to your standards of conduct?

Most young people aren't interested in renting a commercial space; they would want a living or live/work space, and the downtown buildings weren't built to be residential. Bringing them up to even minimal compliance with modern residential codes would probably not be cheap, so the spaces wouldn't end up being cheap. I don't even know if zoning allows residential uses along lower Woodward.

I agree that there is probably a market for such spaces, and it would be nice if somebody would try to develop some low-end downtown raw space and see if it works. I don't know if you can do it cheaply enough to meet the market, but it would be interesting to find out.

[Doma]

Louis Aguilar / The Detroit News

Detroit -- A Clinton Township investment group says it signed a contract with the owners of the empty Book Tower and Building to turn the historic downtown structure into 260 green-friendly residences and retail.
Key Investment Group says it intends to begin working on renovating the Washington Boulevard space in June. It could take up to three years to overhaul the early 20th century building into an energy-efficient structure, while retaining historical details. The building has been empty since January. "We have a firm contract signed with the owners," said RoseMarie Dobek, CFO of Key Investment Group.

The announcement was made Wednesday afternoon during a meeting of the Detroit City Council's Green Task Force, an advisory group put together by Council President Kenneth Cockrel Jr.

After the meeting, Dobek said the investment group intends to purchase the Book site and plans to close on the deal in a matter of weeks. The current owner is AKNO Enterprises of Vancouver, B.C. The building has changed hands several times in recent years.

Developer John Ferchill, who put together the $200 million renovation of the nearby Westin Book Cadillac, also is interested in the Book Building. Ferchill said last week he was still hoping to find financing but the current economic climate was making it tough. Other would-be developers also have been stymied by an inability to secure financing, which made Key Investment Group's announcement a bit of a surprise.

Key Investment Group says the Book renovation is the first of six projects that will bring 970 new sustainable residences to the city. Five are downtown and the other is on the east side.

The total investment for all of those projects amounts to $320 million. "We are the final phase of securing the financing for all six of those projects," Dobek said, who added the investment group intends to move downtown. The Book development, which still will have to go through the city's regulatory process, could include a new copper roof, a green roof plaza, restoration of an interior atrium and a complete facade cleaning, Dobek said.

[leland_palmer]

Welcome to the discussion.

http://detroityes.com/mb/showthread.php?t=3223

[Lorax]

How do you propose to cover construction costs if you rent space at the unheard-of rates of $2-3 per square foot?

And are you really complaining that you can't find retail space for less than $5 per square foot? Sounds like your business plan might need some work.

No one is proposing new construction costs for currently vacant space. If landlords are in the mood to lease their spaces, cost is always the determining factor.

Something is only worth what someone is willing to pay for it.

If commercial space whether ground floor or above is not leasing at 15-20 bucks psf, then perhaps lowering it may generate interest.

Empty space indicates a wealthy landlord unwilling to get realistic about pricing.

With the cost of doing business, especially in light of the current economy, leases can [[and always should) be fluid documents.

I can point you toward dozens of vacant storefronts in Miami Beach currently for lease by landlords who are still thinking they can get high rents, when in reality the costs of starting up a new, or moving an existing business need to be considered, and getting the least expensive rental rate is key.

If Detroit's zoning laws and the lack of services/police are in the way of getting rates based on national averages, then rents need to fall into the single digits to attract someone willing to take the chance.

I would consider opening a branch of one of my businesses in Detroit [[a retail furniture line built overseas) providing a solid ground floor tenant for an existing building, but I need 6,000 square feet to do it, minimum.

I would love to be in the Fisher or Cadillac Place building as an example, or even the Albert Kahn Building, but need rates competitive with what I can lease an existing vacant building in the suburbs, which is considerable less at the moment.

A friend rents a showroom of 2000 square feet in downtown Birmingham right now for 1400 a month.

I will keep searching, as there is no immediate time table, it's just a thought at this time, but my leases as they come up here in Florida will be renewed at much lower rates than we're paying now.

A great example of this kind of investor who thinks rates are suppose to be sky high- a 2000 square foot storefront here on US1 in Miami in a stretch which you could consider "ghettoish" was renovated with large windows and cleaned up interior and new AC unit, had only three parking spaces, no street parking since it's a busy throughfare, so parking for patrons would need to be on side streets or a block or two down from the store.

It is surrounded by vacant stores and a giant vacant restaurant across the street which closed after 50 years, the windows of the storefront routinely get tagged with spray paint, and guess what the rental rate was for 2000 square feet?

7500.00 month!

He said he could do 7000 a month, and I said GOOD LUCK!

That discussion was 3 years ago, and it's still vacant.

With surrounding storefronts leasing for 700-1000 per month, this is typical of what I'm talking about. I can point to dozens of landlords who think this way. Washington Street in Miami Beach currently has 37 vacant storefronts of varying sizes, all of them on the smallish sided within a 14 block stretch.

I don't know generally how Detroit landlords respond typically to tenants seeking space, but if someone is willing to take raw space, pay for a buildout, then the groundfloor space, say on lower Woodward downtown should be certainly less than 10 bucks psf.

I'm just sayin'!

[mwilbert]

I have been looking for up to 6000 square feet at storefront level in Detroit, and can't find anything decent under 2500 per month. I should at this point have my pick of these spaces for 1200 per month.

seems rather different from

I don't know generally how Detroit landlords respond typically to tenants seeking space, but if someone is willing to take raw space, pay for a buildout, then the groundfloor space, say on lower Woodward downtown should be certainly less than 10 bucks psf.

As you know, $1200 would be less than $3/ft. $2500 would be $5/ft. Both of those are a lot less than $10/ft. I guess I'm a bit confused as to what you actually think people should be charging for this space vs. what they are actually asking.

[DetroitDad]

First, this is great news for Downtown, even though I have some issue with calling any skyscraper or high rise "green". I guess green is just a buzzword now?

Great statement. What is lost on many developers is with all the vacant space in Detroit, there is no reason every building on lower Woodward as an example, with loft style spacing above former storefronts shouldn't be rented out as raw space to this demographic in the 500 per month range for 2-3000 square feet.

You would have a younger class renting here, dealing with the lack of affordable safe parking, and soon their numbers would demand more coffee shops, restaurants, etc.

Bottom line is everything is still too expensive for the market.

I have been looking for up to 6000 square feet at storefront level in Detroit, and can't find anything decent under 2500 per month. I should at this point have my pick of these spaces for 1200 per month.

I know there may be certain tax incentives to keeping spaces vacant, but even that runs out in time, and wouldn't a landlord rather have an occupied space than a vacant one? All I can say is that business must be good!

Well, I think $500 is a little low, I agree with your basic premise. Recently, we are [[finally) looking to move, and went on a showing at the "Lofts" of Merchant's Row, several lower Woodward buildings that were in fact converted to "lofts". Now, DetroitMom and I pretty much scratched these luxury lofts right of the list right away. For one, luxury lofts aren't really lofts, they're apartments with painted cement floors, exposed duct and brick work, and with bedroom walls that don't extend to the ceiling. Now, for some reason the price is almost double that of non-loft comparable apartment buildings. I said comparable, but the other buildings seemed nicer with better amenities and appliances.

The price for a two bedroom at Merchant's Row was discounted to $1,450 for a two bedroom, but we were told the normal price was $1,835. DetroitMom and I really couldn't understand who would pay that much to live there. They must be priced that high for the location, which might be really nice someday.... but today, it is a nice street with a bunch of vacant retail and a ten year old building foundation across the street. That is to say, the location doesn't make it worth that much, as much as I hate to say it. We really only looked at the lofts because we thought it would be kind of neat for our young daughter to be able to look out her window and see the parade on Thanksgiving morning. However, the parade is only once a year.

PS: DetroitMom wanted me to add that the lofts were also horribly decorated in bright colors and bland grains, something that supposedly does not appeal to the millennial generation, and definitely did not appeal to us.

[buildingsofdetroit]

Added a history and a ton of photos - both from the roof and of the architectural detail - of the Book Tower and Building:
www.buildingsofdetroit.com/places/book

Thank God for candy: It's the only way I'm still going at what would otherwise be 5 a.m.

[Meddle]

For one, luxury lofts aren't really lofts, they're apartments with painted cement floors, exposed duct and brick work, and with bedroom walls that don't extend to the ceiling.

That seems like it would be tough to heat and cool, or is that included?

we thought it would be kind of neat for our young daughter to be able to look out her window and see the parade on Thanksgiving morning. However, the parade is only once a year.

Are they still doing that? It was never the same after Hudson's left and I don't think I ever went after they did. I figured it would just die out.