Somerset Collection owner buys former Kmart headquarters

[sg9018]

Somerset Collection owner buys former Kmart headquarters

Story here,

http://www.freep.com/apps/pbcs.dll/a...te=fullarticle

The owner of Somerset Collection in Troy has purchased the former Kmart headquarters complex for an undisclosed price.
The deal closed Dec. 29 after a 10-day negotiation, said Nate Forbes, managing partner for the Southfield-based Forbes Co., the owner of Somerset. The 40-acre Kmart property will have a retail component but planning is in the early stages, Forbes said.


It will be owned by Forbes/Frankel Troy Ventures, he said.

Grand Sakwa Properties of Farmington Hills had planned to buy the property for approximately $15 million, according to reports last fall.

Forbes had been interested in the Kmart property – which is just north of Somerset Collection at Big Beaver and Coolidge roads – for several years.

The deal with Grand Sakwa apparently fell through. Grand Sakwa officials did not return phone calls seeking comment.

Forbes said he got a call from the broker at CB Richard Ellis last month asking if he was still interested in the parcel.

“It all happened so quickly,� Forbes said. “Obviously, we will have a big stake in the city of Troy and that corner. We will undertake a study of the corridor. That process will begin shortly.�

The Kmart site is in the heart of Troy’s business district and is considered one of the most desirable commercial properties in Michigan. Its proximity to Somerset Collection, an upscale mall with 180 stores including Louis Vuitton, Tiffany and Saks Fifth Avenue, could draw similar retailers to a new development.

Forbes said he wasn’t ready to discuss elements of the proposed development.

“We’ll see what the market bears, but retail will be part of it,� he said.

Jim Bieri, president and CEO of Bieri in Detroit, said the sale to Forbes opens the door for retailers, restaurants and entertainment venues who need larger space than they can get in an enclosed mall.

“I’ve said for years that the highest and best use owners of that property was Forbes. They can make it into an added experience for the city of Troy and their customers,� Bieri said.

Troy City Attorney Lori Grigg Bluhm said the city hasn’t yet been officially notified of the purchase, but said officials are “looking forward to working with any developers of that property.�

Bluhm said the property is a planned unit development, which is a zoning tool that allows more flexibility for developers. The zoning, she said, allows for greater density closer to Big Beaver and requires some residential development.

Officials at Grand Sakwa, Bluhm said, told the city they wanted to create “a complimentary development to Somerset.�

If Forbes decides to develop the property, the existing structures on the site would have to be torn down — something Grand Sakwa had planned to do, city officials have said.

If not, she said, the property would still have to be maintained. But city officials are hopeful the property won’t sit vacant.
“It’s a great property. It’s in a great location,� Bluhm said. “There’s a lot of great things about that site and we are optimistic that there will be something there."

[ghettopalmetto]

If Nate Forbes were smart, he'd demolish the Kmart Headquarters and construct a temporary park, so the customers at his mall don't have to look at such *blight* across the street.

We all know that's the only way to be successful.

[RickBeall]

Make it a parking lot. Put a stadium there ... if you need advice, ask the the leaders in Detroit because they would probably have a lot of great ideas, like for instance putting K-Mart World headquarters there.

[MichMatters]

ghettopalmetto, the article says that the developer is planning to tear down the property.

Really, this is about as good a developer as one can hope to find in these trying times. I honestly don't see how anyone could make anything acceptable and fitting happen on that site for the forseeable future, but that they are looking to tie this into Somerset in some way sounds about as likely a plan as one could hope for.

[fastcarsandfreedom]

It's good news for the City of Troy going forward--as it appears that the property will some day be a revenue generator again. What happens and when is anyone's guess--but this is a serious developer and one which takes it's reputation seriously. Somerset's continuing success in light of the economic climate is a testament to that. I would think they'd be looking at something mixed-use with a strong retail component--maybe a lifestyle-type set-up with retail, dining and entertainment.

[R8RBOB]

Some bean-counter in Pontiac is pulling his hair out this morning. The former K-Mart Headquarters which sit on 40 acres of land sold for 17.5 million yet the Pontiac Silverdome which included 127 acres of land was sold for $583,000. Now I know the Silverdome sale was done via auction but someone feelings got to be hurting knowing that an empty building in Troy with less acres can go for nearly 17 million dollars more.

[Hermod]

Some bean-counter in Pontiac is pulling his hair out this morning. The former K-Mart Headquarters which sit on 40 acres of land sold for 17.5 million yet the Pontiac Silverdome which included 127 acres of land was sold for $583,000. Now I know the Silverdome sale was done via auction but someone feelings got to be hurting knowing that an empty building in Troy with less acres can go for nearly 17 million dollars more.

1. Location, location, location. Bloomfield Hills will go to the Somerset area. They do not necessarily want to go to Pontiac.

2. The K-Mart building is less of a White Elephant than the Silver Dome. If you have to let it sit for a while till the economy turns around, the K-Mart building needs one hell of a lot less upkeep.

[lizaanne]

Some bean-counter in Pontiac is pulling his hair out this morning. The former K-Mart Headquarters which sit on 40 acres of land sold for 17.5 million yet the Pontiac Silverdome which included 127 acres of land was sold for $583,000. Now I know the Silverdome sale was done via auction but someone feelings got to be hurting knowing that an empty building in Troy with less acres can go for nearly 17 million dollars more.

location, location, location

[R8RBOB]

location, location, location

I will pretend like I didn't know that and I will play along with you.

Really!!! I didn't know that property in Troy was worth so much more than in Pontiac. Aren't both cities located in Oakland County?

[ghettopalmetto]

It's good news for the City of Troy going forward--as it appears that the property will some day be a revenue generator again. What happens and when is anyone's guess--but this is a serious developer and one which takes it's reputation seriously. Somerset's continuing success in light of the economic climate is a testament to that. I would think they'd be looking at something mixed-use with a strong retail component--maybe a lifestyle-type set-up with retail, dining and entertainment.

In other words, there's a high likelihood that the Kmart site will be redeveloped into something resembling a pedstrian-friendly urban form...

...while the City of Detroit continues to build more parking lots and strip malls.

[Danny]

We might look at the Somerset Mall 3. If this new supermall was built, it would be the Michigan's first largest mall and possibly the 3rd largest mall in the world.

[R8RBOB]

We might look at the Somerset Mall 3. If this new supermall was built, it would be the Michigan's first largest mall and possibly the 3rd largest mall in the world.

Great, another mall. Like isn't Oakland County saturated with malls? Get a piece of property, build a mall with goods made in China.

[hybridy]

Answer-------Mixed-use TEXAS DOUGHNUT-who's with me?

[bailey]

In other words, there's a high likelihood that the Kmart site will be redeveloped into something resembling a pedstrian-friendly urban form...

...while the City of Detroit continues to build more parking lots and strip malls.

In other words, there is someone out there with $15mill +costs willing to invest that in Troy ....while there is no one willing to in the City of Detroit without the heavy lifting being done by the city and state government.

[casscorridor]

In other words, there is someone out there with $15mill +costs willing to invest that in Troy ....while there is no one willing to in the City of Detroit without the heavy lifting being done by the city and state government.

I don't think that is true. Yes, there has been an incredible amount of state and local government assistance, as well as foundations. But there still has been private development w/o aid.

Plus, remember, Troy like all the suburbs, was only possible through massive federal and state spending... the G.I. Bill, freeways, HUD... they allowed for the suburbs. Even City of Detroit through building water and sewage lines. Without that, we would have seen very little private investment.

Obviously private investment follows public investment, so its good to hear the trend of public money prioritizing suburbs over city is being reversed!

Watch, if not already, within the next 5 years the top 3 zip codes for development will be: 48201, 48226, 48020 [[Midtown, Downtown, New Center).

Maybe troy will build a lifestyle center, but dont expect it to be anything more than a glorified strip mall.

[DetroitPlanner]

Maybe troy will build a lifestyle center, but dont expect it to be anything more than a glorified strip mall.

There has never been a lifestyle center that is not a glorified stripmall! Mixed use developments are not called lifestyle centers, they are called mixed use. A lifestyle center is a word used to mask a strip mall that all the folks are getting is a strip mall with maybe an extra provate road cut through it, and a maybe a fancy bar.

[Hermod]

Plus, remember, Troy like all the suburbs, was only possible through massive federal and state spending... the G.I. Bill, freeways, HUD... they allowed for the suburbs. Even City of Detroit through building water and sewage lines. Without that, we would have seen very little private investment.

The housing part of the GI Bill and the FHA part of HUD helped families acquire homes in the areas where people wanted to live. The GI bill and FHA provided "loan guarantees" so they were not "massive federal and state spending". Unlike the recent housing meltdown that took out Fannie Mae and Freddie Mac, the original GI and FHA loans in the 50s and 60s were paid back. The gummint never had to spend much for those programs beyond the salaries of the bureaucrats that ran them. A lot more state and federal money was poured into the freeways in Detroit than was spent in places like Troy.

[bibs]

Property tax revenue is falling in Troy so I'm sure city officials are pleased and eager to tax the property. Will they propose building a mixed use project like the last developer or build another mall? Office space is plentiful in Troy right now so perhaps a retail focus in the beginning with office space being built several years later.

[Detroitnerd]

Yeah, if you're comparing CBD to Troy, I could see it being a more even match.

[Hypestyles]

hmm.... wonder if they'll open another movie theater.. concert venue..? family sports arena?

say.. a movie production studio might be an out-the-box alternative...

[casscorridor]

I think after the economic recession/depression, we will see the CBD start growing again, while Troy either keeps declining or stays about the same. My biggest expectation for Downtown and Midtown is a retail boom, it is really the only thing missing, besides more housing. We need every kind of retail, from grocery to clothing to electronics to furniture. I see there being a serious retail revitalization in the coming years. As for Troy, perhaps the lifestyle will be built. But I am confident L Brooks Paterson's dream of Big Beaver being the new Downtown Detroit will fail.

Troy Detroit, the big TROY letters written on the train station is an ironic symbol, at first though it may appear Troy or more broadly Oakland County has conqoured Detroit, but sooner than later those letters will be wiped from the columns and the train station will once again start proud while in Troy, the chickens come home to roost. Altready, corporations are making the move to Detroit. They are seeing the advantages of locating in an urban area. They know that their young workforce wants to locate in vibrant cities. New York was not build overnight, and neither will Detroit. There are many who say it can never be great again, yet it is happening right now. Come visit, first appearences may be decieving. Slowly, but surely, critical mass will take hold, and Detroit will be ranked among the top U.S. cities to live and do business.

[fastcarsandfreedom]

Fair to say that a strong CBD is important to the suburbs--keeping in mind that the way the area has developed means the inverse is true as well.

Lost in all this debate about how the city and region developed is the fact that a developer believes that a key piece of property is worth investing in at a time when all we've heard is gloom and doom--this deal represents hope, if nothing else.

[Hermod]

DN: You forgot one of the most important steps. Detroit was "built out" and industrial facilities were crammed into functionally obsolete buildings with limited employee parking and no room for expansion. People moving to the burbs wasn't a problem as they took their expenses [[in terms of school taxes) with them. It was the construction of all of those one story factory buildings along Van Dyke, Sherwood, Mound Road, and Stephenson Highway leaving empty buildings in the city. Industry pays taxes and needs little in return. People pay few taxes and need a lot in return.

As an example, there is/was [[not sure) a school district in southern Macomb County called the Fitzgerald School District. The real estate of the district is mostly industrial with relatively few residents. Not sure now, but back in the 50s and 60s, Fitzgerald had "Cadillac" schools with relatively low school millage rates.

It was industrial facilities leaving Detroit that destroyed the tax base, not a bunch of blue collar whites moving from the city to the burbs.

.

[Detroitnerd]

DN: You forgot one of the most important steps. Detroit was "built out" and industrial facilities were crammed into functionally obsolete buildings with limited employee parking and no room for expansion.

Yes, that was a consistent rationale of industry for moving out: limited railroad frontage, small parcels, congested rail lines, little parking. Of course, one has to look at the difference between prewar and postwar factories. Prewar factories were integrated into neighborhoods. They were surrounded with bars and barber shops, social halls and stores. Behind them, bungalows, flats and apartment buildings. They didn't need parking as much then; people could walk to work. In fact, the Rouge Complex had its own streetcar stop.

But the decision to build new factories outside the city meant more to employers than just better facilities. The broad-brush zoning meant that few workers lived right near the plant. People drove in from all over. The workforce was more difficult to organize. People left in their own cars and drove back to their own communities. I wonder if this was the beginning of when workers stopped thinking of their collective well-being and became more confused politically.

People moving to the burbs wasn't a problem as they took their expenses [[in terms of school taxes) with them. It was the construction of all of those one story factory buildings along Van Dyke, Sherwood, Mound Road, and Stephenson Highway leaving empty buildings in the city. Industry pays taxes and needs little in return. People pay few taxes and need a lot in return. As an example, there is/was [[not sure) a school district in southern Macomb County called the Fitzgerald School District. The real estate of the district is mostly industrial with relatively few residents. Not sure now, but back in the 50s and 60s, Fitzgerald had "Cadillac" schools with relatively low school millage rates.

That was the model of the day, anyway. Today it seems that companies demand so much more from municipalities: Tax breaks, subsidies, etc. Take it from a person who grew up in Dearborn, I get you here.

It was industrial facilities leaving Detroit that destroyed the tax base, not a bunch of blue collar whites moving from the city to the burbs.

Yes, I see what you're getting at, but this was a huge reorganization of the way people socialize, live, work and interact. I guess I'm concerned with more than just the tax base, but how policies ranging from housing subsidies, road subsidies, military strategies and legal decisions all worked to shower the suburbs with resources and sock it to the city.

Anyway, even as businesses left the city, now they're in a position to leave our suburbs. The tax situation you describe is actually more like what Troy is facing now. Troy actually gave a huge tax break to Kelly Services last year, just so it would agree to stay. That wouldn't have happened in the old days!

[Hermod]

Yes, that was a consistent rationale of industry for moving out: limited railroad frontage, small parcels, congested rail lines, little parking. Of course, one has to look at the difference between prewar and postwar factories. Prewar factories were integrated into neighborhoods. They were surrounded with bars and barber shops, social halls and stores. Behind them, bungalows, flats and apartment buildings. They didn't need parking as much then; people could walk to work. In fact, the Rouge Complex had its own streetcar stop.

Bars and barber shops, yes. Most of the factories were not near stores or houses. Industrialization of Detroit coincided with the advent of the electric street car [[thank you, Mr Sprague). Workers rode street cars and, later, buses to work.

When my grandfather was a supervisor at Victor-Peninsula, he would go to work, get things going, then walk over to the barber shop for his morning shave. He even had a metal template for the barber to use to trim his mustache, the barber kept the template on the shelf behind grandpa's shaving mug.

Lots of bars near work then because the workers were paid in cash and would always hit the bar on payday. The wives would camp outside the factory on payday to get their household money before the husband could get to the bar and spend it all.