$1.5B District Detroit buildout snags a key vote




  • In Business
  • 2023-02-09 03:30:01Z
  • By Detroit Free Press

Public development incentives for the proposed $1.5 billion District Detroit buildout won a key approval Wednesday night and can now head to Detroit City Council for a possible vote next month.

Members of the quasi-public Detroit Brownfield Redevelopment Authority voted 5-2 in favor of a so-called "Transformational Brownfield" plan for the buildout that calls for constructing 10 new buildings or building rehabs with construction starting this summer.

The Transformational Brownfield is a capture of state-level taxes, valued at $616 million over 35 years, of the 10 sites.

The Brownfield Redevelopment Authority is a volunteer board whose members are mostly appointed by Detroit's mayor. If council also approves the incentive, the proposal would then go to the Michigan Strategic Fund for a final vote, potentially in April.

A rendering for a proposed residential building at 2250 Woodward
A rendering for a proposed residential building at 2250 Woodward  

One Brownfield Redevelopment Authority member who voted in favor of the incentive noted how the $1.5 billion project is forecast to support thousands of construction and permanent jobs.

"I think this is a project that is needed in the city," member Stephanie Washington said.

The other four authority members who voted for the Transformational Brownfield were Chairman Ray Scott, Amanda Elias, John George, and Pamela McClain.

One member who voted against the subsidy, Maggie DeSantis, questioned whether the incentives are worth it and also the sense of urgency around the project's approval process.

"I vote no on principle," DeSantis said. "When we have neighborhoods in Detroit that are as marginalized and disinvested and as desperately needy as we have, in my mind, it's terrible public policy to offer this much subsidy in the District Detroit neighborhood in particular."

The project's developers are the Ilitch organization's Olympia Development of Michigan and megadeveloper Stephen Ross's Related Cos. Without the requested $616 million brownfield and another $182 million in local subsidies and tax breaks, they say the buildout cannot happen.

Wednesday's vote was preceded by public comments, most of which occurred virtually on Zoom, in which three people voiced support for the incentive and 11 urged disapproval.

"Why are we still showering money on these oligarchs who run this town?," one 44-year-old man, identified as "Adam," said over Zoom.

More:More details emerge for $1.5B District Detroit buildout and incentives

More:$1.5B District Detroit buildout faces heavy criticism at public hearing over incentives

Nearly all public comments at a formal Monday night hearing in the runup to Wednesday's meeting were against the subsidy.

The vote Wednesday also followed a discussion by representatives for the developers of the $1.5 billion project's tentative Community Benefits agreement.

Concessions in the tentative agreement include allowing Section 8 vouchers for the apartments in the development to be set aside for lower-income renters. Of the planned 695 apartments, 20% would be set asides.

Other concessions include $12 million in developer cash contributions and more than $100 million in "targeted spend," according to a synopsis of the deal, which is not yet final.

The other authority member who voted "no" was Eric Dueweke, who questioned the need in Detroit for the project's planned 1.2 million square feet in new office space.

"I feel like no case has been made that there's a market for all of these extra square feet of office space, that are probably - in my mind - going to cannibalize our legacy downtown buildings," Dueweke said.

Dueweke also took issue with details of the developers' separate but related $250 million project to construct nearby the University of Michigan Center for Innovation in Detroit.

He said that financial details presented to the redevelopment authority were not accurate, including a claim that U-M plans to commit $50 million to $60 million annually toward the center once it is built.

An office building proposed for 2300 Woodward.
An office building proposed for 2300 Woodward.  

"I've since found out from university people that's simply not true, that the annual investment is $10 million," he said.

In addition, he said, U-M intends to make a one-time $50 million contribution to building the center by essentially redirecting money from a planned renovation of the Horace H. Rackham Educational Memorial near the Detroit Institute of Arts.

"I've learned that the University of Michigan's $50 million - I'd love to be wrong about this - is coming because they are abandoning their commitment to renovate the Rackham Center ... and basically taking their money and moving it downtown," he said. "When Sue Mosey finds this out, she is not going to be happy."

Mosey is head of the development nonprofit Midtown Detroit Inc.

A U-M spokesperson confirmed Wednesday that the university is committed to $50 million for opening the innovation center, although would not address whether those funds would be redirected from the Rackham project.

"We will continue to assess the best path forward for Rackham Detroit," the spokesperson, Kim Broekhuizen, said.

Other funding sources for the innovation center include a $100 million donation by Ross and a $100 million state funding earmark.

In their current empty or undeveloped state, the 10 sites in the District Detroit buildout bring in about $250,000 in tax revenues, the developers have said.

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl.

This article originally appeared on Detroit Free Press: $1.5B District Detroit buildout snags key vote

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