September 2024 Review
While everyone's watching the Lions and Tigers, who's watching the development?
Pricey Rivertown Listing
Real estate listings can definitely shed light on where the market is moving, what people think a building is worth now and, in the future, but sometimes this price is more indicative of trends around the building than anything within the actual four walls. As they say, location, location, location. A new listing for a building in the Rivertown district has raised some eyebrows for its price, and the listing agent is being upfront about the fact that this more about what potentially could be happening around the building, than what the building would fetch on its own.
This past month, a 15,000 square foot building/property on Franklin Street near the Riverwalk, which houses Steve’s Soul Food, was put on the market for $15 million, making it the only building I know of that’s asking that high of a price per square foot. For reference, a building downtown on Broadway is listed for $115 per square foot, or about 1/10th of the price of Steve’s Soul Food. Now you do also get the business and liquor license, which adds some value, but certainly not what I would think would amount to over $1000 per square foot. And on a lot that is only .12 acres, you’re not getting a lot of land with the purchase either.
However, what you are getting, is a piece of a puzzle that some believe is going to be the next big development in Detroit. Over the years, Bedrock has bought up land along the river East of the Ren Cen and has floated a few ideas for what could go there. Originally contemplated to be the Casino district back 20 or so years ago, the Riverfront has gone through a transformation that makes this area ripe for development. We’ve seen a few larger scale projects go in, such as Orleans Landing and the DNR Outdoor Adventure Center, but a large of the area remains parking and buildings that need significant work.
The East Riverfront has long been targeted as a redevelopment opportunity, with the City undergoing a framework plan back in 2017, which called for developments from small infill to midsized mix use, and high-density transit oriented. For about just as long, Bedrock has been rumored to be interested in being part of this framework, including long discussed plans for the dozen or so acres of land next to the Ren Cen in conjunction with GM, to the more recent acquisitions of the UAW-GM Training Center and Stroh Place and some adjacent lots.
While one can put two and two together to guess why this building on the Franklin Street is asking the highest price in the City, but just as convenient, the real estate agent listing the property has come out and stated it himself. As Crain’s reported, Samuel Abdoo stated that the price is reflective of the fact that this property abuts another ~2.75 acre parcel owned by Bedrock and in order to develop the whole block, Bedrock would need to buy this parcel and a few others. And with the current status of the Ren Cen, underutilized, up for redevelopment, these lots are no longer necessary for office workers and could certainly be part of these redevelopment plans.
It’s no secret that this area has been eyed for development, but the timing of this building going on the market makes me believe there’s something going on behind the scenes. The process of gathering parcels slowly and quietly for a large-scale development is a well-known tactic, it’s been used by Walt Disney for Disney World in Orlando, as well as Olympia for the construction of Little Caesars Arena. This is typically done to avoid property owners slapping a premium on their lots because it’s sought by a group for a large project. We’ve seen this play out with buildings around LCA that have still gone unsold.
Ultimately, I think it’s no secret the Riverfront is being targeted for development, especially with the Ren Cen being looked at as a redevelopment or reuse project. And it could be that this property owner wants to sell anyway and is just putting the price out there to see what he can get. But I feel like the timing of this coincides with a lot of moving parts on the side of GM and Bedrock, especially with some yet unsubstantiated rumors in Lansing that there may be interest in another streetcar down Jefferson, I wouldn’t be surprised if we have something more solid plan wise this time next year.
Eastern Market Expansion
While Eastern Market is a great place to take out of town guests or pick up fruit on the weekends, it’s first and foremost always been an industrial food hub for the city. In looking to grow this sector for the neighborhood, the Eastern Market Partnership and Eastern Market Development Corporation recent added an industrial building, or a shed, to its purview, the first expansion in more than 40 years, allowing the market to continue to serve wholesale buyers and sellers. The shed, dubbed “Shed 7”, is 45,000 square feet and will include refrigerated storage and loading docks. This expansion takes the historic Eastern Market front and center to ensuring the area maintains its status as a food hub for the city and for the region, not just am attraction on Saturday mornings.
While it may be slow coming, the purpose of the Eastern Market Partnership and Development Corporation has always been to grow Eastern Market’s stake as a food hub, while also allowing it to flourish as a residential and mixed-use neighborhood. Looking back at the 2025 Strategy that was published in 2016, you can see the vision for the market being much more than a Saturday attraction, with its industrial uses being purposefully expanded while growing the residential and neighborhood amenity sectors. Now, if you read through this report, it’s pretty clear that not everything is going to happen by 2025, or maybe happen at all, but the plan that the Eastern Market Partnership laid out is slowly starting to take shape, and the expansion into Shed 7 is a great showing of this.
Certainly, the removal of I-375 will help Eastern Market connect to Downtown and Brush Park, but the recent exploration into a redesign on Gratiot will also help strength the connection across Gratiot with Lafayette Park. Hopefully, these changes to the city infrastructure will encourage some long delayed residential and mixed-use projects to get underway and bring a more permanent populace to the area, helping maintain everyday shops and services. I’m hopefully that this expansion of the industrial side of Eastern Market continues in a clean and sustainable way. The one thing that the Partnership definitely does not want to do is overflow the area with heavy industrial space, negating any expansion into residential which would help the neighborhood be a more everyday destination.
Modular Homes in North Corktown
First reported on earlier this year, the first of the modular homes meant to be part of a pilot program in North Corktown have been set and constructed. Backed by the Gilbert Foundation, nine land bank lots on 16th Street between Perry and Butternut have been prepped for “setting”, the first of which happened this past week. In modular construction, the foundation is built on site much like any other home, but the rest of the house is built in a factory and delivered to the site in one or more pieces. The pieces are then “set” on the foundation, typically by crane, and any pieces joined together.
The purpose behind this program is to explore the use of modular construction in North Corktown and all-around Detroit, hoping it can serve as an option when it comes to new builds for low- and middle-income families. Modular can often be less expensive, especially when done at scale. There are typically several styles of homes to choose from, but the outer size and dimensions are kept relatively form so the builder can mass produce pieces within the factory. There are additional advantages to this building technique such as a shorter construction timeframe, less disruption to the neighborhood, less waste, and controlled conditions.
The additional piece of this development is the idea that these homes will be part of a Community Land Trust (CLT), which has recently taken roots in five different Detroit neighborhoods. The idea behind the CLT is to own the homes and allow residents to buy them for a below market price, and when that owner looks to sell and move on to a new home, the CLT would set a new price for the home to be sold at. This would allow the resident to make a small profit and the home to stay affordable for the next resident. A whole writes up about CLT’s is probably warranted, but I did want to mention that with these homes, as it’s always a worry that too many new expensive homes will increase prices in the whole area, potentially forcing long time renting residents out.
North Corktown is a very attractive area to try a pilot like this. It’s an area with a lot of room to grow and many lots owned by the Land Bank but is surrounded by fairly stable neighborhoods with attractive amenities. And now, within a span of weeks, it has multiple new homes that are ready to invite new residents. First and foremost, new homes in the neighborhood are always a good thing, especially in an area that has many vacant lots. Second, the discussion around modular construction has picked up in recent years and Detroit could be a great place to really make a name, given the number of available lots within certain areas and the need for new modest and affordable homes. I’m not sure what these houses will go for, but I’m really bullish on this idea and I’m hoping it can be expanded in North Corktown and around the city.