Two major Detroit residential developments totaling 513 newly constructed apartments and condos in eight new buildings received key state-level approvals for public grants on Tuesday, and the developers say they plan to begin construction before the end of the year.

One of the projects, known as Lafayette West at 1401 Rivard Street in Lafayette Park near I-375, was announced three years ago but has suffered delays. The other, tentatively called Michigan and Church Street, was unveiled earlier this year and recently gained support from residents of the Corktown neighborhood, some of whom initially expressed concerns about the project and its impact.

The two developments were approved Tuesday morning for millions of dollars in brownfield tax capture grants by the Michigan Strategic Fund in Lansing. Without these public subsidies, no development would be possible, according to the developers.

“Global development in Detroit is extremely difficult to capitalize,” said Seth Herkowitz of Hunter Pasteur Homes, a Corktown project partner. very high compared to other markets.

“These costs, together with the expense incurred to address the environmental conditions on site, really create a significant financial burden on the project that simply does not achieve the appropriate risk-adjusted returns for our investors without receiving (the) incentives.” he said.

Lafayette West

Lafayette West is a 318-unit, $ 133 million development that would consist of six new five-story buildings on a 5.2-acre site containing 230 apartments for rent and 88 condos for sale, as well as a clubhouse and a pool.

The project had a groundbreaking ceremony in December 2018, which also kicked off the demolition of a vacant 1950s T-shaped tower called Shapero Hall that once housed the Wayne’s pharmacy program. State University.

But the construction phase of the project experienced various delays and the number of dwellings was reduced. One of the original developers, Novi-based Ginosko Development Co., withdrew in February.

The current development team includes Pappas Financial and Mark Bennett. According to Bennett, construction of the redesigned Lafayette West should begin before the end of the year.

The site of the planned Lafayette West development, as seen in early 2020, following the demolition of a 1950s tower known as Shapero Hall.

Apartment rental rates would range from $ 1,229 per month for a studio to $ 2,876 for a two-bedroom unit and on average $ 2.88 per square foot, according to planning documents from Michigan Economic Development Corp. Twenty percent of homes would be reserved at lower rates for those earning no more than 80% of the area’s median income, or about $ 44,000 for a single person or $ 62,800 for a family of two.

The condos would sell for between $ 216,000 and $ 585,000, or $ 475 per square foot, according to the documents.

The project is now approved for a total of $ 17.75 million in local and state-level fiscal catches ($ 5 million state, $ 12.7 million for locals) which will begin in 2023 for an estimated duration of 28 years.

Former Shapero Hall, once part of Wayne State University, located in Lafayette Park in Detroit in September 2014.

The project is also seeking additional funding of $ 9.6 million in tax increases from the Michigan Department of the Environment, Great Lakes and Energy to help cover other environmental costs.

A representative from Ginosko Development did not respond to a message regarding past project delays.

A rendering of the swimming pool at the Lafayette West development project in Detroit

Cork City Project

Rendering of the Michigan and Church project

The $ 93 million Michigan and Church Street development requires three new buildings in Corktown across from the now redeveloped site of former Tiger Stadium.

The first structure would be a seven-story, 188-unit apartment building at 1600 Michigan Ave. with retail space on the ground floor.

The second building, 1610 Church St., would have seven three-story townhouses, each approximately 2,100 square feet and with roof terraces.

The third, at 1501 Church St., would be a three-story parking structure with 216 parking spaces and 3,200 square feet of retail space on the ground floor.

Estimated asking rents would range from about $ 975 per month for a studio to $ 7,000 per month for the larger three-bedroom unit, or an average of $ 2.80 per square foot, according to planning documents.

At least 10% of units would be booked at lower rents for those earning 60% or less of the region’s average median income, which is $ 33,600 for a single person and $ 38,400 for two. Under these restrictions, the maximum rent for a studio would be $ 975 per month and $ 1,025 for a one-bedroom apartment.

The project is a joint venture of Chicago-based Oxford Capital Group, Farmington Hills-based Hunter Pasteur Homes, and Nathan Forbes of Forbes Co., owner of the Somerset Collection shopping center.

The development team is also building the nearby 227-room Godfrey Hotel project at 1401 Michigan Ave.

Construction on the hotel could begin next month, according to Hunter Pasteur’s Herkowitz.

A rendering of planned townhouses.

Construction on the Michigan and Church subdivision could begin later this year, once the project has secured funding, he said.

Michigan and Church have gone through the Detroit “Community Benefits” process required for developments costing $ 75 million or more that require government grants.

The project met with some backlash from Corktown residents who, among others, opposed the original plan to raze the Downtown Self-Storage Co. building at 1551 Church Street. Part of this building dates back to 1894 when it was a sawmill that served Corktown’s lumberyards and the building later expanded to become the Red Arrow soda factory.

Residents also lobbied developers to be more affordable for housing units and to have assurance that 51% of the workforce who will construct the buildings will be residents of Detroit.

The developers eventually accepted the residents’ suggestion to reserve 10% of the units as affordable at 60% of the region’s median income. (Their previous plan had a 20% set aside at 80% of the region’s median income.)

The promoters also agreed to preserve the old sawmill and to erect a commemorative plaque recognizing its historical importance. And they’ve formalized plans to make sure the Detroiters get the first crack at construction work.

Detroit City Council finally approved the Community Benefits Report with Developer Insurance to Corktown Neighbors last month

“Our community was quite passionate about certain concerns and desires,” said Deborah Walker, chair of a neighborhood advisory council for the project, on Tuesday. “And the developers have worked hard with us to reach out-of-court agreements that will benefit our community and help us develop and maintain the culture and history of Corktown.”

Michigan and Church is now approved for $ 16 million in local and state-level brownfield taxes over 28 years. The grant is expected to give developers a 5% return on investment over 20 years, according to planning documents. Without it the return would be 2% and the developers say the project would not be feasible.

The developers are also seeking a 10-year tax rebate under the Commercial Rehabilitation Act worth an estimated $ 10.6 million.

ContactJC Reindl: 313-222-6631 or [email protected]. Follow him on twitter @jcreindl. Learn more about the companies and subscribe to our business newsletter.



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