MONROE

about 90,000 square feet, could also include a new downtown grocery store, and the entertainment component, which includes the new National eatre vision, encompasses about 60,000 square feet. Between 1,500 and 1,800 parking spaces are also planned.

e Downtown Development Authority board signed o on the proposal on Wednesday afternoon.

Ko Bonner, CEO of Bedrock, told Crain’s in an interview that when he rst joined the company in 2020 he “wasn’t sure” about the stalled Monroe Blocks project, which Bedrock is now simply referring to as the Development on Cadillac Square.

“Frankly, I told Dan that, and as it turns out, I think I was right,” Bonner said.

“It was a very large, mixed-use development that, once you started you are sort of committed to it because it is all adjoined. I think my experience has always told me that if you can design a large project in a manner where you can phase it, then you have a much better chance of bringing it to the marketplace at the right moment, especially given the three di erent market components you’re trying to hit like the o ce market, the residential market, and the retail, restaurant, entertainment marketplace.”

Work on the site halted within months of a December 2018 groundbreaking ceremony on what was then an $830 million project that was to feature a 35-story o ce tower, a 17-story residential tower and other uses in a total of 1.4 million square feet across a series of buildings.

At the time, Bedrock executives said the developer was navigating complex terrain with multiple high-pro le building projects such as the development on the J.L. Hudson’s department store site, the Book Tower and Book Building and an addition to One Campus Martius.

Bonner said he wasn’t aware of why the project wasn’t moving forward when he arrived to Detroit toward the end of 2020, but he said he “wasn’t entirely convinced that it was the right design.” e board required that the proposal incorporate the National eatre facade and may include phasing for the project. e rst phase is required to include 30 percent of the total land area and not exclusively be parking, and construction is required to start within a year of the DDA board approval. e rst phase, consisting of the National eatre project and market hall components, is to begin by Sept. 1, 2024; the second phase, with residential, retail and parking, is to begin by Oct. 1, 2026; and the third phase, consisting of parking, retail and o ce space, is to begin by Jan. 1, 2028.

In February 2021, the Downtown Development Authority board approved a modi cation of a development agreement for the parcels giving Bedrock an additional two years to submit a revised proposed development plan. e deadline for that was Friday.

A new venue

If it comes to fruition as intended, Bedrock would bring the rst new concert venue to the city in years with the restoration of the National eatre, which opened in 1911 after being designed by Albert Kahn, according to Historic Detroit, which tracks Detroit buildings and architecture.

Bedrock says it believes the last time a major new live-music venue opened in Detroit was when what is now the Fillmore Detroit theater reopened in 1989, at that time as the Clubland dance/concert hall at 2115 Woodward Ave.

Since the Monroe Blocks project was revealed in 2016, the expectation had been that the theater’s facade would be preserved and restored, but the remainder of the building would be demolished, with the facade serving as an entryway into the project.

“When I looked at it with my team here, we thought we could do much better than that,” Bonner said, noting that some of the decision-making process was driven by the amount of people who visited the site’s temporary activations, such as a drive-in movie theater and an outdoor recreation area called the Monroe Midway.

“We started taking a hard look at (whether) there is a way to bring the National eatre, not just the facade, but the actual venue back to life in a manner that is constructive and additive to our overall building program,” Bonner said. “We think there is, based on some of the research we’ve done.” at Schostak/Meridian plan fell through, ultimately giving way to Gilbert’s stalled $830 million vision that’s being replaced by a new proposal.

As part of this plan, the facade would be restored; the remainder of the building would be razed; the facade would be moved to face Cadillac Square and the new venue would be built behind it.

Development proposals for the site go back years and mayoral administrations.

2021 purchase and what Bonner said are discussions to convert to residential.

It’s been nearly a half-century since anything was built on the site.

Finding funding

Bonner said that because the project has received approvals for a transformational brown eld package subsidy, it is subject to an a ordable housing agreement Bedrock has with the city.

at agreement was restructured last year when Bedrock was attempting to solicit Detroit City Council support for a $60.3 million tax break on the Hudson’s project. at agreement requires that 30 percent of the units in Bedrock’s portfolio be a ordable at 60 percent of the Area Median Income or lower, but the complex agreement provides the company considerable wiggle room.

“We will be determining how best to ful ll our obligation, and there are a number of ways of doing it and certainly one of the ways is incorporating some of the units within the development,” Bonner said.

In 2018, Bedrock received approval for what at the time was $618.1 million in transformational brown eld funding for four projects totaling what was then $2.14 billion in construction: e Monroe Blocks; the Hudson’s site development; the redevelopment of the Book Tower and Book Building; and the addition to One Campus Martius.

e precise value of the Cadillac Square development subsidy at the time was $295.5 million, with $136.2 million of that coming from capturing state income taxes on workers expected to be employed in the new properties.

However, due to the decreased size of the o ce component, the precise value of that incentive package is not yet known. Bedrock says now that its new vision is public, it will work with the Michigan Economic Development Corp. on underwriting and incentive analysis.

e reduced o ce component reects a new reality: Less demand for space than there was prior to the COVID-19 pandemic. But still, Bonner said, the phased approach to the development allows for Bedrock to ride out a bit more of the uncertainty in the market.

For example, former mayor Kwame Kilpatrick proposed, with New York City-based Northern Group Inc., a $150 million development called Cadillac Centre on a portion of the property that would have included apartments, o ce space, a movie theater, public fountain and grocery store.

e timing couldn’t have been worse for the announcement.

It was rolled out just two weeks before the text-message scandal that eventually would eventually bring down Kilpatrick, one of its chief proponents. Nine months later, it went on hold after the developer modi ed the plans and a key deadline was missed.

Five years after that, Livonia-based Schostak Bros. & Co. planned a $111 million, 16-story o ce tower for Meridian Health, which was then locally owned by the Cotton family, immediately next to Cadillac Tower, which today is owned by Gilbert after a late

“We’re positioning ourselves so that if the market begins to lean in our favor, we will be able to take advantage of the market and meet that moment,” he said.

Bedrock also is building roughly the same amount of new o ce space in the Hudson’s site development.

And to the north, the Ilitch family’s Olympia Development of Michigan and Stephen Ross’ Related Cos. are jointly proposing several new o ce projects, including a pair of high-rises, totaling about 1.2 million square feet as part of a series of new construction and redevelopment projects clocking in at an estimated $1.53 billion.

On the other hand, Henry Ford Health along with Detroit Pistons owner Tom Gores are proposing a $2.5 billion plan in the New Center area that would convert existing ofce spaces to residential.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB