Michigan State invests in housing project near Henry Ford Hospital

Michigan State University is an investor in a new a ordable and workforce housing project in Detroit’s Milwaukee Junction neighborhood.

It’s the rst known real estate investment in Detroit of this kind for the East Lansing university, which is working with Henry Ford Health and Detroit Pistons owner Tom Gores nearby on a new $2.5 billion hospital campus with commercial and residential space.

Detroit-based e Platform LLC’s $38.2 million Piquette Flats project involves converting the former Studebaker Sales and Service Building into 161 workforce apartments at 411 Piquette next to the former Ford Piquette Avenue Plant where the Model T was born. Construction has started, with work expected to wrap up in the summer next year.

“MSU is pleased to be making an investment with e Platform in the Piquette Flats project,” Philip Zecher, chief investment o cer for MSU, said. “ is is an opportunity to invest with an experienced partner in a quality asset; the location is in an emerging area with the potential for long-term growth.”

It is not clear how much of a stake the university is taking in the project. e project, which has been in the works in varying stages for several years, is slated to have 71 studio apartments, plus 87 one-bedroom and three two-bedroom units renting between 60% and 120% of the Area Median Income, a federally designated gure that is controversial because it includes suburban incomes and therefore skews upward what is considered a ordable to residents of a city that is one of the poorest in the nation.

A press release says 60% of the units will be a ordable to people making 80% of AMI and below.

“Milwaukee Junction is the birthplace of the U.S. auto industry where, in the early 20th century, manufacturers sprang up around the Milwaukee and Grand Trunk railroad lines,” Peter Cummings, chairman and CEO of e Platform, said in a statement. “Piquette Flats allows us to repurpose this important historic building and provide a ordable housing options for a diverse range of city residents.”

Detroit-based Kraemer Design Group is the project architect while e redevelopment includes public nancing like a $3 million, 12-year property tax abatement and $2 million in brown eld tax-incrementnancing. ere is also a $7 million low-interest loan from the Michigan Economic Development Corp. Flagstar Bank has rst-position debt on the redevelopment.

Oak Park-based PCI One Source Contracting is the general contractor. Once built, the property would be leased out and managed by Beztak Properties, based in Farmington Hills. South eld-based Bernard Financial Group worked on the nancing.

Renovations include electrical, mechanical and plumbing upgrades, new, historically accurate windows, a facade restoration and a new roof and elevators. Amenities planned include a tness center, lobby lounge, a dog run and pet washing station and laundry rooms on each oor.

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