2015 Detroit 2.0: A special report by Crain's Detroit Business

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Vol. 31 No. 47

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Downtown resurgence: What gaps are left to fill? Page 6 Historic preservation: How tax credits help the dollars make sense. Page 10

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DETROIT HOMECOMING REPORT: Expats take action in ‘America’s Comeback City.’ Page 59

CDB Living In The D_New CD Magazine sized 10/19/2015 10:36 AM Page 1

THE FUTURE HEALTH OF DETROIT IS LOOKING VERY GOOD.

The General Motors Foundation is proud to support positive change and growth in the city of Detroit. By investing in education efforts we are developing talent and opportunity while cultivating the next generation of leaders and innovators.

gm.com/gmfoundation

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DETROIT 2.0

Inside this issue Reviving Detroit by disrupting it Page 6

Guest essay: Millennials who don’t remember ‘Old Detroit’ help city build anew. Page 3

Awaiting new life In a renewing downtown, these buildings could be the next round. Page 6 See also pullout map after Page 8

Taxes into cash: historic preservation ABOUT THIS ISSUE

How credits help developers bring hope to buildings seen as lost causes. Page 10

Editor: Michael Lee

Detroit Rink city redux Adviser to Ilitches on “District Detroit” sees residential component as the key. Page 16

Production manager: Kristin Bull Design: Karen Freese

Mortgages and rehabs

Cover: Pierrette Templeton

Bank programs that help homebuyers in the city also help them afford to renovate their new purchases. Page 19

Copy editors: Gary Piatek, Ed Bradley, Beth Jachman, Gary Anglebrandt

Pride and ownership Land bank program lets homeowners buy next-door lots as easily as buying a book on Amazon. Page 22

ON THE COVER

A whirlwind culinary tour

Depicted in the cover art are (clockwise from left) the Renaissance Center; the Fisher Building; One Detroit Center; Chrysler House, formerly known as the Dime Building; One Kennedy Square; Eastern Market; and the Shinola clock. CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the third week of November, and no issue the third week of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2015 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is strictly prohibited.

A recent Detroit expat — and former Crain’s food writer — finds food nirvana in 36 hours back here in the Midwest. Page 26

Midtown future A guide to some new properties set to hit the market in a renovation hot spot. Page 36

The pasta and the (chick)pea Page 16

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Entrepreneurs build a growing business in Detroit on a new kind of noodle. Page 38

Spaces, public and bright From the riverfront on out, public spaces add new jewels to Detroit, in plain sight. Page 42

Who owns downtown Private ownership surges as Dan Gilbert makes buys, and the government no longer needs to. Page 49 Page 26

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Retail revival Woodward and Midtown surge as shopping destinations, but that’s not the only story in town. Page 51

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DETROIT 2.0

Inside this issue DETROIT HOMECOMING Taking action Page 62

Mary Kramer: Detroit expats help make “America’s Comeback City” more than just a slogan. Page 59

Expats react Detroit Homecoming attendees share their impressions of where their hometown has been – and where it’s going. Page 61

Homecoming to remember From meeting Al Kaline to Mayor Mike Duggan’s big goals, a homecoming to remember. Page 62

Super Bowl memories AARON ECKELS

Motown star Martha Reeves entertains Detroit expats and other guests at Detroit Homecoming.

Guest essay: The Super Bowl inspired in many ways, both personal and profound for the city. Page 64

Why does Honigman believe so deeply in a resurgent Detroit? For 67 years, we have proudly been at the heart of Detroit’s greatness, resilience and resurgence as our clients turn to us for sound legal and business counsel. They are the deeply committed men and women ready to take the creative risks, launch new ventures, and realize the dreams on which a great city depends. We hope that you will join us and become a part of the shared vision for the Detroit of the future.

WWW.HONIGMAN.COM

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DETROIT 2.0 | DREAMING AND DOING

Here come the millennials Young people who don’t remember ‘Old Detroit’ build anew

By Ron Fournier Special to Crain’s Detroit Business Fournier, a senior political columnist with the National Journal and former Washington bureau chief and White House correspondent for The Associated Press, is a Detroit native who attended Detroit Homecoming in 2014 and 2015.

David Kirby was waiting tables in 2013 at Craft Work , a trendy restaurant in Detroit’s West Village neighborhood, when he spotted Mayor Mike Duggan across the room and announced to his colleagues, “I’m taking the mayor’s table. He’s mine.” A few years earlier, the West Village would have been the last place you’d expect to find an ambitious young waiter cornering a big-city mayor. Craft Work is located inside 4,000 square feet of craggy brick building that housed a used clothing shop until 2012. The east-side neighborhood was filled with vacant lots and storefronts. By 2013, the West Village was trending hip — a magnet for millennials like Kirby. Grabbing a handful of menus, the 26-year-old raced to Duggan’s table and said, “Mr. Mayor, I’m your waiter tonight, but I won’t be a waiter forever. I’m going to open a local-foods market, and I need you to promise to come visit my store.” Within two months, Kirby had opened the Parker Street Market , a bodega-style organic grocery two blocks from Craft Work. Tips he earned waiting tables at night were spent the next day on Lowe’s shelving units, which Kirby stocked with an inventory bought on consignment. The shelves were so sparse he bought flowers to fill empty spaces. Kirby immediately turned a profit, a modest one, slightly expanded the market, and quit the restaurant job after realizing he could support his wife and month-old baby by sellSEE MILLENNIALS, PAGE 4

LARRY PEPLIN

Waiting tables at Craft Work, David Kirby told his customer, Mayor Mike Duggan, he was going to open a local-foods market. A couple of months later, he opened Parker Street Market.

“It took 20 years to get one business in this neighborhood and less than a year to get 20 more.” David Kirby, Parker Street Market

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DETROIT 2.0 | DREAMING AND DOING

LARRY PEPLIN

The shelves of Parker Street Market tend toward the organic and local.

MILLENNIALS FROM PAGE 3

ing food rather than serving it. Duggan, a Democrat, has visited Parker Street Market several times, once with Republican Gov. Rick Snyder. “I kept my word,” Duggan said. It was the mayor who first told me about Kirby. I bumped into Duggan recently at the second annual Detroit Homecoming, a joint effort by the political and business communities to enlist “expats” like me into

the city’s post-bankruptcy recovery. I asked him how the city can keep grinding upward. How does Detroit write a comeback narrative that’s real and durable, and not be just another buzzy-hyped brand that goes to hell? Duggan said the key is to attract and retain young adults: millennials, a uniquely equipped generation of social entrepreneurs who don’t trust government. You do that by getting out of their way, he said. Let each young transplant build a life in Detroit while building a better Detroit.

“Look,” he said, “I’ve obviously got to make sure they don’t spray graffiti on the walls and there’s no squatting in homes,” Duggan chuckled. “But other than that, have at it. Let them innovate. Let them create. Let them do good things and make a profit.” That’s when Duggan told me about Kirby. “The kid walks up to me and says he’s going to own the largest chain of local-foods stores in the state of Michigan!” For Duggan, the ex-waiter is a model for a new Detroit, a city slowly rising from the ashes with an infusion of young,

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civic-minded strivers. Innovators. Disrupters. Dreamers. Risk-takers. Consensus-builders. Millennials like Kirby (who moved to Detroit in 2013 from hipsteresque Brooklyn) have no patience for institutions that still play by 20th century rules. The day after talking to Duggan, I drove 20 minutes from downtown to Kirby’s market. The shelves were stuffed with organic foods, local and national brands. The counter was built from a wooden crate, which slid across the worn wood floorboards when I leaned against it. “Don’t worry about that,” Kirby said. “Nothing fancy here.” He welcomed customers by name as they walked in, and they came in a constant stream. Basic groceries, snacks, fresh juices, beer and wine in a space the size of a traditional Detroit “party store,” though Kirby’s prices are higher and the products far better than anything sold via that old business model. Two years ago, Kirby was taking a walk with his wife when he noticed a “for rent” sign in an abandoned storefront on Parker and Kercheval streets. “The rent was exactly what I had in my savings account: $500,” he told me.

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PHOTOS BY LARRY PEPLIN

of Detroit, there were already bars on

the windows of West Village. He nodded and smiled. “It took 20 years to get one business in this neighborhood and less than a year to get 20 more.” Wise man, this kid. He was reminding me that change comes slowly, then all at once. After quitting the restaurant, Kirby quickly expanded his inventory by carrying the goods produced by young Delike Lisa Lud“Why not (remove the metal bars troiters winski, whose pies had on the windows)? I don’t have such a following that people lined up around any connection to Old Detroit.” the corner during David Kirby, owner, Parker Street Market Kirby’s first Christmas season in 2013. “Our The landlord agreed not to collect barrier to entry is low,” he said. “Just come in with your product, and I’ll rent until the store opened. Kirby found a wholesaler willing take it.” Last year, Ludwinski won a conto give him inventory that he would test for young entrepreneurs and pay for out of his first sales. One of the first things Kirby did used the $50,000 prize to open a was remove the metal bars that had bakery, Sister Pie , across the street been on the storefront’s windows, a from the Parker Street Market. When long-ago concession to the neigh- I visited, the bakery was packed with borhood’s crime problem. I asked customers, including a group of women drawn in from the suburbs why he took them off. “Why not?” he shrugged. “I don’t for the $5 special: a cup of coffee and have any connection to Old Detroit, slice of pie served on elegant china. Success breeds success. Eight the don’t-come-down-here-it’s-tooempty storefronts near the market dangerous Detroit.” I told him Old Detroit is my De- and bakery are about to be filled by troit. The son of a riot cop, I was local startups. Most of Kirby’s customers are born and raised not far from Kirby’s market. When I left the city in 1985, longtime residents of West Village after graduating from the University and nearby Indian Village, economi-

Parker Street Market

cally and racially diverse Detroiters who remember when the corner of Kercheval and Parker housed a series of failed businesses — a hot dog stand (three months), a used appliance store (six months) — and who embraced his lofty ambitions. He attributes his success to “a perfect storm of entrepreneurship: Food business owner looking for shelf space and a small market with lots of it.” He also credits a business and political community that is working together — for once. (Duggan and Snyder refer to each other in their stump speeches, respectively, as “my partner.”) Kirby is being modest. He is a success because he is fearlessly creative and consultative, a purpose-driven social hacker who thinks anything is possible if it’s important enough to change. He is a product of his times — part of a generation shaped by economic tumult, technological surge and war. He brings success to Detroit by disrupting it.

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DETROIT 2.0 | REDEVELOPMENT

PHOTOS BY ANDREW POTTER

The original Roney & Co. building on East Jefferson, also known as the Raymond James building (above), United Artists Building on Bagley (below).

Next up for rehab? As investors grab downtown real estate, some buildings face development hurdles

By Kirk Pinho kpinho@crain.com

Scratch that one off the list. And that one. That one over there, too. From Capitol Park to Merchants Row, from Paradise Valley to the financial district, downtown Detroit’s roster of vacant and neglected historic buildings is dwindling. The city’s skyline, once pocked with scars after decades of abandonment, is beginning to heal as real estate investors — some better capitalized than others, some better known than others — lay their claim to piece after piece of downtown. “Detroit was filled with dreamers who had no money,” said Bill Vogel, principal and managing broker of Royal Oak-based Third Coast Com -

mercial Real Estate . “And now we’ve got people not only who know what they are doing, but have the money to stand behind the projects.” Whether it’s the Wurlitzer Building on Broadway Street, which was so dilapidated that pieces of it fell and damaged its neighbor, or the haunting Italian Renaissance-style Book Tower and Book Building on Washington Avenue, buildings small and large are falling into the hands of investors with big ambitions, big wallets — and sometimes both. But there are still mostly empty buildings in the downtown core that, in spite of the investment wave in recent years, have an owner who is either without a track record of historic renovation and redevelop-

ment, or is without the financial wherewithal to pull off what are often complex projects — or some combination of both. Other factors can include market timing as well as other developments in the pipeline, some experts said. To compile the accompanying list

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of buildings (see pull-out map be- largely vacant land and other runtween Pages 8 and 9), Crain’s spent down buildings, those two properseveral weeks interviewing real es- ties are ones on which redevelopers tate brokers, architects, developers should have an eagle-eyed gaze. Perhaps the downtown redeveland other experts on which buildings in the central business district opment opportunity generating the met some basic criteria: They were most buzz in real estate circles is the relatively large, were in need of sig- former Detroit Free Press headquarnificant repairs on exteriors or inte- ters building on West Lafayette riors, and had owners that had Boulevard. But even as recently as a owned them for a long period without pulling the trigger on “Detroit was filled with dreamers a viable redevelopment plan, or had no who had no money. And now we’ve track record of got people not only who know what pulling such a plan they are doing, but have the money off. For example, the to stand behind the projects.” Church of Scientology

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of turning the building — 14 stories at its center and flanked by six-story wings on both sides — into multifamily space with about 150 units. Then a harsh reality set in: DDI, in spite of its deep pockets and track record elsewhere of real estate development, would not spend the money needed to maintain its downtown portfolio, which also included the towering David Stott Building on Griswold Street in Capitol Park and the Clark Lofts building on Grand River Avenue. Its three buildings fell into disrepair. Water flooded the Stott basement. Retail and office tenants fled the skyscraper, searching for downtown space with a more responsive landlord. During the brutal winter of 2013-14, maintenance as simple — and critical — as snow removal was at times shirked. Now, Dan Gilbert owns the Stott and the Clark Lofts, which he purchased six months ago for a combined $18 million, and the former Free Press building is for sale for $16 million, four times what DDI paid for it two years ago. “The interest level has been extremely strong,” said AJ Weiner,

Bill Vogel, principal and managing broker, has owned the forThird Coast Commercial Real Estate mer Raymond James building at Griswold Street and Jefferson Avenue for eight few months ago, experts were pesyears. With a riverfront view and simistic about the building’s fate, eight stories, that 49,000-square-foot given the owner’s less-than-stellar building constructed in 1926 and the track record with its downtown real longtime home of stock brokerage estate investments. Roney & Co. is finally ready for new DDI Group , a group of Chinese inlife, real estate experts say. vestors based in Shanghai, purThe Los Angeles-based church chased the 302,000-square-foot, 90has proposed some modest modifi- year-old building in 2013 for $4.2 cations. For example, last year it million. With grand plans Crain’s reSEE REHAB, PAGE 8 wanted to replace the prominent ported on at the time, there was talk Raymond James sign atop the building with a Church of Scientology one, but that request was scuttled by the Detroit City Council. Still it languishes, empty. And still others are part of a larger, grander plan for downtown. Two buildings owned by Ilitch Holdings sit in the heart of the 45-block The District Detroit, which will feature a new $627 million arena for the De troit Red Wings and other events, plus what is expected to be at least $200 million more in additional mixeduse development. The Ilitch family has owned the Loyal Order of the Moose Lodge Building at Cass Avenue and West Elizabeth Street since 2007 and the United Artists Building at 150 Bagley St. since 1997. Olympia Development of Michigan , which is developing the arena and overseeing the new development surrounding it, has not revealed plans for those buildings. But given their highly desired location within what is expected to be a massive swath of the downtown area, now The former Detroit Free Press headquarters on Lafayette Boulevard.

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DETROIT 2.0 | REDEVELOPMENT

REHAB

Harvard Square Centre Building

FROM PAGE 7

“We’ll be patient, and clearly the market is anxious for product.” AJ Weiner, managing director, Jones Lang LaSalle

managing director in the Royal Oak office of Jones Lang LaSalle, which is marketing the property for sale. “But we are not in any rush to do a transaction. If the right number comes along with a buyer that we feel will perform, we’ll sell. But we’ll be patient, and clearly the market is anxious for product.” Depending on your perspective, Dennis Kefallinos is also remaining patient. Kefallinos, a Detroit real estate investor whom some criticize for lack of upkeep at his buildings and slow work on redevelopment projects, owns the Harvard Square Centre Building on Broadway Street, which he purchased in 2011 for only about $700,000. Chris Mihailovich, general manager of Kefallinos’ Detroit-based Boydell Development Corp., which also owns the historic Michigan Building and attached former Michigan The ater , said other projects have taken

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the front burner to the planned conversion of the 90-year-old, 58,000square-foot Harvard Centre Square into about 80 residential units. “We didn’t pursue it with our guns blazing because we have other projects going on,” he said. “We took it at a snail’s pace, but it’s finally there. There has been a lot of interest in that property, and we are looking economically at it and seeing what we are going ahead with. We don’t want to stretch ourselves too much.” Aaron Seybert, vice president of the New Markets Tax Credit Group for the Community Development Bank of Chase Bank in Ann Arbor, has played a vital role in financing efforts on some of the highest-profile historic redevelopments in recent memory, including Gilbert’s Madison Building on Broadway, the Whole Foods Inc. store in Midtown and the redevelopment of the former United Way building in Capitol Park. Seybert, a Crain’s 40 under 40 honoree last year, says real estate speculation, the complexity of historic renovation, and a shortage of people with the knowledge and capability in the area to pull off such complex redevelopments all led to the buildup of old buildings without viable rehabilitation plans in the past. “Rehab of historic buildings is cost- and time-intensive,” he said. “We have a great community of architects, developers and contractors here, but in terms of scope of need, it’s probably too few. And in historic rehab, that can be a barrier.” Financing for redevelopments of older buildings also remains a hurdle. Some of the largest projects in recent memory required as many as 17 financing sources to become a reality. In spite of those buildings, and others, that remain on deck for redevelopment, there is still speculation about when the downtown core will be a viable option for new speculative building construction. Steve Morris, principal of Farmington Hills-based Axis Advisors LLC and a real estate professor in the Stephen M. Ross School of Business at the University of Michigan , said in order to justify new speculative office construction, the building would have to command rents

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Clockwise from top: the Fowler Building, the Old Wayne County Building, the Executive Plaza Building.

above $30 per square foot. But according to data from the Southfield office of Newmark Grubb Knight Frank, the average downtown rent was just $21.46 per square foot per year in the third quarter. Could that be just a few years out? Or will it be decades? “Very few people will pay that,” Morris said. “They’ll stay where they’re at or they’ll go to the suburbs. So is anybody going to step up and pay north of $30? I don’t know. Am I going to live to be 90?” But still, downtown rents are on the upswing, according to Newmark Grubb. In the first quarter of 2013, the average rent was $20.77 per square foot per

year, meaning that rates have increased 3.32 percent in less than three years. Multifamily residential rents downtown are creeping toward — and in some cases, surpassing — $2 per square foot per month, which makes traditional lenders more willing to finance projects. All that, experts say, bodes well overall for the central business district, perhaps eventually leading to the point where there are no more historic buildings to scratch off the rehab list. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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DETROIT 2.0 | REHABS

Taking credits Tax programs provide foundation for preserving historic downtown buildings

“It’s the golden age of historic restoration in Detroit. Detroit has put itself back on the map.” David Di Rita, principal, The Roxbury Group

By Ellen Piligian Special to Crain’s Detroit Business

The 19-story, $94 million restoration of the David Whitney building in Grand Circus Park, which opened late last year as a mixed use development including a boutique hotel and 108 apartments, is just one of the city’s more recent achievements in historic preservation. It joins other rehabilitation projects — the Broderick Tower on Witherell Street, the Capitol Park Project with three buildings on Griswold, and the multi-phase Woodward Garden Block Development in Midtown — that were spurred by an improved economy and inspiration from the $200 million restoration of the Book Cadillac hotel in 2008. “In many respects, it’s the golden age of historic restoration in Detroit,” said David Di Rita, principal of The Roxbury Group, which developed and is a partner in the David Whitney building. “Detroit has put itself back on the map.” Many of these projects would likely not have happened at all, or with less commitment to historic detail, without the federal rehabilitation tax credit, a 20 percent credit on qualified investments that bring a building back to its original historic character. The federal tax credit, introduced in 1976, was geared to getting developers to take on these landmark buildings — typically expensive and very time- and labor-intensive projects — by making them economically feasible. “It’s one of the most ecologically friendly credits we have. We don’t want to tear down the core of a building if you have a good solid foundation. It’s to encourage you to work with that,” said Joseph Kopietz, an attorney at the Detroit office of Clark Hill PLC who focuses on real estate law and consults on historic projects from $500,000 to well over $100 million. “Plus, people like the cool factor,” he added, referring to the authenticity of historic buildings, from the exposed brick to the intangibles that attract tourists and residents to a city rich with history and architecture.

ALOFT DETROIT AT THE DAVID WHITNEY

Significant effort was made to fully restore the David Whitney Building’s dramatic atrium, including repairing original terra-cotta, mahogany and marble surfaces.

Playing catch-up A lack of both vision and proper mothballing along with economic uncertainty over the years cost Detroit some iconic buildings from the late 1990s to 2015 — the Hudson’s building, the Statler Hotel, the Lafayette Building, the Park Avenue Hotel, all gone. “Every single one of those buildings was a potential historic tax credit building that’s been lost forever,” lamented native Detroiter David Schon, a partner with Nixon Peabody and co-chairman of the firm’s historic tax credit team in Washington, D.C., who consults on projects in Detroit and nationwide. Detroit has lagged behind other Rust Belt cities like Cleveland, Chicago, St. Louis and Baltimore, which have been using the federal credit the past two decades, said

Robert McKay, an architect with the State Historic Preservation Office . “We’re playing catch-up and playing it quite well,” he said. McKay, noting that the 2008 recession hit Detroit especially hard, said it took a while for the momentum to build. “(Now) Detroit is the busiest that I have seen it in 18 years.”

New challenges As these projects have gained traction, most did so with the benefit of a 5 percent state historic tax credit that ended in 2011. Paired with the federal credit, projects could expect at least a 25 percent credit in addition to enhancements, competitive credits that could be used with the state credit, that are also gone. In all, these gave developers about 50 percent in tax credits on projects including the

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David Whitney, the $53 million Broderick Tower redevelopment, and the Capitol Park Project, a roughly $90 renovation of three buildings on Griswold. Losing these credits “was certainly a blow to the development,” said Kopietz. The Michigan Community Revitalization Program, an incentive program through the Michigan Strategic Fund, took place of the state credit. Now developers compete with non-historic projects across the state for funds that have totaled $170 million through Sept. 30 of this year. According to MCRP manager Lisa Pung, $37.5 million has been approved for Detroit rehabilitation projects, which have made up 20 of the total 98 projects they’ve approved throughout the state, including Capitol Park, the Grand Army of the Republic building and the recently approved Wurlitzer Building. Still, according to Richard Hosey, a partner in Capitol Park Partnership LLC , which is part of the redevelopment of Capitol Park, that’s not a lot of money. “It’s a small pot and everyone has to go after that.” Added Elisabeth Knibbe, principal with Quinn Evans Architects of Ann Arbor who used the federal and state rehabilitation tax credits herself to develop Midtown’s Sherbrooke Manor, a 14-unit apartment building that opened in 2013: “I don’t think we’ve seen the effect yet. We’re working on early phases of some projects and they’re struggling.” The loss of the state credit didn’t stop the restoration of the castlelike, three-sided GAR building on Grand River Avenue. “We just missed the cut,” said Tom Carleton, who developed the project with his brother David, both principals with Detroit media company Mindfield , and business partner Sean Emery. They used all the financial tools and incentives they could, said Tom Carleton. “All these little bits and pieces and the MCRP were a major influence in getting a traditional bank loan (for the project).” Now nearly complete, the GAR building houses Mindfield’s offices and two restaurants with event space and additional offices they plan to rent out in the five-story building.

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ALOFT DETROIT

Turning the federal rehabilitation credit into cash Most investors don’t have the taxable income to offset a 20 percent tax credit on a multimillion-dollar project. Even better is cash on hand to fund the project while it’s being developed. A common practice with historic projects is to transfer the credit to an investor, whether an individual or corporation, who provides cash for construction in exchange for the tax credit. To do this, the building owner must become a partner with the investor, who becomes and must remain an owner of the building for

How it works Developers go through a threestep approval process, which is managed by the State Historic Preservation Office and the National Park Service. First is determining the building’s eligibility for the credit. Second is submitting a detailed rehabilitation plan, which may require amendments before it’s approved. Last is the building certification, proof that the work was done to the Secretary of the Interior’s Standards for Rehabilitation and that the building is ready for occupancy. There is a five-year period of compliance or the developer risks recapture of the credit, which reduces each year by 20 percent, said Kopi-

five years after the building is ready for occupancy. David Schon, a partner with law firm Nixon Peabody who consults on projects in Detroit, said there is a small industry of institutional investors in federal historic tax credit products, usually financial services firms such as banks and insurance companies. The amount the investor contributes to the partnership varies, he said. They could provide a dollar for every tax credit dollar or contribute more or less depending on such factors as project size and construction risk.

etz. That is, you cannot alter the building in a way that is inconsistent with the national standards or turn rental units into condominiums. After five years, “You can do what you want,” subject of course to local rules, said Kopietz. The two key federal tax credits for older buildings are a 20 percent credit for historic buildings and a 10 percent credit for non-historic buildings built before 1936. The 20 percent credit is for “qualified rehabilitation expenditures” on buildings listed on the National Register of Historic Places individually (these buildings must be at least 50 SEE CREDITS, PAGE 12

The $94 million restoration of the 19-story David Whitney Building opened late last year in Grand Circus Park as a mixed use development including a boutique hotel, apartments and a restaurant.

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DETROIT 2.0 | REHABS

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years old) or certified by the Secretary of the Interior as having significance to a registered historic district. The project must follow the standards of the Secretary of the Interior, such as restoration of original windows or roof and using appropriate materials. Projects also must be income-producing, through any mix of office, retail, industrial or rental apartments, which can be converted to condominiums after five years. “The standards are designed to make sure the work you do on the building maintains any remaining historic character, but they don’t make you put back what was lost before you got there,” said Schon. “People negotiate with the Park Service over their plans to make the building functional.” Sometimes plans change. In the case of the David Whitney Building, Di Rita said they thought many of the original mahogany window sashes on upper stories were too old to restore, so they got approval to replace half the windows as long as they appeared the same as the original ones when viewed from street-level. Then during construction they discovered they were in better condition than expected; they saved 800 out of 1,100 windows. “It didn’t save us a penny, but it was the right thing to do. We thought if these could be made sound, they are a unique historic feature of the building,” said Di Rita. “It was painful for us to think of taking those out.” The other federal credit for older buildings is a 10 percent credit for buildings constructed before 1936 that are not certified historic structures or part of a city’s historic district. Projects using the 10 percent credit must be rehabilitated for non-residential use. Kopietz points to the Madison Theatre building on Broadway Street as an example of a building restored with the 10percent credit. Because the building, restored by Dan Gilbert’s Rock Holdings Inc., had undergone so many changes over the years, he said, there was little left of its original historic character. There are myriad and complex ways to finance historic and older buildings beyond these two credits, which is why most developers consult with experts. “I talk to a lot of really experienced real estate developers who know nothing about

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Tax credit recipients Properties in the city of Detroit that have been granted Historic Preservation Tax Incentives over the past decade, according to the National Park Service: 2005 Martin Gardens House, 1737 25th St. Martincheck Gardens Apartments, 1739-55 25th St. Heyn’s Department Store (Lerner), 1241 Woodward Ave. The Bedell Building and Woolworth’s, 1249 and 1261 Woodward Ave. Albert’s, 1437 Woodward Ave. Clark Apartments, 1185 Clark St. 2006 Graphic Arts Building, 41-47 Burroughs Ave. Kresge Headquarters Build ing, 76 W. Adams Ave.

James Wilson House, 74 Charlotte St.

The Whittier Hotel, 415 Burns St.

Pulford-Rennie House, 66 Charlotte St.

Louise Spencer House, 39 Peterboro St.

Detroit Fire Department Re pair Shop, 3434 Russell St.

Gillman House, 61 Peterboro St.

Richards-Oakland Motor Co., 440 Burroughs Ave. Book-Cadillac Hotel, 1114 Washington Blvd. Wesch Building, 4200-4222 W. Vernor Highway

Second and Lothrop Apartment Building, 7409, 7411, 7415 and 7417 Second Ave.

2014

2013

Charles Rischert Bakery, 2919-21 Woodward Ave.

E & B Brewery Lofts, 1551 Winder St.

2010

Michigan Bell and Western Electric Warehouse, 882 Oakman Blvd.

Garden Theater, 3933 Woodward Ave.

Lafer Building, 1323-1325 Broadway Ave.

The David Broderick Tower, 10 Witherell St.

Beethoven Apartments, 4474 Third Ave.

The Security Trust Co. Building, 735 Griswold St.

Detroit Candy Co. Building, 1528 Gratiot Ave.

Brentwood Apartments, 487 Prentis St.

La Vogue Apartments, 225 Merton Road

2015

52 E. Forest Ave.

Scotten Rowhouse, 19211923 Scotten St.

General Motors Research Laboratory, 485 and 495 Milwaukee Ave.

Whitdel Apartments, 1250 Hubbard St.

2011

Sheldor Apartments, 1025 Newport St.

Davenport Apartments, 149 Davenport Ave. Birchmont Apartments, 112 Seward St.

2009

Garfield Manor Apartments, 71 Garfield Ave.

Chalmers Building, 14436 E. Jefferson Ave.

Iodent Building, 2233 Park Ave.

4107 Cass Ave.

Crestwood Apartments, 1099 Van Dyke St.

Newton Apartments (Delaware Court), 628 Delaware St.

2012

Caille Brothers Building, 6200 Second Ave.

Parker Pharmacy, 3961-65 Woodward Ave.

Kensington Apartments, 1085 Van Dyke St.

Palmer Lodge Apartments, 225 Covington Road

2008

Hotel Fort Shelby, 525 W. Lafayette Blvd.

Newberry Hall, 100 E. Willis St.

Chase Tower, 611 Woodward Ave.

David Whitney Building, 1553 Woodward Ave.

John Harvey House, 97 Winder St.

Odd Fellows Hall, 8701-8711 W. Vernor Highway

Standard Oil Co. gas station, 3169 Woodward Ave.

Sherbrooke Apartments, 615-617 W. Hancock St.

Dime Building, 719 Griswold St.

Ferndale Apartments, 871541 W. Vernor Highway

tax credits,” said Kopietz. For example, there are two federal credits often paired with the rehabilitation credits. One is the New Markets Tax Credit, which encourages investment in low income areas on commercial or mixed-use real estate projects with at least 20 percent of the income coming from sources other than residential rental property. The other is the Low-Income Housing Tax credit for low- and moderate-income apartments, which was used to help finance the mixed income Strathmore Apartments Project on Alexandrine in Midtown, which had been an eyesore for decades, said Schon. “It’s significant for including both market rate and low-income units in a very high demand neighborhood.” What about an old building that’s not on the National Register of Historic Places? Schon advises developers to determine if it’s eligible by first talking to a preservation consultant. “Buildings are added all the time.”

What’s next Looking to the next five to 10 years, three downtown buildings are frequently mentioned as candidates for the 20 percent rehabilitation credit: The long-vacant 38-story Book Tower on Washington Boulevard, the art deco David Stott Building in the Capitol Park Historic District, and the former Detroit Free Press building on Lafayette Street, vacant since 1998. But there is much more. Hosey said with most of the downtown and Midtown buildings either done or spoken for, the trend will radiate along the riverfront, especially as prices go up. One candidate: The Whittier Tower on the Detroit River, an example of Italian Renaissance architecture. “It has a long history,” he said. “The Beatles once stayed there.” While Kopietz has hopes for the iconic Michigan Central Station, he sees many opportunities with the 10 percent federal credit. “We’ve got thousands of buildings in Detroit that can use (that),” he said.

“It’s highly underutilized.” Schon sees the city’s many historic schools, commercial and industrial buildings, and smaller apartment buildings as excellent candidates for rehabilitation using the historic tax credit. One building he’s particularly interested in: the former manufacturing facility for Kelvinator refrigerators on the city’s west side. “It’s a building with a lot of historic significance,” he said. McKay at the state’s preservation office said the big assembly and production plants are the next big thing, though financing will likely be very complicated at first. “It will happen. ... Someone will crack that nut and others will refine it.” Above all, Schon said, people need to understand that while these tax credits can be highly complex, it’s not a reason to avoid jumping in. “It’s completely doable,” he said. “Detroit is just ripe for more use of the program.” 䡲

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DETROIT 2.0 | ARENA DISTRICT

‘Residential everywhere’ Thriving neighbors seen as key to District Detroit’s sustainability

By Bill Shea bshea@crain.com

The urban planning consultant for the Ilitch family’s grand vision of a sprawling mixed-use rehabilitation of 50 blocks around the new Detroit Red Wings

arena said people living in the district are the key to making it work. “What we want is a great walkable, personable neighborhood made of as many Richard Heapes people living their lives as possible,” said Richard Heapes, co-founder and managing partner of White Plains, N.Y.-based Street-Works. The company was hired by the Il-

itches’ Olympia Development of Michi gan to be the lead urban planning designer of its The District Detroit plan of residential, retail, bars, restaurants, offices and green spaces around the $627 million arena, which is slated to open in 2017. Street-Works specializes in mixed-use and commercial development, planning and financing, and it’s bringing that expertise to bear on Olympia’s plans. “Our key strategy is to have residential almost on every block coordinated with new development,” Heapes said. “That’s the strategy; there is residential everywhere.” The area immediately around the arena will have around 200 apartments and condos intended to appeal to a range of demographics from single or new-family millenni-

als to empty-nest boomers. “You can’t have a neighborhood without neighbors,” Heapes said. Additionally, Olympia is renovating the historic H o t e l E d d y s t o n e into residential units, including making 20 percent of it into affordable housing. Olympia has stressed that the area won’t just be a hive of nightlife pegged to hockey games and concerts at the massive arena rising at Woodward Avenue and I-375. It needs places where residents can buy life’s necessities and luxuries. “It has to be a place to get a burrito at Chipotle,” Heapes said. “It has to provide the day-to-day stuff. It’s the regular stuff of living in the city.” Olympia is in talks with local, regional and national retailers and developers.

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By having housing with entertainment, jobs and necessities such as grocery stories nearby, the district will have a residential population that makes for a sustainable neighborhood, Heapes said. “They will want to live here, to stay and engage the city more,” Heapes said. Heapes also stressed the importance of Wayne State University putting its new business school — thanks to a $40 million donation announced late last month by Red Wings owners Mike and Marian Ilitch — and how the location will affect WSU students. “By moving closer to downtown they can now engage directly, physically with businesses in terms of mentorships, internships,” he said. “When you move to this neighborhood, you’re now engaging with Detroit. It’s a great way to keep kids in the city. There’s more diversity of experiences and people.” Having an academic institution in the district further bolsters its sustainability, he said. It also helps with the goal of avoiding the error that other sports venue projects elsewhere have made by promising that

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IMAGES COURTESY OLYMPIA DEVELOPMENT

Steel has started to go up for the Detroit Red Wings’ $627 million arena, scheduled to open in 2017.

stadiums and convention centers are a cure-all. “The classic mistake in city planning is people looking for silver bullets,” Heapes said. “They would fire off their one silver bullet, and it didn’t do anything. It cleaned up a couple of blocks.” The District Detroit plan is to clean up 50 blocks, and either build housing or retail on them or upgrade the infrastructure to lure outside developers. As part of the public-private fi-

nancing plan for the arena, Olympia has promised at least $200 million in concurrent development investment around the venue. If that happens, it could ward off the sort of criticisms seen of projects elsewhere (usually sports arenas built with public money) that promise sweeping economic and job benefits thanks to a boom of additional development, but have failed to deliver. SEE ARENA, PAGE 18

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DETROIT 2.0 | ARENA

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The Ilitches have made similar pledges: Using a study from a University of Michigan economist, Olympia predicts $1.8 billion in economic impact and thousands of new jobs because of the arena district and its construction. Such economic impact estimates are often criticized by academics for including overly optimistic multiplier estimates. By creating entirely new neighborhoods from the start, Olympia can avert the sort of stalled ballpark projects that have happened elsewhere, Heapes said. “What the arena does that’s different (is) it’s not a hockey venue,” he said. That’s because the Red Wings will play there up to 60-some days a year, but the building is intended be used for many other events. “This thing is going to be fired up 180 days a year, during the whole breadth of the year,” he said. That’s a contrast from the 10 Detroit Lions games at Ford Field from August to January, and 81 games for the Detroit Tigers at Comerica Park from April through September. “They have seasons,” Heapes said. Construction of the arena began in September 2014, but it’s unclear when work on residential units and other district elements will begin. “Right now, it’s hard for people to believe the Cass Corridor could become the center of Detroit in terms of center of activity,” Heapes said. 䡲 Bill Shea: (313) 446-1626. Twitter: @Bill_Shea19

DENNIS ALLAIN RENDERINGS

A rendering of the new arena and surrounding district.

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DETROIT 2.0 | NEIGHBORHOODS

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CDB Living In The D_New CD Magazine sized 10/8/2015 10:09 AM Page 1

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“HOW CAN WE ALL HELP RE-ENERGIZE DETROIT?”

As a sponsor of the Detroit Homecoming event, DTE Energy is encouraging more engagement and investment in the city. We’re doing our part by investing $1.2 billion in our infrastructure in Detroit over the next 10 years. We’re also working with the Detroit Public Lighting Authority to install reliable LED streetlights throughout the city. Additionally, we have been improving the neighborhood around our headquarters by renovating a vacant Art Deco building to be a LEED-certiﬁed facility, and designing a nearby park to provide a vibrant new public space. And, we have doubled our procurement spend to $160 million and are continuing to look for opportunities with Detroit business partners. For over 150 years, DTE Energy has been powering Detroit. Now, we are proud to partner with others to empower Detroit.

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DETROIT 2.0 | NEIGHBORHOODS

Pride, and ownership, for vacant land City program allows homeowners to buy next-door lots, with just a credit card

By Marti Benedetti mbenedetti@crain.com

For the past few years, Latesea Howard looked longingly at the vacant lot next door to her Detroit house. She thought it would be a perfect space for her children. Three months ago, through a flier in the mail, Howard learned that she could purchase the lot for $100 through the D e t r o i t L a n d Bank Authority â&#x20AC;&#x2122;s Side Lot Program. â&#x20AC;&#x153;I was already taking care of it, and my front yard ventures into the lot just right,â&#x20AC;? she said. Howardâ&#x20AC;&#x2122;s side lot is one of

2,571 vacant lots sold in the city since the program started in June 2014. â&#x20AC;&#x153;We didnâ&#x20AC;&#x2122;t know what this program would do,â&#x20AC;? said Craig Fahle, DLBA director of public affairs. â&#x20AC;&#x153;Obviously, there was pentup demand for residents to buy these lots. Hundreds of people have come to ask us if they could buy the vacant lot next door.â&#x20AC;? Property owners can buy adjoining city-owned lots from the land bank online with a credit card at buildingdetroit.org. Buyers enter their home address into the system, and the vacant lot

next door will pop up. â&#x20AC;&#x153;We try to make it simple,â&#x20AC;? Fahle said. In addition to credit cards, lots can be purchased with a cashierâ&#x20AC;&#x2122;s check or money order, not cash, at the DLBA office downtown and at special side-lot sales the Land Bank hosts in individual city districts. The Side Lot Program was the idea of a team at the DLBA. Detroit has about 55,000 vacant lots, and 20,000 side lots are for sale, Fahle said. â&#x20AC;&#x153;Before we did this, the city

â&#x20AC;&#x153;Before we did this, the city had about 300 side lot sales a year. Now, weâ&#x20AC;&#x2122;ll do that many sales in a day.â&#x20AC;? Craig Fahle, Detroit Land Bank Authority director of public affairs

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had about 300 side lot sales a year,” he said. “Now, we’ll do that many sales in a day.” For those property owners who don’t buy online, the authority has two fairs — winter and summer — in Detroit high schools in various city districts. Typically, fairs are hosted when there is significant new inventory to sell. Those who purchase lots in person walk out with a deed to the property in about 40 minutes. “People like to have (the deed) paper in their hand,” Fahle said. He said buying adjoining lots has been a source of frustration for Detroit property owners for years. “One guy was trying to buy a lot for 40 years,” Fahle said. “In the meantime, many homeowners have been taking care of the vacant lots near them.” Jerri Freeman, a provider relations representative for B e h a v i o r a l H e a l t h P r o f e s s i o n a l s I n c . , a mental health agency in Detroit, is one of those property owners. “I’ve been keeping (the lots) up all this time,” she said. Her lots are dotted with a variety of trees, flowers and grass, which she hires a service to cut. Freeman has owned her west side Detroit home for 30 years. After about 10 years of trying to buy the vacant lots on each side of her house, she was able to do so this year when the Side Lot Program came to Mum f o r d H i g h S c h o o l . Next, she would like to buy the two lots that adjoin her vacant lots. “I entertain in the yards and plan on installing a privacy fence. I want it to be looking nice,” Freeman said. She is not deterred by the prospect of having to pay taxes on five properties. Freeman said although her street has several vacant parcels, her neighbors are trying to start a block club. “And some of those people have expressed they want to buy their side lots, too,” she said. Howard, a housewife, said with her next-door lot, which she plans to fence in, her children can play safely in the larger yard. “What I bought is a great value,” she said. 䡲

Page 23

LARRY PEPLIN

Jerri Freeman was able to buy the vacant lot next to her house, which she was already taking care of.

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DETROIT 2.0 | FOOD & DRINK The Margherita pizza at the Jolly Pumpkin.

Savoring the resurgence Food writer gets reacquainted with Detroit’s burgeoning restaurant scene

By Nathan Skid Special to Crain’s Detroit Business

Nathan Skid covered the local restaurant industry for Crain’s Detroit Business for six years. He is now a video producer for Advertising Age in New York City.

Technically, the reason for my trip to Detroit was to attend my friend Shawn’s diaper party, but also I had an ulterior motive — food. And not just the Coney Island hot dogs, pastrami sandwiches, pizza or sliders I’ve grown to love. I was here to bear witness to Detroit’s blossoming food scene: the Detroit I’ve been reading about for the past year and a half. I wanted to see firsthand the Detroit that eluded me during my six-and-a-half-year stint covering the city’s restaurant scene. Not that it was a barren wasteland of sad-sack restaurant chains and all-you-can-eat buffets, but now there is undeniable momentum. I left Detroit at a precarious time in the city’s culinary history. From the financial crash in 2008 through late 2009, I wrote one culinary obituary after another, most notably the collapse of Matt Prentice’s empire. I rode the rollercoaster up the hill, but left before the free fall. This was my chance to enjoy Detroit’s comeback. Friday, 7:30 a.m. The black town car pulled up as I walked out of my brownstone in Park Slope, Brooklyn. The autumn air was crisp; the sun was shining.

The flight from La Guardia to Detroit Metro takes just over an hour. I texted Shawn to let him know our plane arrived a little early, but I needed a favor. I was low on caffeine and there was an old favorite I had in mind, Great Lakes Coffee in Midtown. James Cadariu, roastmaster and co-owner of Bloomfield Hills-based Great Lakes Coffee Roasting Co., says the company spent about $400,000 opening the coffee shop at 3965 Woodward Ave. in the spring of 2012. It was a risky move at the time. Except for a couple of small shops, pretty much the only other game nearby at the time was the Starbucks on the corner of Mack and Woodward or the Tim Hortons inside the Compuware Building. No one knew if Detroiters would shell out $4.50 for a cup of Ethiopian Yirgacheffe pour-over coffee. Turns out, they would. There was so much pent-up demand for restaurants that it manifested in a slew of activity. But opening a restaurant in downtown Detroit is not as cheap as it was just a few years ago. Real estate broker Kees Janeway, founder and CEO of Birminghambased Kees Corp. LLC, said in 2013, the average price for commercial retail

space in the most popular destinations, Midtown, Corktown, downtown and West Village, was $13 to $15 per square foot. Today, that price is inching toward $20 per square foot, mostly driven by what he calls the “Gilbert effect.” “In downtown Detroit, you have Bedrock and then a handful of other players,” he said. “The market is coming around to (Dan) Gilbert’s pricing, causing the rents in areas around downtown Detroit to increase.” Janeway said Gilbert’s Bedrock Real Estate Services LLC is asking for $25 per square foot, plus triple-net charges, for a five-year lease. “To justify $25 a foot, you need substantial volume in sales,” he said. “The only guys capable of that right now are food and beverage operators.” The Gilbert effect is giving other landlords leverage when it comes to setting the terms of their leases. “Landlords in Detroit are saying, ‘Come back with your best and final offer,’ because there are four other offers on the table,” Janeway said. “There is that much restaurant competition right now in the city of Detroit.” The increase in restaurant openings is also creating more competition for liquor licenses. Patrick Howe, an attorney for Royal Oak-based Howard & Howard Attorneys PLLC who specializes in liquor licenses, said it’s getting harder to get a Class C liquor license in Wayne County, driven by supply and demand. “Last year, it took a couple of weeks to find a liquor license,” Howe said. “Now it’s taking about a month to find one.” Howe said it costs between $40,000 to $50,000 to locate and secure a license in Wayne County. A year ago, that price tag was around $20,000. The main reason for the higher prices is because the Michigan Liquor Control Commission cannot issue any new Class C liquor licenses in Wayne County. The MLCC issues just one liquor license per 1,500 residents, and Howe said Wayne County is about 60 licenses over its quota. Unfortunately, Wayne County’s

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population isn’t climbing quickly enough to create enough licenses to keep up with commercial demand. “What happens when we can’t find any more liquor licenses?” Howe asked. “I think it’s something that could happen.” Friday, 11:30 a.m. My Costa Rican pour-over at Great Lakes Coffee was perfect as usual, and Shawn, who is notoriously anti-java, actually enjoyed his Sexy Mexican, a combination of coffee, chocolate cinnamon and spices. Cadariu says even though sales are down at the flagship store this year, a hangover from the construction of the M-1 Rail line, he and his team are looking for a 7,500 squarefoot space to open a roastery, coffee shop and training facility. “We want to open something like what Blue Bottle Coffee (a Californiabased coffee chain) has, in that they have a production facility, a small place to get coffee and then a training facility that is open to the public as well,” he said. Cadariu says he is amazed at how much the city has changed since he opened Great Lakes in Midtown but warns that its growth could be stymied by its reliance on the car as a favorite mode of transportation. “Really, for it to work, the city has to be more walkable,” he said. “If the strategy is based on the suburban model of convenient parking, it won’t work.” Walking is Detroit’s final frontier. Friday, 1 p.m. With the caffeine pumping through our veins, we decided to check out the highly touted 2015 Detroit Free Press Restaurant of the Year, Selden Standard. Even though it’s throw from Great Lakes Coffee, we decided to drive. Old habits die hard. Shawn found a space on Second Avenue, next to a Shinola-branded bike rack, and we settled in for a 40minute wait. I sent a quick text to James Rigato, co-owner of the newly opened Mabel Gray, to see if we could sneak in for dinner. Selden Standard is a beautiful restaurant with its white subway tile and its mix of light and dark woods. Investor Evan Hansen and Executive

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Chef Andy Hollyday spent $1.3 million turning the 5,600-square-foot building on the corner of Second Avenue and Selden Street into the 85seat, ultra-modern-yet-approachable eatery. “It wasn’t cheap, but we liked the location because it was on an island, not in the midst of other developments,” Hollyday said. “But we are betting that with the new arena, Wayne State expanding and Midtown becoming denser, the development will catch up to us.” Hollyday, a Toledo native and graduate of New York’s Culinary Arts Institute, cut his teeth working under Paul Bertolli at Oliveto in Oakland, Calif., before moving to Michigan to work under Master Chef Takashi Yagihashi at Tribute. After a six-month stint at a restaurant in Chambéry in the French Alps, he moved back to Michigan and took the reins at the former Ritz-Carlton, Dearborn until he found a home working under Michael Symon at Roast. The rest is history. Shawn and I took a high-top table near the cedar-wood chef’s counter. Two wood-burning fires glowed in the kitchen. Shawn ordered the smoked pastrami sandwich with Giardiniera, gruyere, grilled onion, mustard aioli ($14) and a cup of the soup du jour, squash bisque ($5). I opted for a light lunch of vegetables Carpaccio with caper, lemon, Parmesan ($8) and a bowl of seafood

stew with spiced tomato broth, aioli and grilled bread ($18). The smoked pastrami was peppery and perfectly cured, the bread crisp and buttery. The seafood stew was a little thicker than a traditional bouillabaisse, and deeply satisfying, although I would have loved a little more broth to soak up with that amazing crostini. Long after our waitress cleared our plates, we sat enjoying our surroundings and conversation. But we were cut short by a text from Rigato. “Oh. Thanks for the heads up,” he wrote. “Come in at 4.” Friday, 4:30 p.m. We’re late. Rigato, donning a crisp Detroit Denim apron, was pacing and talking on his cellphone behind his restaurant as we pulled into the parking lot next to Mabel Gray at 23825 John R Road in Hazel Park. Rigato, executive chef at The Root in White Lake Township, and a former contestant on the popular Bravo TV reality show “Top Chef,” and his financial backer, Ed Mamou, spent about $500,000 to convert the longtime diner into Mabel Gray. Rigato said he opted to open the 43-seat restaurant in Hazel Park instead of Detroit because there was a glaring void in Hazel Park’s restaurant scene. “Hazel Park is cool, but it didn’t SEE RESTAURANTS , PAGE 28

“We are betting that with the new arena, Wayne State expanding and Midtown becoming denser, the development will catch up to us.” Andy Hollyday, executive chef, Selden Standard

Vegetables Carpaccio with caper, lemon, Parmesan at Selden Standard.

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DETROIT 2.0 | FOOD & DRINK

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The patty melt at Mabel Gray.

RESTAURANTS FROM PAGE 27

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have a funky chef-driven concept,â&#x20AC;? Rigato said. â&#x20AC;&#x153;Detroit is awesome, but when I think about a market like that, I donâ&#x20AC;&#x2122;t know what I can contribute.â&#x20AC;? We said our hellos, then headed in. The dinner rush was coming, and if we wanted to get a real sense of the cuisine, now was the time. The space is Brooklyn-chic with its moose antlers, abundant natural lighting worn-plaster walls and â&#x20AC;&#x2122;90s R&B soundtrack. We found two seats at the bar, ordered a couple of Hazel Park and Parcels made with Valentine vodka, grapefruit, Aperol, lime, simple syrup and grapefruit bitters. I had Mabel Grayâ&#x20AC;&#x2122;s lemon mine with Liberator curd huckleberry gin instead. puree with toasted When a chef asks Swiss meringue and you what you want to candied lemon. try, there is only one correct answer: â&#x20AC;&#x153;Just bring out whatever you want. Weâ&#x20AC;&#x2122;re hungry.â&#x20AC;? The next hour was kind of a blur. The meal started with the savory fried banana with mole poblano, queso fresco, jalapeno and peanut ($6). Next came Shawnâ&#x20AC;&#x2122;s favorite, a beef heart empanada with avocado mousse ($11). The fried Michigan Pork Belly with onion mousse, pickled slaw and ong bak sauce ($12) was cooked to perfection, but the showstopper was the Michigan beef patty melt with pub cheese, marinated onion and house made English muffin ($12.50). For dessert we had lemon curd, huckleberry purĂŠe with toasted Swiss meringue and candied lemon. Instead of trying to make his

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name in a bigger city, Rigato aimed to create a restaurant that could compete in San Francisco, New York City or Chicago. “When I measure a great restaurant it’s like, could you pick it up and put it in San Francisco and would it still be packed?” Rigato said. “With Selden Standard and Chartreuse, the answer is ‘yes,’ those would be good anywhere. I think Detroit’s restaurants are contenders.” But Rigato is not shy when it comes to talking about the challenges of Detroit’s food scene. “There are a lot of restaurants opening up, but there aren’t a lot of chefs up for grabs,” he said. “The boom needs to be in calibration with the talent pool, and the talent pool is kind of thin.” But there are some standouts and Garrett Lipar, executive chef at Grosse Pointe’s Marais, is as about as bright as they come. It may sound hyperbolic, but when Noah Dorfman and Lipar transformed a mediocre coffee shop into an inexplicable avant-garde restaurant in Torino , it forced the local restaurant scene to take notice. Lipar said he always knew Torino would be short-lived, adding that the limitations of that tiny kitchen eventually forced it to close. “Torino raised the bar, and now I want to do that again,” Lipar said. “I had a lot of offers in places like Seattle, New York, Chicago, Cleveland, but ultimately I want to stay in the state and continue to grow my skill set before I open something on my own.” Lipar joined forces with Dave Gilbert, formerly executive chef at Forest Grill in Birmingham, at Marais, at 17051 Kercheval Ave., where the tasting menu costs $135 per person. The duo has one goal, to be named one of San Pellegrino’s Top 50 Restaurants in the World. Lipar and Gilbert’s focus on fine dining runs somewhat contradictory to the ethos of Detroit’s young chefs. “I don’t have to worry about anything else other than if this is the best restaurant in the country,” Lipar said. “For us, it’s funny to have to defend fine dining. It’s an odd time right now.” Shawn and I hung around Mabel

Page 29

Gray for awhile, chatting with a couple of ladies at the bar who were very interested in what we were eating. So interested, they copied our order, dish for dish. But like all good things, this meal had to come to an end. Shawn and I were headed downtown to play some cover songs with our old band in a few hours at Bookies Bar and Grille. Friday, 10 p.m. There are bars and then there are bars, and Bookies, located at 2208 Cass Ave., is my kind of bar. It isn’t the hippest place in the city, and you won’t find any housemade bitters or bottles of Lillet, but I like what the place represents. John Lambrecht opened the 9,000-square-foot tri-level bar in its current location in early 2009, after being forced to leave its former home in the Book Tower on Washington Boulevard. It took guts to open a bar in the Cass location at that time. The place was, and still is, surrounded by vacant parking lots. But not far away, the new Detroit Red Wings arena is under construction, so it is hoped the gamble will pay off. “We’ve been waiting for this for a long time,” Lambrecht said. I won’t bore you with the details, but the show was loud, sloppy and too much fun. By 2 a.m., the place was empty save the few people who came out just to say, “Hey.” My bandmates finished packing up the gear, and the whiskey had

caught up to me by then, rendering me worthless. Shawn stayed sober, bless his heart. It was 2:30 a.m., too late for Red Coat Tavern , so we had to settle for second best, Telway at 27000 John R Road in Madison Heights. Saturday, 3 a.m. I don’t remember the drive to Telway but I do remember eating a couple of sliders, chili cheese fries and downing a large Coke. The regret didn’t hit me until I was halfway through my slice of coconut cream pie. I pushed it aside and stepped out into the cold rain, head swimming, ears ringing and bone-tired. It was time for bed. Saturday, 9:30 a.m. The only cure for a hangover like this one is a big breakfast, so we headed up to Commonwealth in Birmingham. SEE RESTAURANTS , PAGE 32

Breakfast at Commonwealth: two

eggs over medium, bacon, house-made sausage and sweet potato hash.

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WHY KRESGE BELIEVES IN

A BOLD URBAN FUTURE FOR DETROIT & THE NATION

East, west, north, south: cities in their grit and glory are forging a new dynamism – each in its own way – through connection and cooperation. New players complement the tried and true; new possibilities offer a frank hope. There are new styles of decision-making, too, that are inclusive and distributed.

ANNUAL REPORT 2014 Read the report online at tinyurl.com/Kresge2014. To receive a copy, send name and mailing address to media@kresge.org.

Those of us invested in community – the public, private, nonproﬁt and philanthropic sectors – are stepping up, electing to participate beyond our traditional boundaries and areas of interest. What is emerging is a style of philanthropy that is visionary and strategic. It is unafraid to ask hard questions and fearless in the face of great challenge. Unlike our practices of the past, almost nothing is off-limits today. We are willing to take risks and propose solutions commensurate with the size of the challenge at hand. This new way of working has become central to the ethos at The Kresge Foundation. We believe this approach represents the next generation of philanthropy for us and for the entire sector. It arises from our aspiration to effect meaningful change in society. It has been shaped and tested by our efforts in Detroit. The extraordinary circumstances associated with the city’s bankruptcy propelled us in unexpected directions. It caused us to stretch and grow in ways we hadn’t thought possible – creatively, analytically, collaboratively and ﬁnancially. In the pages of The Kresge Foundation Annual Report 2014, you will read how we are expanding opportunities in America’s cities through next-generation philanthropy. We invite you to read about the six core beliefs validated during our journey in Detroit. Similarly, we will acquaint you with the contributions our national programs are making to the futures of cities across the United States. Bold is not a goal; it is a byproduct of collective effort. Bold is the urban future that awaits us.

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WHY KRESGE BELIEVES IN

A BOLD URBAN FUTURE FOR DETROIT & THE NATION

ANNUAL REPORT 2014 Read the report online at tinyurl.com/Kresge2014. To receive a copy, send name and mailing address to media@kresge.org.

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DETROIT 2.0 | FOOD & DRINK ger beer and fresh lime to make Gin Mules, the perfect mixed drink. The nearest Jet’s Pizza would provide dinner. The party started as B.Y.O.B. but as the night progressed, nearly everyone switched from beer to gin mules. After all, Valentine’s Liberator is one of the world’s best gins. Old Tom Gin was named the 2014 world’s best cask gin by the World Gin Awards in London. Sometime around midnight, with the party winding down, I crashed. Sunday, 10 a.m.

The Jolly Pumpkin

RESTAURANTS FROM PAGE 29

I had my favorite, the Common Breakfast: two eggs over medium, bacon, house-made sausage and sweet potato hash ($11.50) and a cup of AA Top Karani coffee, from Kirinyaga, Kenya ($4.50). Shawn had the fried egg sandwich with guacamole, tomato, Pinconning cheddar, hot sauce, toasted Dakota multigrain bread and a side salad ($9.50). His wife, Meredith, had the same. After breakfast, we headed to Ferndale to see what was new and do a

little record shopping at Found Sound. It turns out a lot has changed in Ferndale over the past year and a half. Luckily, Pinwheel Bakery at 220 W. Nine Mile Road was still there. We bought a couple of ridiculously good oatmeal sandwiches. I got another cup of coffee and we headed back to Pleasant Ridge. It was time to get the house ready for the diaper party (a generally all-male get-together where diapers are the gifts for the father-to-be and the drinks are copious). We decided to pick up some of Ferndale-based Valentine Distilling Co.’s Liberator Gin, Maine Root gin-

I honestly can’t remember the last time I had breakfast at a place with Log Cabin syrup bottles at each of the tables. But the Whistle Stop Diner , in the former Mae’s at 24060 Woodward Ave., is a short walk from Shawn’s house, so it would have to do. After a short wait, we were seated and eating within 10 minutes. And the food was pretty good, too. Shawn ordered the crab cake eggs Benedict, while I ordered another basic breakfast, this time with biscuits and sausage gravy. We didn’t have much time to dawdle. My flight was taking off in a few hours and there was one last place I wanted to see. Sunday, 11:30 a.m. As we pulled into our parking spot on Canfield Street, women and kids

Restaurant directory Here are locations visited by Nathan Skid on his whirlwind Motown culinary tour. Warning: If you attempt to duplicate the feat, Crain’s assumes no responsibility for your calorie consumption. Bookies Bar and Grille

Jolly Pumpkin

The Telway

2208 Cass Ave., Detroit www.bookiesbar.com

441 W. Canfield St., Detroit www.jollypumpkin.com

27000 John R Road, Madison Heights; also 6820 Michigan Ave., Detroit

Commonwealth

Mabel Gray

Valentine Distilling Co.

300 Hamilton Row, Birmingham gocommonwealth.com

23825 John R Road, Hazel Park mabelgraykitchen.com

161 Vester Ave., Ferndale valentinedistilling.com

Great Lakes Coffee

Pinwheel Bakery

Whistle Stop Diner

3965 Woodward Ave., Detroit greatlakescoffee.com

220 W. Nine Mile Road, Ferndale www.pinwheelbakery.com

Jet’s Pizza

Selden Standard

24060 Woodward Ave., Pleasant Ridge; also 501 S. Eton St., Birmingham whistlestopdiners.com

Locations throughout the area jetspizza.com

3921 Second Ave., Detroit www.seldenstandard.com

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carrying shopping bags were milling about, a surefire sign of a thriving retail economy. We were heading to Jolly Pumpkin for lunch. To give you an idea how long it can take for a story to come to fruition, I received this email from one of the partners of Northern United Brewing Co., Jolly Pumpkin’s owner, at 6:31 a.m. on Jan. 31, 2012: “Jolly Pumpkin RO is in a “no comment” stage until we get all of our approvals.” The brewpub was supposed to open in a former bank in Royal Oak, but real estate was a mess and the deal fell through. Tony Grant, CEO of Northern United Brewing Co., said they then turned their focus to Detroit. The 6,000square-foot brew“Call it pride or pub cost more respect. But we than $1 million to get up and runwant to be (in ning, but Grant Detroit).” said the payoff is worth the price of Tony Grant, CEO, admission. Northern United “Call it pride or Brewing Co. respect. But we want to be here,” Grant said. “There is a resurgence going on, and it’s because of many different reasons. But one thing is clear: The city is going in the right direction.” I ordered an Oro de Calabaza ($7), a beer James Cadariu introduced me to years ago upon our first meeting, and a Margherita pizza ($11) at the counter. Shawn and Meredith took a seat at a table against the windows, and we just sat there for a minute, taking it all in. To some people, Jolly Pumpkin is just another restaurant to open in the city — another place to go before a Wings, Tigers or Lions game. But to me, it’s more, because I know what it took to get it here. For me to be able to drink this beer, in this restaurant, at this location, in this city, is remarkable when you consider all the little things it took to make it a reality. I took my time finishing that beer. I didn’t want to leave. There was too much left to do, too many new things to see. Until next time, Nate Skid

A Partner With Communities Where Children Come First WKKF is proud to partner with diverse leaders, grassroots organizations, institutions and other community partners in Detroit to ensure that children thrive.

wkkf.org

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Helping Detroit attract and keep talented people, expand economic opportunity and create a culture of engagement

Knight Foundation supports transformational ideas that promote quality journalism, advance media innovation, engage communities and foster the arts. The foundation believes that democracy thrives when people and communities are informed and engaged. For more, visit knightfoundation.org.

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Helping Detroit attract and keep talented people, expand economic opportunity and create a culture of engagement

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DETROIT 2.0 | REDEVELOPMENT

On the move in Midtown Remodeling, repurposing, new construction add up to more living space in Detroit

By Marti Benedetti mbenedetti@crain.com

As the demand for living in Detroit’s Midtown continues to accelerate, so does the pace of restoring its historic apartment buildings with patrician names such as S t r a t h m o r e , R a i n e r C o u r t and Forest Arms . “There has been a steady stream of rehab here for the past 20 years, but in the past three to five years, the pace has increased,” said Sue Mosey, executive director of Midtown Detroit Inc. “Even years ago, there was value in this neighborhood because of the historic properties and their National Historic designations.” As seen in the accompanying photos (See Page 37), new living space in Midtown goes beyond

the historic apartments. It includes adaptive reuse of a large office building and new construction on vacant property. Roughly $100 million has been or is being spent to reconstruct and restore the nine buildings

pending on the location, size and condition of the unit. Mosey said the majority of the developers are local and have long-term relationships with Midtown Detroit. “Over time, we have built a group of developers “Over time, we have built a … and group of developers . . . and helped them with helped them with getting getting fifinanced.” nanced,” she said. Sue Mosey, executive director, Midtown Detroit She said profiled here. All will become the next trend is turning over for residential rental units, accord- the second time older apartment ing to Midtown Detroit. buildings, which are intact but Rents for residential proper- need upgrades or remodeling, to ties in Midtown run from the new buyers. Additionally, there gamut from $600 to $1,800 de- are 19 vacant properties that need

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major overhauls. “We also need to make sure there is a good bucket of affordable units in Midtown,” Mosey said. Overall, Midtown property redevelopers say bringing back neglected buildings is no easy task, but it is rewarding. Among the developers is Richard Hosey III, a former senior vice president for Bank of A m e r i c a who owns Detroitbased Ho s e y D e v e l o p m e n t L L C. He said his company’s redevelopment of the former Tushiyah United Hebrew School at Kirby and St. Antoine streets into Kirby Center Lofts has been “arduous but worth it.” The $6.9 million project originally was supposed to be completed early this year. But additions to complicated construction plans caused the project to get off schedule. Now Hosey is anticipating the development will be completed at the end of the year. Jack Hambene, senior vice president of St. Louis-based McCormack Baron Salazar , the company redeveloping the historic Strathmore and developing Orleans Landing on the Detroit River, said McCormack specializes in urban properties nationwide. The company has redeveloped and manages property in 23 cities and has almost 30,000 units nationwide. It wasn’t until five years ago that company co-founder and CEO Richard Baron, a Detroit native, found Detroit favorable to invest in, Hambene said. As the Strathmore is 75 percent complete, the company is seeking more redevelopment opportunities. “Historic rehab is challenging. You don’t know what you are going to get, but the Strathmore has been more positive than negative,” Hambene said. “It has common space elements that will make it a gem of a building.” 䡲

Page 37

Midtown apartments

El Moore

H.R. Finn Apartments

Forest Arms

Address: 624 Alexandrine St.

Address: 678 Selden St.

Address: 4625 Second Ave.

Architect: A.C. Varney & Co.

Architect: Harold R. Finn

Architect: Baxter and O’Dell

Year built: 1898

Year built: 1921

Year built: 1905

Status: Recently completed

Status: Under construction

Building size: 12 units plus 11 lodges

Building size: 30 units

Building size: 81 units plus 2,000 square feet of retail

Developers: Peggy and Tom Brennan, Green Garage LLC

Developer: Brandon Duckett, 678 Selden LLC

Developer: Scott Lowell

Cost: $3.7 million

Cost: $12 million

Kirby Center Lofts

Nailah Commons

The Plaza

Address: 609 E. Kirby St.

Address: 421 E. Ferry St.

Address: 3800 Woodward Ave.

Architect: Isadore M. Lewis

Architect: Alex Borat

Architect: Gerald Crane

Year built: 1922

Year built: 2015

Year built: 1960s

Status: Under construction

Status: Predevelopment

Building size: 26 units

Building size: 58 units (eight three-story brownstone buildings)

Building size: 72 units plus 3,000 square feet of retail

Developer: Julio Bateau

Developer: Roxbury Group

Cost: $6.9 million

Cost: $10.1 million

Cost: $20 million

Rainer Court

Strathmore

Woodward Willis

Address: 711 Alexandrine St.

Address: 70 W. Alexandrine St.

Address: 4219 Woodward Ave.

Architect: Paul C. Kroske

Architect: Benjamin Braver

Year built: 1922

Year built: 1924

Architect: Quinn Evans Architects

Status: Recently completed

Status: Under construction

Year built: 2015

Building size: 36 units

Building size: 128 units plus 1,800 square feet of retail

Status: Recently completed

Developer: McCormick Baron Salazar

Developer: Midtown Detroit Inc.

Cost: $3.9 million

Developer: Richard Hosey III, Hosey Development LLC

Developer: PK Housing and Management Cost: $6.4 million

Cost: $28 million

Building size: 29,000 square feet Cost: $6.8 million

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DETROIT 2.0 | ENTREPRENEURS

From experiment to expertise Finance major cooks chickpea pasta idea into business opportunity

In its second year of business, Banza is projecting a $2.2 million run rate by year’s end.

By Laura Cassar Special to Crain’s Detroit Business

Brian Rudolph will be honest — most of the chickpea experiments in his downtown Detroit kitchen were “horrible.” There’s not much Rudolph, who eats gluten-free, hasn’t tried to make with chickpeas, including bread, pizza and even pancakes. There was one thing that family and friends, including his picky roommate, kept asking for more of — the chickpea pasta. Rudolph, 25, is not a food expert. He is an Emory University finance major from New York who moved to Detroit through the Venture for America entreprenurial fellowship program to work for Quikly, another VFA startup. Rudolph believes it was his lack of expertise that led to his success with creating chickpea pasta and the creation of his company, Banza Pasta . Now in its second year of business, Banza, named for the garbanzo bean, is projecting a $2.2 million run rate by year’s end. Other people have tried to make pasta out of chickpeas, Rudolph said, “My lack of understanding of cooking let me explore this and approach it from a totally novel perspective.” “A lot is happening with chickpeas,” said Darren Tristano, executive vice president of Technomic , a Chicago-based food research and consulting firm. “It’s not just hummus anymore. Americans are becoming more familiar with it. To have chickpea pasta is a great niche to fill, one I see continuing to grow.” With “healthfulness gaining more and more traction,” according to Tristano, the gluten-free, vegan product with double the protein, nearly half the carbs and four times the fiber as regular pasta, has “strong positioning.” As a kid, Rudolph said he ate only four foods, one being chicken nuggets. But as an adult, Rudolph took to his own kitchen to find a way

ANDREW POTTER

The Banza crew works out of Eastern Market’s Shed 2 on Saturdays. Prices for an 8ounce box range from $2.99 to $3.49. to make both his love of pasta and care for nutrition work. While most people would simply shop the health food aisle at their grocery store, Rudolph went to his kitchen to create. “I just like making things.”

Getting real, fast Out of the kitchen, Rudolph’s side project “got real, real fast.” With the encouragement of Mike Tarullo, senior vice president of corporate development at Venture for America, Banza ran a crowdfunding campaign in early 2014. “Brian was worried his pasta wasn’t ready for prime time yet,” Tarullo said. “I suggested that it wouldn’t be ready until he took the leap and forced himself to make it ready, and making a promise to his funders would give him the energy and drive to turn things up.” The campaign raised nearly $18,000, making it the winner of the VFA contest and awarding Banza an additional $10,000. The crowdfunding response let Rudolph know healthy pasta was a great business opportunity and his brother, Scott, 32, joined the company as co-founder. Scott handles the financial end of the business from New York. Banza now has a team of seven, with four in Detroit and three in New York.

The Detroit team works out of a house on historic Virginia Park Street. Venture for America bought the foreclosed home for $8,500. It also houses VFA’s property management startup, Castle. The crowdfunding also allowed Rudolph to move production out of his kitchen. The pasta is now manufactured in northern Michigan in a shared facility. Rudolph says Banza helps employ about 30 people there. “We initially found our manufacturing partner through Michigan State University ’s Product Center,” Rudolph said. “They’re a fantastic

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resource for new food companies.” It took Banza 10 months of relentless research before the product was up to speed with regular cold calls to food scientists across the country with questions. Rudolph calls the experience “tough,” but there was a silver lining. “A big reason to be here in Michigan is the great manufacturing expertise in the state.” Less than a week after the crowdfunding campaign, the Rudolph brothers were contacted by CNBC to appear on the reality show “Restaurant Startup.” The company officially launched on the day the show aired, Aug. 5, 2014. The takeaway from the show, in addition to the national exposure, was a $75,000 investment from celebrity restaurant and show judge Joe Bastianich. Banza also won the VFA Seed Fund in June 2014, giving the company an additional $45,000. If Rudolph thought things were moving fast, they were about to get faster.

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A bag full of pasta One piece of advice Rudolph would give any startup is “talk to everyone, get yourself out there.” That philosophy had Rudolph entering a pitch competition in Ann Arbor. A judge there, intrigued, asked him to stay in touch. Two weeks later, that judge put them in touch with Grand Rapids-based Meijer, which has more than 200 stores. “We were not even manufacturing at scale yet,” Rudolph said. “We went to the meeting with our pasta in plastic bags because we didn’t have boxes yet.” It didn’t matter. Meijer decided to put Banza in all its stores. “They believed in what we were doing,” Rudolph said, adding that they have yet to meet with a buyer who doesn’t want to carry the product. The product was in Meijer in October 2014. They started pushing retail in January and are now in 1,700 stores across the country. “It’s been fun seeing him develop as an entrepreneur and a leader,” Tarullo said of Rudolph. “It’s not always the loudest person in the room SEE BANZA, PAGE 40

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Great Academics. Great American City. Great Values: Jesuit & Mercy. Great Futures.

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DETROIT 2.0 | ENTREPRENEURS

BANZA FROM PAGE 39

who has the most going on.” The pasta comes in penne, rotini, elbow and, top-seller, shells. Spaghetti and mac and cheese should be available in early 2016. Prices for an 8-ounce box range from $2.99 to $3.49.

Seeking mentorship The second piece of advice Rudolph would share is “seek mentorship, find people who did it before you and learn from those who did it successfully.” Rudolph found his biggest local mentor at one of the company’s first launching grounds, Eastern Market , where the company demos and sells its pasta on Saturdays in Shed 2. It was there that he made the connection with Dave Zilko, the president of Ferndale-based Garden Fresh who has provided Banza guidance, especially with “urgent problems.” “I’ve been where he is, and I know what he’s going through,” Zilko said. “If I can give some to perspective to help, I’m happy to. I’m genuinely impressed with Brian.” One of the most impressive things, Zilko said, is that Banza pasta is in “center store,” supermarket lingo for the packaged-food staples in the middle grocery aisles. which is seeing a decline, but Banza

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S is disrupting its pasta category by using a healthy base and offering something new. “This isn’t your grandma’s pasta. This is innovative.” Even more than that, Rudolph is doing it with no food background, earning Zilko’s respect. “People here want to be helpful across the board. They want to support local companies and see them succeed,” Rudolph said. “It’s a Detroit thing.” Another mentor is Nicki Briggs, former chief communications officer at Chobani, the Greek yogurt company that serves as Banza’s model. “Scott reached out to her through a cold email,” Rudolph said of Briggs. “She has great instincts. We’ve had situations where we’re in a bind and we turn to her for guidance. It makes a huge difference being able to learn from someone who’s done exactly what you want to do.” Banza’s entire board of advisers is made up of former Chobani people. “Our goal is to change pasta the way Chobani changed yogurt. Approximately 50 percent of people eat Greek yogurt now,” Rudolph said. Banza’s goal includes making more comfort foods healthy, like crackers and cereal. The company just received $1.3 million from institutional and angel investors and won $500,000 in the Accelerate Michigan competition. “We’re very grateful, we’ve had a good start, but we still have a long way to go,” Rudolph said. 䡲 The Banza team preps a pasta lunch from its Detroit home-turnedbusiness headquarters. From left are Cathryn Woodruff, Brian Rudolph, Lauren Roth and Avery Hairston.

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DETROIT 2.0 |PUBLIC SPACES

MICHAEL LEWIS

Glenn Goff, 55, enjoys his lunch break in Rivard Plaza next to the Detroit River. Goff, a native Detroiter, says there’s nothing more peaceful than sitting by the water.

Advance to park place From riverside paths to picnic spots, Detroit quickens the pace for space

By Marti Benedetti mbenedetti@crain.com

From the downtown Detroit riverfront to the city’s far east side, new and revitalized public parks this year have been growing, well, like weeds. For starters, the Detroit RiverWalk, the crown jewel of city green space, now extends 3.5 miles from the Gabriel Richard Park near the Belle Isle Bridge west to Joe Louis Arena. When completed, the RiverWalk will gain another two miles from Joe Louis Arena to the Ambassador Bridge for a total of 5.5 miles. The West Riverfront Park , which comprises a key part of the two miles west of Joe Louis, was unveiled to the public last spring after 45 years of being off limits as the De-

troit Free Press printing plant property. More improvements are slated for this park. “It’s 20 acres and a gorgeous site,” said Mark Wallace, president and CEO of the Detroit RiverFront Conser vancy. “It’s safe and clean and open. We blacktopped a wide walkway (along the Detroit River) and put in a railing. We’re excited about engaging with the community over the next year to see how it should function.” Wallace, who took the helm of the conservancy in July 2014, said it was used this summer for a few highprofile concerts, but it has the potential to become “a special space for thousands of people.” The east riverfront is complete except for a piece of privately owned land east of Chene Park ,

which the conservancy is working to acquire. With this land, those using the RiverWalk will be able to stay on the water’s edge from the Renaissance Center to Gabriel Richard Park. About $40 million in endowments have come into the conservancy for the east riverfront. Among the larger donors have been the Troy-based Kresge Foundation, the Battle Creekbased W.K. Kellogg Foundation and New York City-based Ford Foundation. Additionally, in a land swap, the city of Detroit acquired five acres from the Detroit International Bridge Co. to expand the city’s Riverside Park, west of the Ambassador Bridge. In exchange, the bridge company got SEE PARKS, PAGE 46

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a 3-acre parcel it could use to build a twin span from Detroit to Windsor. The bridge company also agreed to pay $3 million for improvements to Riverside Park. Wallace said greenways such as

MICHAEL LEWIS

Specs Howard students Shavonne Moorer and David Sikkila shoot footage along the Detroit RiverWalk.

the RiverWalk are important to connecting workers with recreational opportunities. “As an organization, we are very committed to the long-term stewardship of these public places.” The cost of construction for the conservancy’s east and west riverfront transformation is $80 million. This does not include properties such as the GM Plaza, Cobo Center or Hart Plaza along the river, Wallace said. The economic impact (public and private investment) of the RiverWalk in its first 10 years was $1 billion. Now in the second year of its next 10 years, Wallace predicts another billion will be invested. He pointed to future development such as the $61 million Orleans Landing at 1520-1574 Franklin St. and 240 Orleans St., a residential complex with 278 units and 10,500 square feet of retail/commercial space; the DNR Outdoor Adventure Center , an outdoor education and activities center; and whatever happens with the Joe Louis Arena property after the Detroit Red Wings move into a new arena near Midtown.

fresh. family.

The conservancy also oversees security and landscaping for the 1.35mile Dequindre Cut, a rails-to-trails, below-ground walkway/bikeway that is accessed via the RiverWalk. It is complete up to Gratiot Avenue, but will extend an additional half-mile to Mack Avenue, past Eastern Market, when finished by the end of this year. “This stretch will be different than the existing cut. Buildings (in Eastern Market) will drop down into the space,” Wallace said. Additionally, Eastern Market expanded its public space this year. The DTE Energy Foundation Plaza in front of Shed 5 was unveiled in May. Dan Carmody, president of the Eastern Market Corp., said the market is looking forward to the opening of the Dequindre Cut extension. New entrances to the cut via Mack Avenue and Wilkins Street will feature green space. Neighborhoods have benefited from park improvements. Thirteen of the city’s existing parks, in various states of disrepair, were fully revitalized in the spring. Other parks gained new amenities.

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Balduck Park, on the city’s far east side between East Warren Avenue and Chandler Park Drive, and Clark Park , on the southwest side along Clark Street and West Vernor Highway, received considerable upgrading. Balduck Park has been landscaped and refurbished with two new playgrounds, new ball fields and kid-friendly zip lines; Clark Park has new spacious sidewalks. In southwest Detroit, Higgins School was torn down to make way for Higgins Park. The parkland has been prepped for construction of a playscape and soccer fields next spring, said Brad Dick, Detroit director for general services. “This is a 3acre park — the size of a football field.” The economic Dick said the city is in the midst impact of procuring land (public and for two more new private) parks: one north of the Boston Ediinvestment) son neighborhood of the and south of Highland Park in the RiverWalk in Woodward its first 10 Heights neighborhood and another years was in the Woodbridge $1 billion. neighborhood. “With both locales, we have met with neighborhood leaders to see what they want in a park,” he said. Detroit has 307 parks and areas designated as green space. It also has recreation areas and smaller parks such as Paradise Valley and Hart Plaza. So what’s next? Next spring, DTE Energy will break ground on a 1.5-acre, $5 million to $10 million park on its property, at Grand River Avenue, Plaza Drive and First Street across from the G.A.R Building. “We’re still working on the final design,” said Randi Berris, manager, corporate communications-public affairs and major enterprise projects at DTE Energy. Park plans include a restaurant with indoor and outdoor seating. A large amount of open land will allow for entertainment, vendors and food trucks. The Downtown Detroit Partnership will be contracted to operate and manage events for the park like it already does for Campus Martius. As groundbreaking gets closer, DTE Energy plans to crowd-source ideas for a park name, Berris said. 䡲

Page 47

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DETROIT 2.0 | SPACES

U-M CELEBRATES

Fort Wayne gets scrutiny

DETROIT’S HISTORY, IMPACT AND FUTURE

A new study commissioned by the Michigan Economic Development Corp. on future uses for Historic Fort Wayne is com-

The University of Michigan has had a special connection to Detroit since 1817, when the “University of Michigania” was founded on 1,920 acres of city land. Today, U-M’s engagement with Detroit is stronger than ever, encompassing student internships, faculty research and community outreach. Visit detroit.umich.edu for information on programs and resources.

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plete, but the state is not yet ready to reveal results. “We want to present the study and its findings at the appropriate time,” Dave Murray, deputy press secretary for Michigan Gov. Rick Snyder, said of the study of one of Detroit’s oldest historic sites. “We are working with stakeholders and people in the community to help determine the best use for the fort.” He said now the focus is on the Gordie Howe International Bridge planned for just north of the fort. “The fort’s proximity to the bridge is one of its strengths,” Murray said. “It’s a gem that needs to be polished.” Historic Fort Wayne has a 1,000-yearold Native American burial mound, a Potawatomi Indian Village from the 1700s, a site marking the British invasion to capture Detroit and Michigan territories in 1812, and a site where William Henry Harrison, signed the Treaty of Spring Wells with eight Indian tribes in 1815. The MEDC hired high-profile New York City advisory firm HR&A Advisors Inc. to conduct the study. It is the company behind the High Line, a walkway park in Manhattan built on a former elevated train track. HR&A did not return phone calls. Murray said findings will be released next year, but would not be more specific. 䡲 – Marti Benedetti

CITY OF DETROIT

A study of uses for Historic Fort Wayne awaits release.

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DETROIT 2.0 | DOWNTOWN

Investors driving downtown Higher demand, only partly driven by Dan Gilbert, is taking government out of downtown property game

deals from 2000-2011. Wayne County bought the 643,000-square-foot It wasn’t long ago that govern- Guardian Building at 500 Griswold ments made big splashes in greater St. downtown as part of a portfolio downtown real estate, buying land- deal for $14.5 million from Detroitmark properties and turning them based Sterling Group in 2008. into executive offices. In 2011, the Michigan Strategic These days, however, you’d be Fund purchased Cadillac Place outhard-pressed to find a real estate right from New Center Development broker who reasonably expects a Inc. , an ownership entity in which governmental unit to be a serious the state had an ownership stake as contender for greater downtown part of a deal hammered out after General Motors Corp. left the 1.36 milproperty in Detroit. Case in point: Since the beginning lion-square-foot New Center area of 2013, government units have only office complex for the Renaissance purchased two properties down- Center. The last of 5,200 GM employtown. Those buildings, in Capitol ees moved into the RenCen from the Park and ParAlbert Kahn-deadise Valley, total signed Cadillac just shy of 8,000 Place on West EXTRAS square feet. Grand Boulevard Compare that For a graphical breakdown of who in 2001. with 2000 to But times owns downtown, see Page 50 2010, when govhave changed. For an interactive map and a ernmental units Governments, database of properties, see purchased 2.32 particularly the crainsdetroit.com/detroit2.0 million square county and the feet of space city of Detroit, ranging from large office buildings are much more wary of making sigto land, from parking decks to nificant real estate deals. Simply put: smaller properties inside the cen- Detroit, which emerged from its histral business district, according to toric Chapter 9 municipal bankruptan analysis of property sales listed cy a year ago, and Wayne County, by CoStar Group Inc. , a Washington, which is operating under a consent D.C.-based real estate information agreement, don’t have the cash to service. invest in downtown property. In All told, a Crain’s review of 141 fact, both governments have been downtown properties shows that unloading or are looking to unload governmental/public ownership is some of their key properties in costdown to seven properties, repre- savings efforts. senting just 5 percent (rounded Among them: The Guardian numbers) of those surveyed. But Building itself, which the county those properties account for 15 per- bought in 2008 along with the First cent (2.6 million square feet) of the Street Parking Garage and the buildsquare footage (about 17 million ing at 511 Woodward Ave., and the square feet). Old Wayne County Building; the By comparison, Dan Gilbert and county had owned the land on his related companies own 40 per- which the 226,000-square-foot cent of the surveyed properties, to- building, built between 1897 and taling 7 million square feet, and 1902, sits. other private owners own 52 percent The building had been Wayne of the properties, totaling 7.3 million County’s executive office home until square feet. Nonprofit and religious it purchased the Guardian Building organizations own 4 percent of the following a disagreement with the properties, totaling 1 percent of the previous owner, Old Wayne County Building LP, over rental rates. The Old total 17 million square feet. There were two giant government Wayne County Building sold for By Kirk Pinho kpinho@crain.com

$13.4 million to 600 Randolph SN LLC, a private New York-based investor. The county also sold the Philip J. Neudeck office building at 415 Clifford St. last year to businessman Joe Barbat, who plans a multifamily conversion, for $2.3 million. Detroit also sold its former fire department headquarters building at 250 W. Larned St. to a Chicagobased hotel company that plans a hotel conversion with 80 rooms in a $28 million redevelopment of the 63,000-square-foot building. A number of properties, including the Joe Louis Arena and some riverfront land, among others, also went to bond insurers Syncora Guarantee Inc. and Fi nancial Guaranty Insurance Co. during Detroit’s bankruptcy. So just as the city and county have been eager sellers of unused or underutilized properties in efforts to bring in revenue and cut operating expenses, there too have been an increasing number of eager buyers downtown looking to capitalize on higher property values and demand for things like multifamily housing and quality office space. A review of CoStar data shows that between 2005 and 2010, there were just 29 total downtown property sales. That has increased steadily every year since as market conditions and demand improve, growing from 15 sales in 2011 to 41 last year. As of Nov. 3, there had been 25 total this year, according to CoStar. Yes, an undeniable factor in the increase is Dan Gilbert’s downtown buying spree. But smaller yet formidable private investors and property owners also are stepping up downtown. “The key factor is that we don’t need (government deals) the way we used to need them,” said AJ Weiner, managing director in the Royal Oak office of Jones Lang LaSalle . “When the market was extremely soft and there was a limited amount of real estate activity, you needed the state and city to step up” with things like tax incentives. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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DETROIT 2.0 | SHOPPING

Downtown, Midtown retail roll, but not the whole story Other pockets of shopping start to perk up in city

By Sherri Welch swelch@crain.com

Detroit’s Woodward Avenue and the Midtown neighborhoods are garnering headlines as they attract national and destination retailers back into the city. And certainly, much of the region’s retail development has been concentrated there. But they’re not the whole story. Other pockets of retail are developing quietly in a handful of Detroit neighborhoods. And the retailers in those neighborhoods are among the city’s bestkept secrets.

Detroit Fiber Works “popped up” in what was initially a temporary location on the historic Avenue of Fashion on Livernois in northwest Detroit in September 2013 after winning the Detroit Economic Growth Corp.’s Revolve Detroit contest. It signed a long-term lease for the location in January 2014 to give a permanent home to its gallery-boutique, which sells one-of-a-kind works by Detroit artists, handmade clothing and home décor items. Co-owner Mandisa Smith said she grew up in the neighborhood and has lived there the past 29 years. It’s surrounded by some of the most affluent and educated people in the

city, she said, people who want to be able to shop in their neighborhood. “We have thought about maybe opening in one of the busier areas, but one of the advantages of us opening here was the cost,” she said. “In order for us to open in Midtown or downtown, we’d have to spend a lot of money. For us that’s not possible right now. This feels like the right place to be.” Detroit Fiber Works opened on the night of the Detroit Design Festival two years ago, the best possible night to open given the large numbers of people on Livernois that SEE RETAIL, PAGE 53

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night, said Smith. “There were so many people in here that you could barely get in the door,” she said. It was a great way to open, “but that was a one-time thing.” Like other startup neighborhood retailers, Detroit Fiber Works doesn’t have a marketing budget to help get the word out, so it’s a challenge to get people into the neighborhood and in the door, Smith said. “Everything we’re doing is word of mouth (through) social media ... and holding as many events as we can to try to keep things interesting to people,” said Smith, who founded the business with co-owner Najma Wilson. Smith said they have seen an uptick in foot traffic on her section of Livernois with the opening of Kuzzo’s Chicken and Waffles earlier this year, but customers beeline for the restaurant without looking around much. Local businesses are excited that Bucharest Grill is opening on the avenue in the spring, she said, since

the shawarma specialist is expected to attract even more people. “We’re confident it’s just a matter of time before people know that we’re here,” Smith said. Combining restaurants with retail has succeeded in Midtown, said Sue Mosey, executive director of Midtown Detroit Inc.

“People come down for more of an experience” that combines shopping and eating, she said. Detroit has a strong foundation to build on with a lot of great businesses that have been here a very long time, said Michael Forsyth, program manager at the DEGC, including Henry the Hatter on Broadway Street, which opened in 1893. “When you buy a hat, it’s like buying a piece of history,” he said. And there are others like Hot Sams, a men’s fine-clothing shop on Monroe Street that’s been in business since 1921 and boasts it “never left, never will.” “That’s the special spirit of some of the independent, downtown businesses (that) have seen Detroit change through good and bad and have stayed the course,” Forsyth said. “They are the folks who make it fertile

for other business to start here.” Here is a look at some of Detroit retail’s hot spots and hidden gems:

Woodward Avenue M-1 Rail construction on Woodward is helping build an infrastructure that retail can build on, Forsyth said. So too are the efforts of Bedrock Real Estate Services and other building owners along the Woodward corridor, he said. They are making building improvements and creating generic “white-box spaces” to get them move-in ready for when M-1 construction wraps up. But already, Woodward is attracting national retailers. Madison Heights-based recreation apparel and gear retailer Moosejaw was the first national retailer to open a permanent store in downtown Detroit in 2013. This October, it opened an additional popup location less than a block north on Woodward to offer holiday shoppers more styles of The North Face and Patagonia clothing and gear. Offering a different sort of apparel SEE RETAIL, PAGE 54

LARRY PEPLIN

Mandisa Smith grew up in the Avenue of Fashion neighborhood of Detroit and now co-owns a business, Detroit Fiber Works, there.

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is fashion designer and metro Detroit native John Varvatos, who opened a store on Woodward at John R Street in March. Waxed jeans, linen T-shirts and leather jackets line the racks. And the upper balcony of the store features a curated collection of records, refurbished receivers, turntables and speakers for purchase. Add to that the community store Beaverton, Ore.-based Nike Inc. is expected to open nearby on Woodward, and the search by Baltimore-based Under Ar mour Inc . for a Detroit location, and there’s no question retail is coming back to the city’s core. Building owners of properties in the “People come city’s nearby Capitol down for Park neighborhood by Grismore of an bounded wold, State and Shelexperience by streets, are also improve(that doing ments, Forsyth said. combines And already they are newcomshopping and attracting ers like Detroiteating).” based bike manufacturer Detroit Bikes Sue Mosey, executive LLC, which opened in director, Midtown May in The Albert Detroit Inc. building on Griswold.

Michigan Avenue There’s new retail cropping up in the city’s Corktown neighborhood as well. Across from Slows BarBQ are Detroit Arti Factry,which offers home accents from Detroit and beyond, and Metropolis Cycles, a bicycle shop that opened last spring. Batch Brewing Co., a microbrewery and gastropub on Porter Street at Trumbull Avenue, opened in February. Also in the neighborhood are DittoDitto bookstore and Hello Records. And there’s Eldorado General Store, which opened last year on Michigan Avenue at Cochrane Street, offering one-ofa-kind trinkets owner and Livonia native Erin Gavle has collected from her travels, plus vintage clothing, handcrafted accessories, and locally made goods. Gavle, 33, a former associate creative director in the New York office of advertising agency McGarryBowen , said business has been good. Customers are split between the locals and others coming

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from the far reaches of the country and other countries like Australia and Europe to see the old Tiger Stadium site, the Michigan Central Station and other attractions. Those “extreme tourists,” as Gavle calls them, are often referred by other small retailers in other Detroit neighborhoods, she said. “The vibe and spirit within the city is all about helping other businesses succeed as well,” she said. And that “is something you wouldn’t find in other cities.”

Midtown One of the fastest-growing areas for retail in the city is Midtown. In the historic Willys Overland Building on Canfield Street you’ll find Shinola/Detroit LLC, offering its namesake watches and bicycles assembled in Detroit, leather goods, and other items from U.S. manufacturers. In the same building is its sister store, Willys Detroit, which offers products from national brands Filson, Steven Alan, Clare V and Mollusk and also includes Michigan and Detroit vendors on a monthly, rotating basis. Jolly Pumpkin Pizzeria & Brewery

opened in Willys in March, with 30 varieties of Jolly Pumpkin and North Peak Brewing Co. beers brewed by Dexter-based Northern United Brewing Co. Also in the complex is RUNdetroit, selling athletic apparel for the past two years. Detroit native rocker Jack White is planning a return to his Detroit roots with a new Third Man Records store expected to open on Black Friday. Just down Canfield is the Traffic Jam , a Detroit fixture for food and drinks, and across the street is City Bird and Nest , shops featuring Detroit-themed housewares and gifts crafted by local artisans, and Motor City Brewing Works Inc.

“Everything seems to work best when you combine food and beverage with the retail,” Mosey said. On Cass Avenue, Vancouver, British Columbia-based men’s and women’s boutique Kit and Ace opened this summer, joining pet supply store Cass Corridog, Source Booksellers (a longtime Midtown bookstore), housewares and accessories store Hugh, and lifestyle store Nora. A block south is the newer specialty gift and clothing shop Art Loft.

And ZBallerini popped up for the holidays in the former Curl Up & Dye location on Cass, now a new, yearround popup retail space. Owner Mike Ballerini, a graduate of the College for Creative Studies in Detroit, makes bags from high-end materials such as leather and wool. At Woodward and Kirby, across from the Detroit Institute of Arts in the Park Shelton building, shoppers will find the Peacock Room, featuring special-occasion apparel for women; Frida, a boutique offering everyday clothing for women; a bra shop aptly named Busted; and Goods, a Detroit-centric T-shirt and gift store; and 14 East Cafe, a coffee and arts boutique. Eugene, Ore.-based Will Leather Goods, a purveyor of high-end, handcrafted leather bags and accessories, opened in early November on nearby Second Street. Its founder and owner, William Adler, grew up in Detroit and was a speaker at the 2015 Detroit Homecoming. “That’s another new anchor retailer for the neighborhood; it will be a destination shopping location for sure, just like Shinola ... and Carhartt,” which opened on Cass near I-94 to get more visibility, Mosey said. There are going to be other national retailers that want to locate

around those three national retailers, as well, she said.

Eastern Market Eastern Market, one of the country’s oldest farmer markets, has plenty to offer beyond food. In addition to the Saturday and Tuesday produce and food markets that bring in farmers and other vendors from around the region, Eastern Market added a Sunday Street Shopping market last year, with vendors selling home goods, art, jewelry and other Michigan-made products. In addition to market standbys like specialty food stores DeVries & Co. (formerly R. Hirt), Rocky Peanut and Germack Pistachio Co., newcomers to the market include Detroitbased clothing stores Detroit vs. Everybody, which opened this summer, and Orleans & Winder, a women’s clothing store on Russell Street. For the wine and whiskey lovers on your shopping list, there’s Cost Plus Eastern Market Wine and Detroit City Distillery, which creates smallbatch whiskey, gin and vodka. La Rondinella, an Italian restaurant, is preparing to open next to Supino Pizzeria at the northwest corner of Russell Street and the I-75 service drive. SEE RETAIL, PAGE 56

LASZLO REGOS PHOTOGRAPHY INC.

The Detroit outpost of fashion designer John Varvatos’ empire opened in March on Woodward Avenue.

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West Village

FROM PAGE 55

Down Russell in a renovated firehouse is The Detroit Mercantile Co., an “urban pioneer” outfitter, and The Wasserman Projects art gallery, opened by local philanthropist and art dealer Gary Wasserman in September. Other new retailers include Be yond Juicery + Eatery featuring smoothies, cold-pressed juice, juice cleanses and healthy foods; Motor less City Bicycle Co.; and boutique pet store 3Dogs1Cat4Detroit. A block west on Division Street is Detroit Hustles Harder, offering Tshirts, jackets, hats and other clothing. And on Gratiot Avenue a little further north is Gardello Furniture , a third-generation business opened in 1939, which Jim Bieri, president of Detroit-based Stokas-Bieri Real Es tate, calls “a hidden secret.”

MICHAEL LEWIS

Will Leather Goods, owned by Detroit native William Adler, opened at

4120 Second Ave. in November.

East on Jefferson Avenue, just north of Belle Isle is Detroit’s West Village neighborhood. It boasts specialty grocery store Parker Street Market (See story, Page 3) and within it, raw juice maker Drought Detroit. There’s Paramita Sound , a popup vinyl record store and independent record label that plans to work exclusively with Detroit and Michigan artists, Tarot & Tea and Sister Pie ’s flagship bakery. “There’s a lot of redevelopment activity on Kercheval between Parker Street and Van Dyke,” Forsyth said. “I would be on the lookout for a lot of new activity, both food and retail in that area.”

Avenue of Fashion Detroit’s Avenue of Fashion, a section of Livernois Avenue bounded by Seven and Eight Mile roads that once was a destination for shoppers looking for high fashion and other goods, is growing again with new and renovated shops, galleries and restaurants amid improved street lighting and median landscaping. There are institutions like Baker’s Keyboard Lounge, which claims to be the oldest jazz club in the U.S., and retailers that have been in the neighborhood for a while, like Flagship Boutique, featuring clothing brands “Joe’s Coney Island” and “District 81,” and Simplycasual, a fixture since 1997 that sells fashions for people ages 25 to 45. “Those are destinations in and of themselves,” Forsyth said. The 1917 American Bistro , which opened several years ago, is still a draw, as is the newer Kuzzo’s Chicken and Waffles and Good Cakes and Bakes , which got Oprah Winfrey’s seal of approval. There’s Art in Motion , a ceramic studio and gallery that sells pottery and ceramics, hosts classes and makes workshop space on its upper floor available to artists in residency and also displays their pieces. Also on the strip: Jo’s Gallery and further south on Livernois, Eric’s I’ve Been Framed. And of course, there’s Detroit Fiber Works. Smith and Wilson this fall launched a crowdfunding campaign with the MEDC to raise $10,000 to

qualify for a state match and a $20,000 arts challenge grant from the Miamibased John S. and James L. Knight Foundation. The proceeds will fund free fiber art workshops to children and adults and a public art installation in the median of Livernois. Smith said when she thinks back to the Avenue of Fashion the way it was before the 1967 riot, even though there were lots of boutiques and dress stores, there were also jewelers, men’s stores, a Grinnell piano store, a photography store, a children’s shoe store and other retailers. “It was never just fashion,” Smith said. “And I think that as Livernois is evolving, one of the wonderful things is ... it will be a place where everybody can shop and is welcome, where we’ve got funky little pockets of things that are unique.”

Southwest Detroit Southwest Detroit also boasts “really cool” small retail shops and bakeries, Forsyth said. Xochi’s Gift Shop on Bagley Avenue has cowboy boots and hats, quinceanara dresses and imported goods, and Hectors Mens Wear, a fixture on Vernor, offers casual, cowboy wear with a Latino vibe. You can select Mexican baked goods to take home at La Gloria Bakery or Sheila’s Bakery, pick up tamales and salsas in the district or eat at a wide range of Mexican restaurants, including the newer El Asador Steakhouse. “What you’re seeing is that opportunity is spilling over into the neighborhoods outside of downtown and Midtown,” Forsyth said. There’s tremendous residential density and buying power in the neighborhoods that is underserved, leading more and more entrepreneurs to launch new businesses in Detroit neighborhoods every day, he said. “It’s a very good sign for the city that you’re seeing this kind of activity,” Mosey said. Some of the major commercial corridors that had been vacated are starting to come back, she said. “There’s wisely been a lot of resources put behind stabilizing existing businesses, helping them grow and getting money to startups,” Mosey said. 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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THE CBRE TEAM is reflecting a new detroit. BUILDERS. PROJECT MANAGERS. COMMITTED DETROITERS. THIS CBRE TEAM IS CONSTRUCTING THE NEW DETROIT. As project managers for the GMRENCEN, they’re responsible for many of the build-outs to the 5.5 million square foot complex. Their most recent endeavor? Granite City – known for its great food, great prices, and great beer – is opening its largest restaurant ever. And the CBRE team is making it happen. With over 17,000 square feet of dining space, the restaurant will seat more than 625 guests, and employ an impressive 250 Michiganders. Now that’s being crafty all around! GMRENCEN is celebrating the spirit and vision of the SHRSOH RI 'HWURLW /HDUQ PRUH DW UHŴHFWLQJGHWURLW FRP #REFLECTINGDETROIT

GMRENCEN, GRANITE CITY

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Coming back to the Comeback City Inviting ‘expats’ to Detroit Homecoming pays off in tangible ways

By Mary Kramer Publisher, Crain’s Detroit Business and co-director, The Detroit Homecoming

Expat luminaries Among the prominent local expats who attended Detroit Homecoming in 2015:

䡲 Tom Skerrit, actor and Wayne State University graduate. 䡲 Longtime NBA player and Detroit Country Day graduate Shane Battier. 䡲 CNN and ESPN journalist and commentator LZ Granderson. 䡲 Entrepreneurs Eric Lefkofsky and Brad Keywell. 䡲 ABC-TV newsman Bob Woodruff

Detroit is America’s Comeback City. That’s actually a slogan for the Detroit Metro Convention & Visitors Bureau. It pops up in a welcome message on the spiffy Times Square-esque electronic sign over the main entry to Cobo Center. It’s hard to comprehend how short a time it has been since Detroit emerged from bankruptcy. And despite the booming core center — downtown and Midtown — there’s much to be done in Detroit schools and neighborhoods. We showed the good, the bad and the downright ugly to 175 metro Detroit “expats” who attended this year’s Detroit Homecoming Sept. 30-Oct. 2. It was August 2013 when I first met Jim Hayes , a former publisher of Fortune magazine who had “flunked” retirement a couple of times. Jim, who worked for Sports Illustrated in Detroit from 196777, had moved back a few months earlier and was looking for something meaningful to do as a “citizen volunteer.” He brought an idea to us that became The Detroit Homecoming, a year-round initiative to reengage successful “expats” who were born in metro Detroit, went to school here or worked here. Detroit needs brand ambassadors. It needs investors. It needs charitable givers. Why not re-engage people who have an emotional connection to our city, who consider Detroit “home” and try to cultivate all three? As one attendee put it in our post-event survey: “I participate in many activities and events each year created to develop enthusiasm for a cause, a charity or a public policy. I can’t think of any that

have been more rewarding or have had a bigger impact on me than the two Homecomings.” With the help of area foundations and corporations, we have led two successful “homecomings” — in 2014 and 2015. Next year’s is set for Sept. 14-16. We’re tracking tangible outcomes. Some have been reported on the pages of Crain’s and are also included in this supplement. Some highlights: 䡲 Will Adler, who attended in 2014 and 2015, just opened a new leather goods store in Midtown. He told us it wouldn’t have happened without his visit in 2014. 䡲 John Rhea, who led public housing in New York City under Mayor Michael Bloomberg, is leading one housing project in Brush Park and is a partner in the revitalization of the Fisher and Albert Kahn buildings on Grand Boulevard. 䡲 Tom Tierney, who graduated

from Wayne State University and returned to Detroit for the first time in more than 30 years in 2014, gave $2 million to his alma mater, which named a new alumni headquarters for his family. 䡲 We’re hoping to hear good news soon about a capital raise for a $200 million real estate development fund led by two Detroit expats. The fund would develop multifamily housing in Detroit. ■ You don’t have to be a billionaire to make a difference. Terry Axelrod of Seattle, an expat who owns the nonprofit consulting company Benevon, simply moved the training sessions she generally holds in Chicago to Detroit, adding hotel room nights to the local mix. It’s too soon to tell what will come from this year’s event. But we can feel the momentum and the connections that were made. This year, expats were able to sign up in advance for one-on-one consultations with state and local economic developers. At least six projects are on a priority list for the state’s team. The older you get, the more successful you are, you tend to want to reach back to “where it all began.” Detroit Homecoming helps to make connections for those who want to reach back, remember and act. 䡲

AARON ECKELS

Wendy Hilliard, aCass Tech andWayne Stategraduate and USA Gymnastics Hall of Fame member, talks at Detroit Homecoming about adding a location for her Wendy Hilliard Gymnastics Foundation in Detroit. At left is Margaret Kennedy, the daughter of expats now working with city leaders on a home loan program; at right is Ebbie Parsons III, who is bringing employees from his Yardstick Learning consulting firm to the city.

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Thank You! Crainâ&#x20AC;&#x2122;s Detroit Business was proud to convene The Detroit Homecoming, held Sept. 30 â&#x20AC;&#x201D; Oct. 2 where 175 expats returned to Detroit to reconnect and reinvest. We are grateful to the companies and organizations that contributed to the success of the program.

& The Cotton Family

Read all about the 2015 Homecoming at CrainsDetroit.com/homecoming

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Detroit, in expats’ own words ANDREW KRAFSUR

HEATHER LORD

MICHELE VARIAN

ANDREW MOERS

SHAWN WARD

NICK SHAH

Andrew Krafsur is a Southfield-Lathrup High School graduate and the CEO of Spira Brands Inc., a footwear company in El Paso, Texas, that has raised more than $14 million in funding. Krasfur shared this about his time at Detroit Homecoming and seeing former Lions quarterback Greg Landry:

Heather Lord is a returning attendee of the Detroit Homecoming. She graduated from Ann Arbor Greenhills School and is a consultant, practitioner, blogger, philanthropist and speaker based in New York City. She has been in the philanthropic and corporate sectors for 20 years, including a

Michele Varian — an alumna of Cass Technical High School in Detroit — worked in fashion for 10 years before starting her New York-based eponymous company, which designs and manufactures home accessories. While in New York, she hosted events to help promote American Design, one of the most successful having been Detroit Built, a pop-up shop featuring handcrafted items made in Detroit, in 2014.

“Detroit’s foundation is rooted in innovation, and that’s evident by the great people it produces. I leave this year’s event extremely confident that Detroit will flourish again, and soon. I can feel the momentum continuing to build,” said Andrew Moers, president of Ask Partner Network at Ask.com, a division of IAC.

“The Homecoming went above and beyond all of my expectations. I was blown away by the enthusiasm, and the subsequent excitement of fellow expats to talk and engage afterwards to find out synergies to work together,” said Shawn Ward, president of

Ampush is a San Francisco-based mobile marketing software platform focusing on in-feed advertising on Facebook, Twitter, Instagram and Pinterest. Nick Shah serves as the company’s COO and is a graduate of Andover High School in Bloomfield Hills.

Moers is a graduate of Bloomfield Hills’ Andover High School. He started his career at Ask.com in 2000, leaving a position as a senior associate at the New York law firm Kirkland & Ellis, where he focused on private equity and leverage acquisition transactions.

Ward helps companies define and execute their business plans with an emphasis on brand definition, target consumer definition and new market. “I am very excited for next year and bringing one of my businesses back to my hometown,” he said.

Rockefeller Foundation

new media startup. “When I was 8 years old, I was at a day camp and we attended the Lions training camp. I was very small and could not get close enough to any of the players to get an autograph. Greg Landry saw me, came over, picked me and signed my football. At the opening dinner event, I was milling through the crowd and ran right into him. My knees buckled. Every emotion came back to me as if I was 8 years old. I had not thought about that childhood experience in 30 years. It made me realize that (this) place really matters.”

“My family has been in Detroit for the last 200 years, and though I live in NYC now, my heart and many of my friends are still in “the D.” Detroit Homecoming gave me an incredible opportunity to get to know Detroit in new ways. It inspired me to up my game about Detroit and expand and launch a new fellowship program on social enterprise and place-based philanthropy that involves emerging community leaders from Michigan and all over the U.S. in learning from Detroit.”

“For years, when asked about Detroit, I’ve replied that it’s not just where you grow up, it’s a heritage,” said Varian. “Becoming connected with so many other expats who feel the same way will help create conscientious and thoughtful contributions to Detroit.”

Ward & Fifth Consulting and graduate of

Cass Technical High School in Detroit.

“Homecoming opened my eyes to all the amazing passion, activity and results that are rebuilding the city of Detroit. I came away thinking there is no better canvas for a young entrepreneur to make impact than what we have going in Detroit.” Shah said.

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DETROIT 2.0 | HOMECOMING

Wayne State University President M. Roy Wilson welcomes Detroit Homecoming attendees and introduces a panel on the future of education in Detroit.

A Homecoming to remember Photos by Aaron Eckels

Jena Irene of Farmington Hills, an

Michigan Gov. Rick Snyder, with Detroit Mayor Mike Duggan in the background.

Homecoming attendees were treated to a food truck roundup on a sunny, if brisk, early fall day.

â&#x20AC;&#x153;American Idolâ&#x20AC;? runner-up, serenades attendees to close out the event.

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Clockwise from top left: ■ Asia Newson, 12, whose tagline is “Super Business Girl,” makes a pitch for her candle company to expat, serial entrepreneur and former Digg CEO Jay Adelson. ■ La June Montgomery Tabron is a Detroit native and CEO of the W.K. Kellogg Foundation.

■ Author David Maraniss talks about his book Once in a Great City: A Detroit Story. ■ Quicken Loans Chairman Dan Gilbert (left) talks entrepreneurial shop with Under Armour Inc. CEO Kevin Plank, whose company is said to be scouting locations in Detroit for a new store.

Detroit Homecoming made the expats the stars, putting them on the stage of the Detroit Opera House, while Detroit Circus members performed aerial feats.

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DETROIT 2.0 | MEMORIES AND CATALYSTS

SCOTT BOEHM, ASSOCIATED PRESS

Super Bowl XL at Ford Field meant a lot to the victorious Pittsburgh Steelers, but may have meant more to Detroit.

Change agents 2006 Super Bowl, Dave Bing, the Ford family, Ilitches and Davidsons kept city alive

By Ann Marie Petach Special to Crain’s Detroit Business Ann Marie Petach is former treasurer of Ford Motor Co. , former CFO of BlackRock, and current board member of BlackRock Institutional Trust Co. and Jones Lang LaSalle.

Super Bowl XL — the Pittsburgh Steelers against the Seattle Seahawks — is one of the most powerful memories of my life. I was working for the Ford Motor Co. and was invited to attend with a guest. It was 2006, the year my dad turned 80. My dad, a first-generation son of Slovak immigrants, grew up poor in Pittsburgh during the Great Depression, fought in World War II and the Korean War, went to school through the GI bill and went on to become a public school teacher for more than 40 years. While he moved to New Jersey and eventually Michigan to be with me, his heart and sport allegiances remained in Pittsburgh. He was a true fanatic and watched or listened to every game the Steelers and Pirates played. I was thrilled to give an amazing 80th birthday present by inviting my father to join me to watch the Steelers play the Seahawks on Feb. 5, 2006, in downtown Detroit. That morning, we got into my Ford and drove from Ann Arbor to Dearborn, where we would take a bus to the stadium. My father carried his terrible towel, and the freeway was littered with other Pittsburgh fans who migrated en masse to watch the game.

They came with and without tickets. Some would watch from inside the stadium and some from bars nearby. They were coming to experience a Steelers Super Bowl live in Detroit. My dad rolled down the window and waved his towel at each like-minded fan we passed. We got to Ford headquarters and hopped on the bus to be dropped near the stadium and avoid parking hassles. The bus dropped us near Ford Field and everyone poured off the bus to make their way. We, however, could not keep up. At 80, my dad was spry but much slower than the crowd. I did not know my way, and the owner of one of our materials suppliers, a very kind gentleman, stayed with us to help my dad and make sure we found our seats. Once seated, my dad tuned out all of the revelry and mayhem and focused intently on every second of the game like a true fanatic. The experience went from good to great when the Steelers assumed a lead and ultimately beat the Seahawks, winning the 2006 title. We went home on cloud nine, celebrating an amazing day and victory. We told my husband and mother all the details: from the sea of Pittsburgh fans, to Mick Jagger, to

the kindly gentleman who helped us from the bus to our seats. My husband asked, “Who helped you?” I said he was one of our suppliers whom I had previously visited. “What was his name?” he asked. I said it was Dave Bing of the Bing Group. He looked at me with that husbandly “you are an idiot” look and asked, “Do you know who Dave Bing is?” I said confidently again that he was the owner of the Bing Group and a supplier of ours. He said Dave Bing is an NBA great, a famous athlete and, what neither of us knew at the time, the future mayor of Detroit. I thank Dave Bing for his kindness and strength. Those same attributes that led him to help an old man on a long walk to find his seat guided him to build his business in Detroit, lead the city out of an era of corruption and to plant the seeds of recovery. He remains deeply involved and committed to the city and is running a mentoring service for young men to help them through a fragile period of their lives. I also thank the Ford family, who committed to the construction of the new Ford Field, a large risk taken to step up the transformation of Detroit while many still lacked hope. This $500 million project began as a concept in 1996 with construction completed in 2002, and was used to draw national attention and lure the Super Bowl to Detroit in 2006. Many of us have memories created by the hometown Super Bowl. People painted, preened and prepared for the nation to come to Detroit, but those were early days, and much additional hard work did and will follow. Good people do great things and take risks to help others. Good men are not just good when recognized or when in the public eye. They are good when it is anonymous and unpopular. Again, I thank Dave Bing, the Ford family, the Ilitch family and for many years the Davidson family and the many amazing athletes whose commitment to Detroit and sports in Detroit inspired so many young people and kept the city alive during the darkest days. It is fun to think that one of the happiest memories of my life was also an important catalyst moment in this city’s transformation.䡲

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