Downtrodden Detroit to Get $145M Arts Center
- May 12, 2009
While office builders and the like struggle to obtain money for projects in the midst of the credit crunch, the College of Creative Studies in Detroit has managed to secure $145 million for the transformation of the long-vacant Argonaut Building (pictured) into a facility to house its second campus, as well as an arts-centric middle school and high school. The federal government’s nine-year-old New Markets Tax Credit Program played a major role in financing the redevelopment of the former General Motors Corp. property, which locals expect will help revitalize the city that began feeling the impact of the car industry’s decline years ago. It’s an enviable lineup that is financially backing the Argonaut Building renaissance. U.S. Bank Corp. is on board as the New Markets and Historic Tax Credit investor, and Chase is taking on the role of primary lender. Additionally, five Community Development Entities participated in the financing process that yielded approximately $67 million in NMTCs, federal and state HTCs and Brownfield Credits. The group includes National New Markets Fund, a partnership between Los Angeles-based Strategic Development Solutions and Boston-based Economic Innovation International Inc., Enterprise Community Investments, NCB Capital Impact, New Markets Support Company & Consortium America and U.S. Bancorp Community Development Corporation. Remaining funds were culled from private contributions. Situated in Detroit’s New Center district, where the poverty rate is 26.6 percent, the Argonaut Building is an Art Deco structure that was originally constructed in 1927 as GM’s first research facility. The auto manufacturer departed the Albert Kahn-designed building in 1999, leaving it vacant for years before donating it to CCS for redevelopment. Larson Realty Group, Jones Lang LaSalle and Preservation Development are overseeing redevelopment activity. And in an effort to stay as true as possible to the original architecture, CCS has Albert Kahn Associates spearheading the design aspect of the renovations. The historic façade will remain, camouflaging what will be a green property designed to qualify for LEED Certification. When all is said and done, CCS will offer studios, classrooms, administrative offices and student housing within 400,000 square feet, leaving ample room for the Henry Ford Academy: School of Creative Studies. The Argonaut project is on target to reach completion in September of this year. It will be a standout, as there are very few commercial developments coming online in Detroit these days. Recent new arrivals on the scene, aren’t so new, and include a few hotels, not that the hospitality market is bustling in any sense of the word. The 400-room hotel at Greektown Casino reached completion in February–and is now operating under bankruptcy protection. Last December, the 90-year-old former Hotel Fort Shelby emerged from a years-long $90 million makeover as a Doubletree Guest Suites hotel. In October, the historic Book Cadillac Detroit reopened its doors after 24 years as the Westin Book Cadillac Detroit following a $200 million renovation. Most commercial real estate sectors in Detroit, including the office market, are struggling and development plans are practically nonexistent. According to a report by Marcus & Millichap Real Estate Investment Services, only 27,000 square feet of new office space is scheduled to deliver this year, which is fitting since the vacancy rate is expected to reach 27.4 percent.