Projects advance with ‘gap financing’
Funding fills holes that can hold up developments
Detroit development officials announced Wednesday that five housing and commercial projects in the city are moving forward, thanks to $14.5 million in recently awarded state grant funds.
The funding was awarded last fall by the Michigan Economic Development Corp. and will provide useful “gap financing” for the projects’ developers, helping to fill the various budget holes that often pop up from rising construction and financing costs and lead to delays.
“These funds will help to catalyze over $250 million in investment in the city of Detroit,” said Kenyetta Hairston-Bridges, chief operating officer and executive vice president of the Detroit Economic Growth Corp., which is distributing the state funds.
The funding is ultimately from the MEDC’s Revitalization and Placemaking 2.0 program, which offers grants of up to $5 million per project for real estate development and rehabilitation.
“It is amazing what $15 million can get you,” Detroit Mayor Mike Duggan said at the announcement event, which was held inside the former Jefferson Intermediate School, 950 Selden, which is being redeveloped into commercial space.
The five projects:
Broadway Lofts
A $4.275 million grant will go to redevelopment of three empty storefronts on Broadway Street in downtown — 1322, 1326 and 1332 Broadway — into a new nine-story building with 80 residential units and ground-floor retail.
The project, headed by developer Roger Basmajian, will incorporate the facades of two of the old buildings while razing a third (1332 Broadway) that is too damaged to save. The project will replace the interiors of all three buildings with new construction, creat
ing a new nine-story building. A full 20% of the units will be set aside as below-market rents.
Construction is expected to begin in late March or early April.
Fisher 21 Lofts
The industrial-to-residential conversion of the long-abandoned Fisher Body Plant No. 21 will receive a $4.75 million grant. The project, led by developers Greg Jackson and Richard Hosey, was announced in 2021 and calls for converting the 600,000-square-foot building into 433 apartments, plus retail space and coworking space. At least 20% of the units would be below-market.
Hosey said Wednesday that they hope to begin the abatement and interior demolition phase of the project in the coming days or weeks.
“The demo and abatement we’re actually doing out of our pockets,” he said. “The total financing package is all but together. There are some final term sheets, but we are 99% there.”
The Arthur Murray Building
A $14.9 million project to convert the first franchise location of the Arthur Murray Dance Studio, 16621-16653 E. Warren Ave., will receive $2.13 million. Plans call for 32 apartments plus ground-floor retail space.
A $44.4 million project to redevelop the former Jefferson School, 938 Selden St. in Midtown, into multi-tenant office and coworking space received a $1.425 million grant. The rehab was started several years ago by an outof-state development firm known as Q Factor, but missed its once-anticipated summer 2022 opening as the “INDUSTRY Detroit” building.
Officials said a portion of the rehabbed school building is expected to be ready for its first tenants by year’s end. Future occupants would include the nonprofit foundation Invest Detroit and the VVK public relations firm. Overall, 20% of the building would be leased at below-market rents to emerging Detroiterowned businesses.
While Q Factor is still involved in the development, Invest Detroit has since taken the lead on the construction.
The Deco
The redevelopment of a long-vacant twostory commercial building at 16703 E. Warren will receive a $2 million grant. The $4 million project is led by developers Brandon Hodges and Damon Dickerson and will result in six new apartments and a ground-floor restaurant space — to be occupied by La Jalisciense Taqueria.
Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on X @jcreindl. Read more on business and sign up for our business newsletter.