GM Movin' on Up with Luxury Condos on Detroit Riverfront

[Flybrian]

GM will build luxury condos on riverfront
Construction of high-rise near RenCen to start in '08

Sharon Terlep | Link to Original Article @ The Detroit News

DETROIT -- General Motors Corp. struck a deal with a prominent development firm to build luxury condos at the epicenter of Detroit's riverfront, a move that comes as efforts to rebuild the city's long-neglected waterfront are coming together.

GM said Wednesday it will give the Houston-based Hines real estate firm six acres just east of the automaker's world headquarters in the Renaissance Center in exchange for a cut of the future profits from the development.

If the plan comes together as envisioned, the developers eventually would build 600 luxury condominiums that would sell for roughly $300,000 to $1 million.

Hines will build the project in phases, starting with a high-rise condo tower on a one-acre plot next to the RenCen. If that's successful, more will follow on three more adjacent parcels.

The developer hopes to break ground in the spring of 2008. The first residents could move in by the following spring. The overall project could take five to 10 years to complete.

While GM has for years promised to bring residential development to the riverfront, Wednesday's announcement is the most concrete sign yet that the vision will become a reality.

"We clearly want to be a part of the fabric of a great downtown and a great urban center," said Matthew Cullen, head of GM's Economic Development and Enterprise Services. "There needs to not only be places to work and shop, people need to be living there. It needs to be a 24-7 environment."

The development will be largely residential, designed to take advantage of the waterfront property and the many amenities offered in the RenCen, which houses retail stores, a movie theater, and restaurants.

Hines will head up the development project, though GM will weigh in on any plans.

The riverfront for years offered little more than a few struggling businesses, dilapidated buildings and acres of land scarred by heavy industry. The area is now designated as a Renaissance Zone, allowing for significant tax breaks.

GM took a lead role in the riverfront's redevelopment with its $500 million acquisition and remodeling of the Renaissance Center, which replaced the GM Building as the corporation's global headquarters in 1996.

Detroit and the state then demolished three cement silos along the river, making way for the Detroit RiverWalk that's now taking shape.

GM timed Wednesday's announcement just before the first Detroit International RiverDays, which starts Friday with the waterfront promenade at the center.

The event will mark the grand opening of the East RiverWalk, a 3.5-mile walkway from Joe Louis Arena to the Belle Isle Bridge.

To be a successful center of city life, the public sections of the walk must be paired with robust retail and residential development, said Caroline Marks, spokeswoman for the RiverFront Conservancy, the nonprofit organization that will oversee the RiverWalk.

"A riverfront can't be just one thing or another -- it has to be a big comprehensive picture," she said.

Even as Detroit loses population, the city's center is attracting a core of young, educated and affluent residents to new housing, according to a market study released earlier this year by Katherine Beebe & Associates.

The downtown core, roughly bordered by the Detroit River, the Lodge and Interstates 75 and 375, grew to 6,259 residents in 2005 from 6,141 residents in 2000.

While relatively small, the gain is seen as vital to a city that has lost more than 50,000 residents since 2000.

"We are convinced even though it's a tough time for our resident real estate market, there's still a lot of pent-up demand for people to live in the city of Detroit," Cullen said. "There is no better real estate in the region."

Hines has experience in Detroit. It was hired by GM to oversee the RenCen makeover and built the Comerica tower downtown. It also manages the City-County Building and Compuware headquarters, both downtown.

It is one of the world's largest real estate firms, with more than 950 properties worldwide and $16 billion in assets.

"We understand that Michigan is having a bit of a lull, but we sense some strength in the downtown residential market," said Dean Stermer, a project manager at Hines' Detroit office. "We're going to aim for the top of the market in terms of what's available in Detroit."

The Hines development joins three other major riverfront projects in various stages.

Ex-Detroit Piston Dave Bing is heading up a $60 million luxury residential development -- called Watermark Detroit -- that calls for 112 apartments, town homes and condos priced from $400,000 to $1.2 million.

Another project known as Chene East, still in its early stages, is envisioned as a residential/retail development on a 40-acre parcel near the Belle Isle bridge.

A third riverfront project -- the @water, pronounced "Atwater," by developer Dwight Belyue -- began selling 225 units, including $1.5 million penthouses, in March. Deposits have been put down for 40 units, including two penthouses.

[Drew Dowdell]

Needs more balance. Detroit needs more middle class downtown housing that isn't a complete $h!hole. The idea that 300k is "base price" is laughable.

[mustang84]

The downtown core, roughly bordered by the Detroit River, the Lodge and Interstates 75 and 375, grew to 6,259 residents in 2005 from 6,141 residents in 2000.

Damn, those figures really speak how bad of shape downtown Detroit is in. Des Moines had 8,500 people living downtown in 2005 (up from about 6,500 in 2000) and the city proper is only about 200,000 people. Meanwhile, Detroit is over 900,000...

But this is good news for both GM and Detroit. There is a lot of potential in old rust-belt cities redeveloping their riverfronts. Both Omaha and Des Moines are nearly finished and it really does a lot to clean up the downtown area when you get rid of the rusty chemical tanks and abandoned warehouses.

[AxelTheRed]

Needs more balance. Detroit needs more middle class downtown housing that isn't a complete $h!hole. The idea that 300k is "base price" is laughable.

I tend to agree, but this isn't an entirely bad idea either.