DISCOVERY AT THE BUILDING ALEX PEREIRA, CHRIS GRIFFIN, ANIKET JOSHI, MINGHUI HUANG NOW THEN THE POSSIBILITIES The Detroit Free Press Building, an Albert Kahn creation built in 1929, is currently for sale at a price of $6.5 million. The property, listed by Friedman, is owned by Investor Emre Uralli who acquired it for over $2,500,000 by buying out distressed debt and foreclosing on the owner. The high rise redevelopment opportunity consists of 14 floors and a 3 level basement consisting of approximately 290,000 total square feet. The Art Deco style building consists of a steel frame structure with limestone facing and although it is presently unoccupied, the building is in good structural shape. The building has the potential to support lower level retail, a second story office, approximately 140 apartment units and 3 levels of basement parking which support approximately 115 spaces. When constructed the building originally housed the Detroit Free Press offices and the printing presses where history was catalogued for the masses making it a unique historical proposition worth saving. The building itself boasts gorgeous hand carved reliefs and sculptures giving the building a unique architectural façade unlike any other building in Detroit. Detroit itself is experiencing a Renaissance thanks to the interest of numerous Billionaires in the region such as Dan Gilbert, George Karmanos, Roger Penske and the Ilitch family. Dan Gilbert has personally acquired 11 buildings in the area touting his “big bang” plan for redeveloping the Woodward corridor into an expansive retail/ and loft style corridor. Detroit is experiencing positive traction and attention on a national level as more eyes focus on this dynamic growth opportunity. The buildings close proximity to the office sector makes it an ideal candidate to target local business people who work in the area but may be presently commuting The Detroit Free Press is one of the few rare opportunities to take advantage of massive tax credits that no longer exist for new projects and have already been approved by the federal government and the state removing a large portion of the inherent risk of these redevelopment projects. BUSINESS CASE •BUILDING IN GOOD SHAPE •OCCUPIED UNTIL 1998 AND FINISHED VACATING IN 2001 •UNIQUE HISTORIC BUILDING WHICH HELPED MAKE NEWS MAKING IT A UNIQUE VALUE PROPOSITION •EXCELLENT HIGHLY VISIBLE LOCATION •GATEWAY TO WASHINGTON BLVD/ CAPITOL PARK •UNOBSTRUCTED VIEW OF WASHINGTON AVENUE •REAL PARKING LOT CAN BE CONVERTED TO MORE USEABLE WALKABLE SPACE THAT CAN BE RENTED OUT TO THE NEIGHBORING DETROIT CLUB FOR WEDDING RECEPTIONS OR URBAN MARKET •3 LEVEL BASEMENT FOR PARKING •$33 MILLION OF APPROVED TAX CREDITS •POSSIBILITY TO ADD $20,000,000 NMTC •$56 MILLION REDEVELOPMENT PROPOSAL THE SITE IMMEDIATE SITE LOT VICINITY The (G) indicates a Dan Gilbert acquisitions and the opportunity for mass new urban retail space. The building sits at the head of Washington Blvd and the Financial District. While its Walk Score may arguably be very weak right now, as the center continues to develop we will see additional retail move into the area and push the score higher. Due to the excessive amount of blighted buildings in the urban core the score is low. As Detroit continues on its renaissance path, the additional lower level retail already built out will have an immediate impact on the site and score. The proposed lower level retail will incorporate at least 3 restaurants and the possibility of a weekend urban market all of which will positively affect the sites Walk Score. KEY STAKEHOLDERS Selling Broker Brownfield Tax Credits Ryan Snoek Michigan Economic Development Corporation Brownfield Redevelopment Authority Emre Uralli Commercial Mortgage Current Owner Free Press Building New Market Tax Credits Federal Historic Tax Credits David Blaszkiewicz Low Income Housing Tax Credits Mary King Michigan Historic Tax Credits The complexity associated with acquiring all the tax credits to make the development viable can be easily Edwin Harlin observed through all the different parties needed to bring the redevelopment into fruition. The benefit of the deal presently at hand is that the majority of key stake holders have already been assembled. The parties still left to participate at this point include MSHDA for LIHTC, Invest Detroit or another Community Development Entity for New Market Tax Credits, the city of Detroit for possible section 108 loans and a financial firm like Bernard financial for a Commercial Mortgage Backed Security or an Banking Entity for a construction and rehab loan CURRENT AND PLANNED REDEVELOPMENTS MAP KEY 1 Blue Cross Blue Shield “BCBS”- moved 3,000 employees to the Ren Cen or about 50% of its employees. The Ren Cen is now almost fully leased and near capacity. BCBS will begin to move an additional 2,000 employees to their newly leased space. 2 Compuware Building- Dan Gilbert, the owner of Quicken loans, the Cleveland Cavaliers and 40 other businesses, moved the Quicken loan headquarters here bringing 1,700 employees with him. By the end of 2012 he is expected to have 5,400 full time people here and growing 3 1001 Woodward- The First Federal Building. 330,000 sq ft office building currently 56% leased. Major tenants include GalaxE.Solutions Inc which moved from New Jersey to Detroit and most recently the University of Phoenix which leased 20,000 sq ft of space. The building fronts Campus Martius 4 Dan Gilbert’s Recent Acquisitions (he owns 9 total as of March 2012) A Chase Tower- 500,000 Sq ft. Currently 95% occupied. Retail will be added along Woodward Avenue B Dime Building- 23 story office space. Currently undergoing renovations C First National Building- $25mm renovations. 80% occupied now that Title Source Leased 150,000 sq ft D Madison Theatre Building- 100% leased. The location of Dan Gilbert’s technology incubator. E Two Detroit Center- Parking Deck. 1,100 spots. F Federal Reserve Building- Recent Acquisition. 176,000 sq ft. Big announcement of a single large tenant is expected 5 Elevator Building- 100 yr old historic building. 30,000 sq ft. converted to office space and 100% filled by artists and small businesses 6 Cobo Center- $221 million renovation currently under way. 40,000 sq foot expansion. State of the art convention facility once complete that boasts gorgeous river front views 7 Fountain Bistro- A Campus Martius Jewel. Completely renovated Bistro complete with full menu and liquor license 8 Somerset City Lofts- Somerset collection, one of the most profitable malls in America tested a concept of suburban retail in a temporary setting in Downtown. It was a smashing success. There is talks with the owners and Dan Gilbert to bring a portion of this collection permanently to the Woodward strip. 9 Capitol Park Loop- Sponsored by the Detroit Economic Growth Corporation, the park just underwent a $1.5 million renovation and there are proposals to redevelop 3 of the major buildings in this district to have retail, dining and entertainment 10 Broderick Tower- a 127 unit complete renovation headed by JC Beal. $53 million dollar project slated for completion September 2012. Currently, as of March the building is 50% pre-leased with rents ranging from $1.45 to $2.0 per square foot. 11 David Whitney Building- 19 story redevelopment presently under works. It will have a boutique hotel run by Marriott and for rent residential. $80 million redevelopment. 12 Penobscot Building- Historic office space and one of the crown jewels of Detroit. Currently for sale. The Woodward light rail project will prove to be a major economic driver for the region if the project is approved. There are presently four routes under discussion consisting of 3.4 Miles Surface Rail. This will prove to be the backbone of the Woodward corridor and has the capacity to become the retail catalyst in Detroit. The project is expected to cost $125 Million and have $4 Million an year operating costs of which the M1 group would be responsible to manage, operate and run. Presently private backers are $11 Million short of the entire proposed budget but there is the probability of a $25 Million Federal Grant that could cover the shortfall. Final financial feasibility study is due by the end of April and the decision to award the remaining $25 Million will come sometime at the end of May. Our group believes if the federal government does not step in with the additional requested aid, the consortium of private backers will pick up the slack and bring the project to fruition as it is an imperative piece of Dan Gilbert’s redevelopment efforts and his “Big Bang” theory on redeveloping the Woodward corridor all at once. THE VISION LET THE BUILDING COME ALIVE! •CAFÉ, •RESTAURANT, •BEER GARDEN • 2ND LEVEL OFFICE •LUXURY APARTMENTS INDOOR PLACE MAKING •BOTANICAL GARDEN •WALKING GARDEN •BENCHES •BRING PLACE MAKING INDOORS •TABLES •ENERGIZE THE ROOF TOPS •EXCITEMENT! Building Layout st 1 Floor Retail 7th – 14 th Floor Residential •6,350 sf ft rentable space •21,000 sq ft of rentable space 3rd – 6th Floor Residential Parking & Storage •19,500 sf ft rentable space •3 levels underground 2nd Floor Office •102,000 sq ft 32,000 sq ft of rentable space THE CONCEPT • The building concept is simple, has a symbiotic self sustaining business ecosystem enterprise encapsulated within the structure that supports lower level retail, a floor of office space that can take advantage of the lower level retail and provide for rent housing on floors 3 through 14 to help sustain the lower level retail by providing 140 apartments with an average of 3 people in each unit to help create a baseline consumption for the retail space below. • At the core of the concept is place-making! Why should place making be limited to outdoor parks and venues? In Michigan, the largest problem seven months out of the year is the frigid weather that prevents people from enjoying a beautiful walk-able garden.