The Dirt: Downtown delays, deals and studies

Downtown was in the news a lot this week. The District Detroit mega-project is delayed another year, the Downtown Detroit Partnership commissioned an expensive study related to I-75, and bird conservation advocates worry how several new skyscrapers might endanger migratory birds.

Bridge Michigan also looked at whether corporate incentives from the state brought “good-paying, high-skills jobs” to Michigan promised by Gov. Gretchen Whitmer. (Spoiler: Not so much.)

A “resequencing” of events

District Detroit developers announced last week that construction is at least a year and a half behind on their $1.5 billion project downtown.

The project was supposed to start last fall but won’t until sometime next year. Executives with Olympia Development of Michigan and The Related Companies said they struggled to secure financing for the project’s office buildings. Land needed for what was supposed to be District Detroit’s first office building at 2200 Woodward Ave. is still owned by the Detroit/Wayne County Stadium Authority ; the two parties have not agreed on a sale price.

The developers insist the delay doesn’t mean trouble. Instead, they say there is demand for their project’s office space and that an unnamed “anchor tenant” has committed to leasing the majority of 2200 Woodward Ave.

Vacancy rates remain high at other downtown offices.

The developers now plan to change the order of buildings to break ground, starting in 2025 with a residential tower on Cass Avenue, followed by one of two proposed hotels. All 10 developments that comprise District Detroit must be completed to get all the nearly $800 million in public incentives that the state and city already approved for the project. (BridgeDetroit, Outlier Media)

Spend money to not make money

Michigan shelled out $335 million in corporate incentives last year, mostly for the construction of new manufacturing facilities. Gov. Gretchen Whitmer promised “good-paying, high-skills jobs” in return for the investment. The 83 companies that got incentives last year said they would create 11,408 jobs.

But around 40% of those jobs pay less than Michigan’s median wage of $45,510, according to an analysis by Bridge Michigan. Officials for the state argued that the pay for these jobs often exceeds the median incomes of the Michigan regions where those jobs are located. They also emphasized that the state considers factors beyond wages when approving incentives. (Bridge Michigan)

Put a cap on it

The U.S. Department of Transportation and District Detroit’s developers have given the Downtown Detroit Partnership (DDP) a total of close to $4.3 million to study building a “cap” over I-75 downtown (paywalled). (That’s a nice chunk of change for whichever consulting firm wins the contract!)

Covering the freeway would allow the construction of green space while freeway traffic continues to pass underneath . The DDP hasn’t provided any estimates for how much of the freeway would be capped or how much it would cost, but a 5.2-acre park built on a freeway cap in Dallas cost $110 million when it opened in 2012.

The proposal comes amid a nationwide conversation about correcting freeway mistakes that split apart neighborhoods, including a highly contentious debate over I-375 . (Crain’s Detroit Business, Detroit Free Press, Outlier)

Regression to the mean

Property taxes for Detroit’s poorest homeowners continue to be overassessed , according to an analysis by researchers at the University of Chicago. The researchers found that, on average, the city overassessed properties at the bottom end of the market. This continues a trend of what the researchers call property tax “regressivity,” even after a citywide reassessment in 2017. This isn’t fair, but it also affects a relatively small group of people. Homes worth this little already have extremely low property taxes, even if they are overassessed. And the study found that the vast majority of homes at all other price brackets are actually underassessed. If you’re worried or just curious about how your home’s assessment stacks up, use Regrid’s Detroit Assessment Gauge . (University of Chicago, Outlier, Regrid)

Boondoggle

The long-delayed Wayne County Criminal Justice Center in Detroit will cost taxpayers almost $100 million more (paywalled) than the county originally estimated. Bedrock Detroit paid for construction cost overruns as part of a deal with the county. But the county spent tens of millions of additional dollars on several items, some of which are real head-scratchers, including building a $34 million DTE Energy plant and paying $27 million to Bedrock for a parking lot. The county didn’t respond to questions from reporters and has not announced the final price tag for the center or how it’s paying for the extra millions of dollars. Construction of the center, which was originally supposed to open two years ago, is nearly complete. The county will have six months to open it once Bedrock hands over the keys. (Detroit News)

Development news quick-hitters

Public engagement nonprofit Sidewalk Detroit has commissioned an installation to draw attention to and mitigate pollution from Stellantis’ factory just blocks away. The Detroit Remediation Forest will have trees, air monitors and a sculpture honoring two African queens and the two co-founders of local nonprofit Canfield Consortium . (Metro Times, BridgeDetroit)

The Tigers are spending $30 million renovating Comerica Park ahead of opening day on April 5. The most notable upgrade will be to the big video board in the outfield. Fans said the ballpark was looking run-down this most recent season (to say nothing of the team itself). (Crain’s, Metro Times)

Members of the Detroit Bird Alliance, formerly the Detroit Audubon Society, are concerned about how two glass buildings by the river, built on the former Joe Louis Arena site, will affect migratory birds. Detroit is a crossing point for many birds, and the new hotel and luxury apartment skyscrapers in the so-called Water Square area could be especially deadly to them (paywalled). (Crain’s)

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