Surface parking lots outside Comerica Park will remain undeveloped longer than originally proposed by the planners behind the latest version of District Detroit.
Construction will not begin this year on any of the 10 projects included in the $1.5 billion downtown mega-project, which received approval for nearly $800 million in state and local tax incentives last year. Residential and hotel projects will be prioritized over a high-rise office tower at 2200 Woodward Ave., that was originally slated to start construction last fall and finish by the summer 2025.
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The delay will also impact a 287-unit residential project at 2250 Woodward that included 58 discounted units for lower-income tenants. Construction was originally expected to begin in the fourth quarter of 2024.
Executives with Olympia Development of Michigan and Related Companies outlined the shift in their construction timeline during a conversation with BridgeDetroit and email exchanges in March. They expect to begin construction before a March 2025 deadline required under tax deals approved by the City Council and Michigan Strategic Fund. No public dollars will be received until construction begins, they said.
Developers said challenges with financing commercial office developments will push back construction on surface lots outside Comerica Park currently owned by the Detroit-Wayne County Stadium Authority.
The joint development team, a collaboration between the Ilitch organization and New York real estate magnate Stephen Ross, also cited urgency to coordinate housing projects with a University of Michigan academic building being built on a parking lot behind the Fox Theatre.
“We remain hard at work to move our projects forward in The District Detroit, in line with the Transformational Brownfield Plan timeline,” the joint development team said in a statement. “Financing commercial office developments is challenging nationwide, so we are resequencing the projects to meet the market demand created by the neighborhood’s existing entertainment venues and the (U-M Center for Innovation), where construction is currently underway.”
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The U-M Center for Innovation is considered a key component of the overall development vision by linking nearby housing and downtown amenities to a research and entrepreneurship hub.
Another residential project at 2205 Cass Ave., was originally planned to break ground in the second quarter of 2024 but will instead start in 2025. Developers plan to create 261 apartment units, including 54 discounted units for residents The site is currently a commercial parking lot.
Hotels planned in the Fox Theatre and a vacant area south of Little Caesars Arena are expected to come before office projects. Developers expect to begin construction on one of the projects in 2025.
Construction on the hotel adjacent to LCA was previously planned to start construction in the second quarter of 2024. The Fox Theatre hotel was originally planned to start redevelopment in 2026.
The development team did not provide details on why redevelopment of the Detroit Life Building was pushed back from 2024 or provide a new start date.
Developers were adamant that the “resequencing” was not due to a lack of demand for office space or a reflection of negotiations with the Detroit-Wayne County Stadium Authority to purchase lots outside Comerica Park. There’s a roughly $10 million gap in appraisals for the land.
An unnamed “anchor tenant” is still committed to filling a majority of the office space at 2200 Woodward, developers said. However, a roughly 50% increase in interest rates during the last year caused challenges for financing commercial office developments. Developers said this is a national trend and not unique to Detroit.
A public plaza stretching west to the U-M center is also planned between the two buildings outside Comerica Park, along with ground-level retail and an underground parking garage. All of the construction adjacent to Comerica Park will start around the same time to minimize inconveniences for Detroit Tigers fans.
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