District Detroit changes timeline for office building by Comerica
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A rendering (left) for a tower planned with nearly 500,000 square feet of office space in front of Comerica Park, and a 261-unit residential building (right) planned adjacent to the U of M Center for Innovation. Renderings: Courtesy of District Detroit via public documents
District Detroit developers' construction of an office building in front of Comerica Park is on hold because financing for new office space isn't attainable in today's market, they tell Axios.
Why it matters: The delay sets a new timeline for the $1.5 billion District Detroit development from the Ilitch family's Olympia Development and billionaire Stephen Ross' Related Cos.
- The developers now plan to build a residential building first, as well as hotel space, instead of starting with the office tower.
- There's no timetable for the office building's construction, which was scheduled to start last summer. However, a commitment from an unnamed anchor tenant has been secured, developers say.
State of play: Related and Olympia's overarching development plan involves building or renovating 10 buildings downtown and in Midtown, using around $800 million in state and local public financing.
- They plan 1.2 million square feet of office space, nearly 700 residential units, around 500 hotel rooms and 146,000 square feet of retail.
Context: The Ilitches have faced skepticism because previous development promises haven't been fully realized. There had been hope expressed for this new vision co-created with Ross' Related Cos.
Catch up quick: The developers and Mayor Mike Duggan were bullish on the viability of the new District Detroit office space when the development was announced — despite nationwide struggles with office leasing demand.
- The developers' bet hinged on Detroit's need for more of a particular kind of office space: Brand-new, "lifestyle" space for national and international companies that appeals to a post-pandemic hybrid workforce.
The latest: While the new office building at 2200 Woodward Ave. is now on hold, construction of a 261-unit residential building is anticipated to start in the first half of 2025.
- That timeline would put the residential building on track to open in late 2027, roughly alongside the U of M Center for Innovation (UMCI), the developers say.
- A 2025 groundbreaking is expected at either of the two planned hotels — one at the current Fox Office Building on Woodward and the other next to Little Caesars Arena.
What they're saying: The developers still believe in their vision for office space, but banks aren't generally lending money to build office buildings across the country, not just in Detroit, says Andrew Cantor, executive vice president at Related.
- "We want to deliver on UMCI's promise to spur growth and development," Cantor says.
Olympia and Related declined to comment on negotiations with Wayne County over the publicly owned land on which Olympia and Related want to build the on-hold office building.
Follow the money: In terms of their timeline, the developers are still in line to get public funding for the project, they say. But no subsidies have been received or will be until construction begins.
The bottom line: The District's expansion isn't going as planned, but developers remain optimistic.