District Detroit reduces affordable housing plan
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Conceptual rendering of an avenue next to Little Caesars Arena. Photo: Courtesy of Ilitch Companies
Plans to build 54 affordable apartments in downtown's arena district have been nixed, marking another walk back from the initial promises of District Detroit's ongoing $1.5-billion expansion.
Why it matters: The construction of affordable housing downtown was a key selling point for city and state officials who approved tax incentives in 2023 worth hundreds of millions of dollars to Stephen Ross' Related Cos. and the Ilitch family's Olympia Development for the expansion.
Catch up quick: The overarching development plan involves building or renovating 10 buildings downtown and in Midtown, using around $800 million in state and local public funding for the estimated $1.5 billion project.
- Of the project's promised 139 affordable apartments, 54 were to be built at 2205 Cass Ave.
Driving the news: Affordable housing will no longer be offered at 2205 Cass, state economic development officials said Tuesday, reducing the overall number of affordable apartments within the expansion to 85.
- Instead, U of M has entered into a letter of intent with Related and Olympia to lease the entire building as housing for its new Center for Innovation (UMCI) that's under construction next door.
- The maximum value of the state's $615 million tax incentive package given to Related and Olympia remains unchanged.
What they're saying: Related and Olympia said in a joint statement that they will eventually honor their affordable housing commitment.
- "We are pleased to support the UMCI by delivering on their request for dedicated graduate student and faculty housing, which we look forward to beginning construction on this year," the statement said.
- "We plan to honor our commitment to create 139 affordable units in future residential projects in The District Detroit."
- Mayor Mike Duggan's office did not immediately respond to a message seeking comment.
The other side: "While I can understand the utility of this decision from U of M's perspective, it feels like a punt on affordable housing, which was systemically removed from this neighborhood and which this neighborhood so desperately needs," Francis Grunow, a former Neighborhood Advisory Committee chair, told Axios in a text.
State of play: The Michigan Strategic Fund board, which initially approved the project's $615 million tax capture in 2023, voted Tuesday to amend that agreement.
- While the available income tax capture at 2205 Cass was slashed in half, developers will now be able to collect a portion of sales taxes connected to the project — at restaurants or clothing stores within the District's expansion, for example — worth up to $114 million.