Bedrock has announced $2.1 billion in new investment for four downtown development projects that could bring up to 24,000 new jobs to Detroit.

The package, which includes the Hudson’s Site, Monroe Blocks, Book Tower and One Campus Martius expansion project,would bring 15,000 construction jobs and up to 9,000 permanent jobs to the city.The projects will reshape Detroit skyline as they will be built up, not out, and will take around five years to complete.

“Detroit is going vertical,” says Dan Gilbert, Bedrock founder and chairman. “In fact, that is the only way to create any type of significant expansion in the city because we are virtually at full occupancy for residential and commercial space in both downtown and Midtown.”

The projects must now go before the Detroit Brownfield Redevelopment Authority as the first step towards the approval of new state financing under the MIthrive program enacted into law earlier this year.

“Transformational projects like these are necessary to both accommodate the expansion of current downtown businesses as well as making Detroit a legitimate competitor for new businesses and massive opportunities (like Amazon’s HQ2), and attracting vital talent from all over the country and world,” says Gilbert.

“In addition, these critical projects will attract new visitors and residents as well as countless new visitors and businesses like Amazon to the city, which will create a ripple effect of economic impact and job creation,” he says.

Here are details of the four projects:

• Hudson’s Site—The approximately $900 million, 1 million square-foot redevelopment of the Hudson’s site includes the tallest tower in the City of Detroit. It will have a publicly accessible sky deck on top of the residential floors as well as restaurant, retail and office space, and extensive exhibit and public space.
• Monroe Blocks—The $830 million transformation of the Monroe Blocks between the Greektown district and Campus Martius Park includes a 35-story, 814,000 square-foot office tower, 482 residential units, restaurants and retail, and three public plaza space.
• Book Tower—The $313 million rehabilitation of the Book Building and Tower will bring this iconic building back to life with a combination of 95 residential units, 180,000 square feet of retail and office space along with a planned hotel.
• One Campus Martius—The $95 million expansion of the One Campus Martius site will provide 310,000 square footage of critically needed office space so Detroit can continue to attract new companies and jobs and sustain its growth and momentum.

“The economic impact this project will have on our city is larger than anything we’ve seen in generations,” said Mayor Mike Duggan. “Not only will it produce thousands of new jobs and opportunities for Detroiters, it will reshape the city’s skyline and attract even more re-investment in Detroit.”

Bedrock will invest equity and potential outside debt totaling $1.9 billion, or 88 percent of the project costs, while securing approximately $250 million in bond funding or 12 percent of the total cost of the projects through the MIthrive program.

Michigan Thrive Initiative (MIthrive)

Detroit will be the first city to put the Michigan Thrive initiative or MIthrive financing tool to work.

The program was created to help redevelop blighted areas, which currently bring in little or no tax revenue. It builds on the existing local Brownfield Tax Increment Financing (TIF) program by providing additional state support to make significant development opportunities across Michigan financially possible. Once completed the new developments will generate new tax revenues.

It works by allowing these projects to keep a portion of the new state tax revenue they generate to help close the gap between high redevelopment costs and what market rents can support. This mechanism is known as tax increment financing or “TIF.”

MIthrive allows the projects to retain:

• State sales and state income taxes from the construction activities on-site
• Up to 50 percent of the state income taxes generated from new jobs and residents within the completed developments.

Because of the way it was designed, the TIF for Bedrock’s transformational projects will not capture any City of Detroit taxes and has no impact on funding for Detroit schools.

Editor’s Note: Marge Sorge is the managing editor of TheHUB

Photos courtesy of Bedrock

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