Work Stalls on Book-Cadillac Renovation

[Allan]

As many of you probably already know, the Book-Cadillac Hotel in downtown Detroit is being renovated into a hotel & 80 condominiums. It was originally hoped that the hotel would be completed by the time the Super Bowl comes to Detroit in 2006. However, there have been unexpected financial setbacks, and work has been temporarily stopped. The hotel may now not open until 2006, instead of December 2005 like it was scheduled to.

Money woes check in at Book-Cadillac renovation

Work stalled as project backers reexamine costs

November 19, 2003

Hotel as seen from Washington Blvd & Michigan Ave.

Hotel as it was built in the 1920s

Venetian Dining Room

Grand Ballroom

Main Lobby

BY JOHN GALLAGHER

FREE PRESS BUSINESS WRITER

Work has stopped at the $150-million renovation of the historic Book-Cadillac Hotel and the showcase project may not be ready in time to host visitors for the 2006 Super Bowl.

Construction crews halted work recently after project backers discovered that construction cost estimates might be off by several million dollars, according to Paul Lemley, senior vice president and general manager of the Detroit office of Alberici Constructors, which has been handling the work. The company is one of the nation's leading contracting firms.

The budget gap apparently resulted when cost estimates put together by the contractor differed from the overall project cost developed by the hotel's new owners, the Dallas-based Kimberly-Clark.

Lemley said Tuesday that Kimberly-Clark was to decide as early as this week when to resume work.

David Dickson, a Kimberly-Clark spokesman, could not say Tuesday when work would resume.

"The project is at an evaluation point right now. That's relatively normal for these types of developments. You do get to a point where things get reevaluated as the project moves forward," he said.

Certainly, the Book-Cadillac is more complicated than many construction projects. The 1924 hotel, closed and deteriorating since the mid-1980s, will be completely redone inside and out. The extent of that work, including the unforeseen problems that inevitably arise, makes project estimating difficult.

Any lengthy delay in construction could push the reopening of the Book-Cadillac beyond its goal of late 2005, in time for the Feb. 5, 2006, Super Bowl at nearby Ford Field. When the project was announced, officials spoke of a 30-month construction schedule; it is now less than 27 months to kickoff.

"We could still make it," Lemley said. But, he added, "Every day that goes by, it becomes a tighter schedule."

Contractors typically use overtime and other scheduling tools to meet deadlines. "If the dollars are there, you can get anything done," said an official of another contracting firm, who asked not to be named.

City officials declined to discuss the problem. One project backer, asking not to be named because of the sensitivity of the issue, said the city still expects the project to proceed.

The budget gap was discovered sometime after Mayor Kwame Kilpatrick broke ground for the renovation project last July amid a swirl of optimism about downtown's comeback. Since then, contractors had removed a vertical strip from the front of the building to allow crews to clean debris from the ruined interior. But that work is on hold for now pending resolution of the construction budget issues.

The $150-million renovation is being headed by Kimberly-Clark, a consumer products company that has undertaken similar historic rehabilitation projects around the nation. Such projects rely on an array of federal, state and city tax credits and other financial inducements, as well as private investment.

The construction budget gap could be filled either by trimming costs or by identifying additional funding sources.

Just how big a funding gap exists could not be learned. Lemley estimated that it is less than $10 million.

One difficulty in closing the gap might be that the Book-Cadillac already benefits from most of the specialized tax credits and other inducements available to such deals, Lemley said.

"Kimberly-Clark is a very impressive organization, and they really would like to make a contribution to the community," he said.

Adding to the unpredictability of the project is the recent departure from Kimberly-Clark of Lynn Fournier, the company's former director of tax credit investments. Fournier put together the Book-Cadillac deal. The reasons for her resignation were not disclosed, but people close to the hotel deal said it resulted from the issues over the Book-Cadillac project. Fournier could not be reached for comment.

Even if the Book-Cadillac misses its Super Bowl deadline, many other downtown projects are in the works. As part of its overall Lower Woodward Improvement Program, the city has embarked on an effort to redo several major streetscapes, including Washington Boulevard and Woodward Avenue. The city also has launched a facade improvement program, offering matching grants to owners of downtown buildings who clean up their properties.

The goal is to improve the look of downtown by the time 3,000 news media representatives and tens of thousands of other visitors arrive for the Super Bowl.

While Kilpatrick and other city officials acknowledge that not all the projects on the city's wish list will be done in time, they say they do expect that downtown will show major improvement by the big game.

Contact JOHN GALLAGHER at 313-222-5173 or [email protected].

[turlough]

Well that sucks I think as wonderful as this building is more people should step up and help pay for the project.

[Allan]

Since the budget gap is less than $10 million, the financial issues will probably be cleared up very quickly. This is an important project for the city, so it will not fall through. I just want them to get back to work!

[tocoto]

I'm really hoping this beautiful old building can regain the glory it deserves.

[Allan]

I'm really hoping this beautiful old building can regain the glory it deserves.

It won't be fully restored, but the company restoring it will do the best it can to put back what the vandals destroyed & took from the building since it closed in 1984. The company has done a great job restoring similar hotels in other cities, so I know they will do the same for this one. One thing I really want them to put back is the elaborate cornices that were removed during its renovation in the 1950s. They are visible in the old postcard photograph, & it would add a lot to the building if they could be recreated & placed back on the building.