Luxury Living Finds Home in Detroit

[Allan]

This view of the Detroit River helped sell Rhoda Henderson on downtown living. Such affluent buyers anticipate the area will eventually draw more retail services.

Rhoda Henderson is one of more than 30 residents to invest in a pricey condo unit in a former brick warehouse. City and commercial projects are bolstering a resurgence of such housing options in downtown Detroit.

Frank Fraga, drawn to Detroit's urban character, moved from Ann Arbor to a $220,000 condo in this building at Woodward and Selden.

Frank Fraga accepts a lack of full-scale grocery stores as a "trade-off" for the city's urban character and diversity.

Luxury living finds home in Detroit

Upgrades downtown help fuel growth

By R.J. King / The Detroit News

DETROIT -- The lack of downtown department stores and movie theaters didn't stop Rhoda Henderson from spending more than $350,000 on a historic condominium along the Detroit River.

"I have a rooftop deck where I can see the river all the way from the Belle Isle Bridge to the Ambassador Bridge," Henderson said.

Henderson is taking part in the surprising growth of new and renovated luxury condos, lofts and town houses in downtown Detroit, a city known more for abandoned houses and a dwindling population.

High-profile entrepreneurs A. Alfred Taubman and Max Fisher are among the developers leading the push. Next year, Taubman's Riverfront Apartments plans to convert two of its three towers to condos, about 570 units, with prices ranging from $95,000 to $310,000.

Taubman also is eyeing land along the Detroit River for another residential development that could happen down the road.

Other developments in the works:

* Slavik Murray Investments Co. LLC in Detroit plans to finalize a deal next month to purchase Harbortown, a residential, retail and marina community along the Detroit River near Belle Isle. Plans are to convert 272 apartments into condos priced from $140,000 to $350,000. The company also plans to add two 15-story residential buildings at Harbortown offering a combined 300 condos.

* Redevelopment of the city-owned Uniroyal site near Belle Isle. Next year, the city will ask private developers to add more than 100 residences along E. Jefferson complemented by a riverfront park.

* River East, a collection of future residences, shops, offices and recreational uses is planned east of the Renaissance Center. Construction is expected to start in the next two years.

The efforts come at a critical time for Detroit, which is hosting the Super Bowl in January 2006.

The city has spurred residential development by using a multipronged strategy of giving tax breaks, repairing roads and infrastructure, improving city services and cracking down on crime.

Commercial projects, too, have energized downtown: Ford Field, Comerica Park, Max M. Fisher Music Center, Compuware's new headquarters and General Motors Corp.'s move to the RenCen are recent additions.

"You can point to a lot of things that caused people to leave Detroit, but our focus now is on improving downtown and the neighborhoods to bring more people back, rich or poor," Detroit Mayor Kwame Kilpatrick said.

A solid residential base will boost the city's tax base and help create a vibrant downtown by attracting major retailers and eateries, Kilpatrick added.

In recent years, the city has shown modest progress in landing upper-income residents.

The U.S. Census Bureau reports that the number of downtown Detroit households with annual incomes of more than $100,000 increased from 157 in 1989 to 392 in 1999.

Plus some 111 households along the riverfront from downtown to Belle Isle had $100,000-plus incomes in 1999. More builders are reporting demand for homes or condominiums priced above $300,000 as well.

The number of new mortgages in the downtown and riverfront areas jumped from 34 in 1998 to 83 in 2002, according to the Federal Financial Institutions Examination Council. This involved one- to four-family, owner-occupied homes. Of those mortgage applicants, 25 had gross annual incomes above $100,000, up from five in 1998.

The new residents include people like Henderson. Over the summer, she moved from Detroit's Lafayette Park to the Lofts at 200 Riverplace near the Omni Detroit Riverplace Hotel.

The native Detroiter joined more than 30 other condo owners in a former brick warehouse that once served as pharmaceutical labs. Eighteen units are left to be sold by the developer, Farbman Group in Southfield.

"I really enjoy visiting my neighbors to see how they designed their space," Henderson said.

She's an example of the kind of resident city leaders and developers would like to bring back downtown. But housing experts question whether people with means will spend $300,000 -- the starting price for luxury residences -- without nearby amenities like a Coach or Polo store, trendy restaurants or service shops.

Henderson, for example, recently drove 20 miles from her home so she and her out-of-town guests could see a movie.

"My Chicago friends saw Ford Field and were just fascinated with it, but when it came time to see a movie my one friend said: 'Rhoda, don't you have any theaters near you?' And I said: 'Not yet,' " Henderson recalled.

Landing affluent homebuyers is an uphill battle in a city like Detroit, said Taubman, who built the Riverfront Apartments west of Joe Louis Arena in the early 1980s with Fisher.

Since 1950, Detroit has lost roughly half of its 2 million population. The flight of the well-to-do was hastened by deteriorating services, crime and the 1967 race riots. The median household income for greater downtown residents is now roughly $26,600.

"Every great city needs to have a balanced housing market to keep and attract residents," Taubman said. "You must offer a mix of starter homes, move-up homes and luxury homes so people will stay and move up or down depending on their lifestyles."

A 2002 residential study commissioned by the Greater Downtown Partnership, a nonprofit planning group in Detroit, concludes that downtown could attract more than 300 new homeowners per year if interest rates remain affordable -- below 8 percent for a 30-year fixed rate mortgage -- and the city continues to upgrade its streets, sidewalks, parks and recreational offerings.

Young singles and couples are the largest potential pool of residents, about 58 percent, according to the study, conducted by Zimmerman/ Volk Associates Inc., a research firm in Clinton, N.J. Empty nesters and retirees are expected to make up about 27 percent of potential residents, with the remainder represented by families -- traditional and nontraditional.

But whether Detroit can draw around 300 residents per year for the foreseeable future remains to be seen. Last year, downtown added about 320 residents, according to city officials.

Taubman, former chairman of mall developer Taubman Centers Inc. in Bloomfield Hills, said the city needs to provide more housing subsidies to attract residents.

"The city should look at marking down the land it sells for development and providing more incentives for residents to live there," Taubman added.

Some developers are starting to see their efforts pay off.

The Lofts at Rivertown, a historic warehouse along E. Jefferson near Belle Isle that was converted into 172 apartments in the 1980s, began converting into condominiums a year ago. Today, 85 residences have been sold for between $100,000 and $700,000, said Jamie Murray, president of Slavik Murray Investment Co. LLC, which owns Lofts at Rivertown.

"There is demand for luxury homes and condos in Detroit, but to get more wealthy residents, you need to offer more housing and continue to add shopping and services," said Bernie Glieberman, president of Crosswinds Communities Inc. in Novi, which is building 700 condos in Brush Park north of Comerica Park and more than 100 condos in New Center.

Glieberman is encouraged by the more than 300 residents who have purchased condos in Brush Park and New Center over the last three years. The median income of his buyers is $96,000, while the median age is 37.

Overall, the greater downtown area, bounded roughly by the Lodge, Ford and Chrysler freeways and the Detroit River from Belle Isle to the Ambassador Bridge, has a population of 12,600 residents, a slight increase from nearly 12,000 residents in 1990, according to census data.

Frank Fraga, 32, who recently moved from Ann Arbor to a $220,000 condo near the Fisher Music Center at Woodward and Selden in Detroit, said he was attracted to the city's urban character and diversity.

"I was never a fan of suburban life where all the lawns are the same," said Fraga, project architect for DeMattia Group, a development firm in Plymouth. "I can ride my bike, the Detroit Institute of Arts is close by and there's a lot of great people here."

While Fraga admits there is a lack of full-scale grocery stores near his home, he said he shops for food at a store near his office. "Sure, there's some trade-offs, but you get that any where you go," he said.

You can reach R.J. King at (313) 222-2504 or [email protected]

[turlough]

Now that's nice that's real nice I mean very nice I'm so happy for Detorit

[Allan]

Projects like these have been going on for a while, but it's good to see that the media is FINALLY noticing. In a few years this city will be nothing like it is today. The city's population will have stabilized, or will have gained some people .

[MichiganDude]

This is a market now that people are starting to see... which is awesome! Anyway who would want to live in a McMansion in like Plymouth or whatever? What fun is that? You have nothing there, well retailing, but other than that it's a pretty boring place! Where as Detroit has the museums, theatres, soul, music, stadiums, blah blah blah, etc... I believe Detroit has 1,000,000 people still, due to immigrants and whatnot... The census is just saying we don't because if you have 1 million people then that costs the government more money, so they have to give you more. Sorry just rambling... anyway great news!

[Allan]

I also think that Detroit still has over 1,000,000. The census bureau has even said it undercounted in Detroit. Even if it doesn't really have 1,000,000 now, I'm confident that the population will pass the 1,000,000 mark by the next census if the rate of development continues.