Archived

This topic is now archived and is closed to further replies.

Allan

90% of Kales Bldg. Units Leased

Recommended Posts


It's good to hear that 90% of the Kales units have been leased.  Hopefully this will give a boost towards planned projects like the Met, Broderick, etc., and get some of these other vacant buildings redeveloped.

http://www.modeldmedia.com/developmentnews/kaleslease.aspx

<{POST_SNAPBACK}>

Now if only the slum lords will collectively get off their asses, we could have a very nice residential boom in the city.

Share this post


Link to post
Share on other sites

Agreed.

The Met and the Lafayette are city owned...still waiting for development deals to be completed on those. The guy who owns the Park Avenue Building & Charlevoix Hotel refuses to do anything until the city forces him to. The UA would make nice lofts, but it's not happening as long as it's in Ileech's hands. The Detroit Building would make the perfect little apartment building...I am a bit more confident on that one, simply because of what I've heard through the grapevine. The Broderick is going to be done sometime in the next 3-5 years, although it was supposed to be completed in 2000. The Farwell sits with a plan to convert it into lofts, but there won't be any movement on that until the Broderick is done, despite the fact that the county has sued Mike Higgins and told him that it has to be redeveloped or demolished. Then there's the Free Press Building...a beautiful building that looks worse and worse with each passing month. The list goes on and on....

Share this post


Link to post
Share on other sites

It looked like a dust storm, or shall I say asphault storm blew up onto the side of the Free Press building. Anybody see it? The limestone is now a very dark blackish-gray color. It's on the side facing the former post office building.

Share this post


Link to post
Share on other sites

Agreed. 

The Met and the Lafayette are city owned...still waiting for development deals to be completed on those.  The guy who owns the Park Avenue Building & Charlevoix Hotel refuses to do anything until the city forces him to.  The UA would make nice lofts, but it's not happening as long as it's in Ileech's hands.  The Detroit Building would make the perfect little apartment building...I am a bit more confident on that one, simply because of what I've heard through the grapevine.  The Broderick is going to be done sometime in the next 3-5 years, although it was supposed to be completed in 2000.  The Farwell sits with a plan to convert it into lofts, but there won't be any movement on that until the Broderick is done, despite the fact that the county has sued Mike Higgins and told him that it has to be redeveloped or demolished.  Then there's the Free Press Building...a beautiful building that looks worse and worse with each passing month.  The list goes on and on....

<{POST_SNAPBACK}>

I heard rumors (just recently) that the Met, and the Wurlitzer both are both making progress, and close to getting a deal done for redevelopment. However, I know this is something we all read everyday. Just hoping it's true.

Share this post


Link to post
Share on other sites

I've heard the Met & Wurlitzer rumors too. The Met is still city owned though, so no deal has been completed...I will have to check with my source to see if they are indeed close to completing a deal on that one.

Share this post


Link to post
Share on other sites

Its good to see that Kales is quite successful. Hopefully this will show developers that there is in fact demand to live in downtown Detroit. I also hope this speeds up the process on projects around the Grand Circus area. Who knows, a developer might see that Kales success and decide to develope the Statler site. Only good things can come from this announcement.

Share this post


Link to post
Share on other sites

I heard that if Kales fills up to 100% that the owners would/were considering purchasing the Park Ave. building and turning that into more living space in the downtown.

Share this post


Link to post
Share on other sites

Another forumer mentioned several months back that the Kales owners wanted to purchase a building on Park Ave for rehab, but he didn't know which building it was. Now it's starting to make a bit more sense. The Park Avenue Building would be perfect for lofts. If that gets renovated, we'd have a pretty nice little district going with the Iodent, Park Ave Hotel, Cliff Bells, Kales, & Park Ave Building. Not bad for a part of downtown that was pretty much left for dead.

Btw, welcome to the forum, Peteim!

Share this post


Link to post
Share on other sites

Yeah, the Park Avenue Building has some tall ceilings and large windows, it looks like, and would make for excellent loft condos or apartments or both.

BTW, I've always had a hard time coming cross interesting information for the buildings along Park Avenue. What is the history of the Park Avenue Building, and who currently owns it?

Share this post


Link to post
Share on other sites

The Park Avenue Building was designed by Albert Kahn. The main tenant was Absopure, which today has morphed into the Absopure Water Company. Back in the early days, the company was primarily an ice delivery company, although by the 1920s, they had significantly expanded, and even offered an electric refrigerator for sale. The parent company of Absopure was the General Necessities Company. The Park Avenue Building was originally called the General Necessities Building, and had a large sign on the roof that was nearly 5 stories high.

When completed, the building was a multi-tenant building. In 1923 Michigan Mutual Liability Co. had offices there. It is unclear if Absopure was ever the sole tenant of the building, but they were certainly the largest tenant.

The building has been completely closed for about 10 years. The last tenant to move out was a restaurant on the ground floor. It is owned by Triangle Management Co. out of Troy. The owner has said that he will not do anything to improve the building until the city makes him.

Share this post


Link to post
Share on other sites

Wha?! That sounds like a challenge to me. I wonder why they haven't taken him up on his offer. Most developers/owners are subtle enough to hint a renovation even when there are no plans. This man seems to be blatantly defying the city.

Are you sure he said that? It blows my mind that no one has taken him up on this dumb offer.

Share this post


Link to post
Share on other sites

Well, that's what the realtor who is marketing the building told me when I asked him if the owner had any plans for the building. The realtor told me that the owner has already rejected two offers for the building. The owner prefers a lease over a sale, but he will "sell at the right price." Who he expects to lease space to is beyond me. Nobody is going to lease space there, with the exception of maybe the ground floor. But even that requires significant improvement if it is to ever be functional again.

Share this post


Link to post
Share on other sites

This guy sounds like a real jerk for lack of a better term. These developers sitting on these properties that could very well be demolished should be taking what they can get. The thing is that they don't seem to be realizing that in waiting for "everyone else" to start a critical mass of housing, retail, and office space downtown, no one's doing anything accept for a few.

I think these type of developers would be best to settle, redevelop their building into something basic, like what was done with Kales, and build from there when demand warrants perhaps later changing to luxury condos.

Share this post


Link to post
Share on other sites

The guy is a jerk...that's one thing that definately came across in my conversation with the realtor.

You'd think that the owner would want to redevelop the Park Ave and the Charlevoix (he owns that too), but then look at what he pays to keep the two buildings....

The true cash value of the Park Avenue Building is $354,600. However, the taxable value is only $74,200, which means that he pays only $5325 per year in taxes.

The true cash value of the Charlevoix Building is $236,300. The taxable value is $23,900, which means that he pays $1713 in taxes.

All told, for the two properties he pays $7038 each year in taxes. The most likely scenario is that $7000 is barely a drop in the bucket for the owner. Now, say he needs to make $200,000 in upgrades to the Park Avenue Building so that he can lease out the ground floor to a restaurant. It would take years of rent from the restaurant to pay off those renovations. Given those figures, I would probably sit on the building too until I could either sell it for a few million dollars, or the city condemns the building and has to pay me market value for the building. In the meantime, sure, the city could give me blight tickets every couple months, but unless they were for thousands of dollars, I would just continue to sit on the building. An $80 or $100 ticket every now and then is such a miniscule amount, especially when you're talking about a 12 story abandoned building.

Say that I purchased the Park Avenue Building for $75,000 in 1995. If I hold onto the building for 15 years, I would have paid roughly $80,000 in taxes. Then I sell it to a developer in 2010 for $2.5 million. I just made a $2,345,000 profit without doing anything!

The city must restructure its tax structure so that it becomes unprofitable to sit on buildings for years and years without doing anything. Currently the owner pays very little taxes because the building is not valueable. It's abandoned, it has major code violations, it needs to be entirely remodeled...the building itself is not worth very much money. However, the land the building sits on is. It is just a couple blocks from the new stadiums, it sits right by Grand Circus Park, it has city water and sewer, etc. The solution, simply put, is to tax the land the building sits on, not the building itself (as is done now). This is called site-value taxation.

If you tax the land in downtown Detroit instead of the buildings, it will nolonger be profitable for building and parking lot owners to just sit on buildings. The owners will be forced to either sell their properties, or redevelop them.

This article is kind of long, but it's a good read. It explains exactly how site-value taxation works.

http://www.urbantools.net/kunstler.htm

Share this post


Link to post
Share on other sites

Yeah, I always think back to that piece of info I learned in one of my planning classes, but always conveniently forget it. lol

I wonder if Detroit urban planners and the assessors office have even thought of this, or if it's something that could easily be changed?

Share this post


Link to post
Share on other sites

A system of taxation similar to site-value taxation has been implemented in Pittsburgh, where a property's assessment is made of two different components: the value of the building and the value of the land. The land value portion of the assessment is given more weight than the building value portion of the assessment. Basically, it is a hybrid of the two different tax systems.

I think a system similar to Pittsburgh's should be further investigated to see if it would work in Detroit. I have a feeling that the city hasn't really thought about it because it is a fairly innovative idea. It would require changes to state law, and possibly even the constitution, but if it helps the decaying city centers in Michigan, it would be worth it. Urban planning in this country is so backwards it's not even funny.

Share this post


Link to post
Share on other sites

True, but especially in Michigan. There are only a few other rustbelt cities with such backwards planning practices. I feel bad for urban planners, and future urban planners, like myself, in Michigan because the laws really make their job hard to do. In fact, being an urban planner here is incredibly frustrating.

Share this post


Link to post
Share on other sites

The Kales Bldg is currently offering a free 42" plasma TV with a 2 bedroom lease, so who ever you are that's going to do this, let us know when you get it and we'll have the next UP at your place! I really want to see what the roof top view is like.

Share this post


Link to post
Share on other sites

They are going to make the roof into a solarium for the residents just like the park shelton. When I talked to the leasing guys a couple months ago, it didn't sound like they were going to work on that until the rest of the building was done, which I can see their point. Although, I'm not really sure when that time will come.

Share this post


Link to post
Share on other sites

Yesterday when I was downtown I was standing in the alley between the Park Avenue Building and the Charlevoix Building when I heard the sound of hammering coming from inside the Park Avenue Building. So tonight when I was downtown, I noticed that a light was on in the ground floor of the building.

park_ave_lights.jpg

I can't say I've ever seen that light on inside before. Am I seeing/imagining things, or is somebody doing work in there?

Share this post


Link to post
Share on other sites

Well at least I know I'm not crazy and seeing things. Do you know if it was on before this week...say a month ago? I never remember seeing it on before.

At first when I heard the hammering I thought it was just a noise the building was making...abandoned buildings tend to make very strange noises.

Share this post


Link to post
Share on other sites

  • Recently Browsing   0 members

    No registered users viewing this page.