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GRDadof3

50 Monroe to get de-skinned?

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Sam Cummings has purchased 50 Monroe, and is considering "de-skinning" the building(s) and returning them to their former look. Anyone know where those photos are of what the buildings used to look like? I remember a picture of a falling smokestack???

http://www.mlive.com/business/west-michigan/index.ssf/2012/06/downtowns_fifty_monroe_buildin.html

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Here's a link to a photo of what the Helmer Building side on Ottawa looked like:

http://kent.migenweb.net/GR/bldgs/Helmer.html

I always thought of it as being pretty non-descript but, as bad as it looks in the photo, it looks better than I remembered. I think it might be a real mess under the skin though. When they were remodeling the exterior, Pitsch Wrecking accidently put a big hole in the southern wall with a crane when they were supposed to be knocking down a chimney. So I think there might be a big patch underneath the metal skin.

The sign for Chic University reminds me that back in the late sixties I was making a delivery there once and held the door open for a young woman coming out the door. Little did I know that classes were ending so I ended up holding the door open for a hundred or so ladies as they were leaving.

Edited by walker

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I can't even believe how fantastic this would be. For a better view, I stole this from GRGridGirl (that's attribution, right? :)):

7399091456_f3a9cb45e0_b.jpg

Joe

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Looks like the decorated top was removed a long time ago. A real shame, since it seems decorative tops go ignored in restoration / reconstruction projects in the city. As for the facade itself, it looks like it was beautiful, but like walker, I worry that it might be a mess underneath. Especially with a facade like that, and considering the building now with its window placement, I fear there may not even be anything left of the street-side facade. I really hope I'm wrong.

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Agreed. My biggest worry is that they obliterated the facade as they tried to open up windows for the new facade. Sam Cummings has done some pretty extensive renovations to replace missing portions of a facade. I hope he takes this one to a whole new level.

I agree with the tops of old buildings. The Ledyard building had beautiful ornamental elements on the top of it at one time. I'd love to see someone bring these old elements back during a renovation.

Joe

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Somewhere there is a thread here with pictures. I know I posted some pics of the buildings just as the skin was being installed.

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Agreed. My biggest worry is that they obliterated the facade as they tried to open up windows for the new facade. Sam Cummings has done some pretty extensive renovations to replace missing portions of a facade. I hope he takes this one to a whole new level.

I agree with the tops of old buildings. The Ledyard building had beautiful ornamental elements on the top of it at one time. I'd love to see someone bring these old elements back during a renovation.

Joe

I don't think any real work was done to open up new windows on the principle street facades. If you look carefully through the tinted glass to see which areas are real vision glazing, I think you will find that the windows are still in their rough historic locations. Now the arches and such, on the other hand may very well really be gone. This was only 30 years ago though right? There should be some decent documentation of what was done somewhere, especially at the office of whomever was the architect.

Regarding decorative tops, I think many building owners realized in the 50 and 60s, when their buildings were just reaching the half-century point that fancy projections that high in the air are a maintenance nightmare (attachment rust, they are exposed to the most direct rain, they could potentially fall off the building, etc.) - hence why they were removed (in addition to the fact that they went out of style). Truth is, these elements are now more expensive to manufacture than in 1900, and still require constant maintenance, even though new synthetic materials have made recreating cornices more possible. We should actually be thankful that all of our Italianate buildings on Monroe Center have in-tact or recreated cornices, as most cities cannot say as much.

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They definitely stripped the ornamental pieces off, but if the kept the window alignment somewhat the same and didn't pop a boatload of holes in it, it seems doable (for a price :)).

dt-50monroe-old1-facade.jpg

dt-50monroe-old2-helmer.jpg

dt-50monroe-old5-overview.jpg

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I don't think 50m currently looks hidious, BUT I am giddy to have a look out of the past again. Especially after the all the modern development up on the Mile, I want to see some older restorations again.

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I can't imagine how this would ever be worth doing, unless CWD is in the business of throwing good money after bad. The only guess I can make is that they're trying to buy all of the downtown office space so they can jack up the rents. Beyond that, their strategy makes no sense to me. Land banking, I suppose. From what I've heard, they aren't negotiating on rents to keep tenants in their buildings, either. This is all very, very strange, and I do hope it ends well for them. That said, I suppose they probably have enough money that they just don't care. Lots, and lots, and lots of office space speculation going on by them.

They definitely stripped the ornamental pieces off, but if the kept the window alignment somewhat the same and didn't pop a boatload of holes in it, it seems doable (for a price :))

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While I generally prefer the historic look over modern. I just don't see it working here.

Historic 50 Monroe has one good side. That would be the Ottawa facing facade (which is about 15-20% of the exterior surface area). The remaining part of the building (about 80-85%) is just plain ugly. And since this building(s) sits in the middle of a whole bunch of surface parking lots, all sides of 50 Monroe is highly visible from everywhere around it. Maybe that will change some with Bobville. But I don't think Bobville will hide enough of the ugly parts of this building.

Now if 50 Monroe were to have a whole bunch of infill built around it then let the Historic street facades shine.

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From what I've heard, there is a lot of movement in the downtown real estate market. 50 Monroe nearly lost Huntington a while back, maybe this an indication of something bigger to come (the lot that CWD owns on Fulton/Ionia is a perfect spot for someone looking for shiny, new office space).

I know that I worked for a company about 10 years ago that considered moving into several floors of 50 Monroe, but in the end, they hated the awkwardness of the space (multiple steps/levels on a single floor). It might be a hard building to rent in it's current configuration.

It'll be interesting to see if they'd separate the buildings and give them different uses (office/condos/apartments)?

Joe

I can't imagine how this would ever be worth doing, unless CWD is in the business of throwing good money after bad. The only guess I can make is that they're trying to buy all of the downtown office space so they can jack up the rents. Beyond that, their strategy makes no sense to me. Land banking, I suppose. From what I've heard, they aren't negotiating on rents to keep tenants in their buildings, either. This is all very, very strange, and I do hope it ends well for them. That said, I suppose they probably have enough money that they just don't care. Lots, and lots, and lots of office space speculation going on by them.

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I can't imagine how this would ever be worth doing, unless CWD is in the business of throwing good money after bad. The only guess I can make is that they're trying to buy all of the downtown office space so they can jack up the rents. Beyond that, their strategy makes no sense to me. Land banking, I suppose. From what I've heard, they aren't negotiating on rents to keep tenants in their buildings, either. This is all very, very strange, and I do hope it ends well for them. That said, I suppose they probably have enough money that they just don't care. Lots, and lots, and lots of office space speculation going on by them.

I was thinking the same. $10 - $20 Million to pull the skin off and bring the old back to something decent? When there's only 40% occupancy? And then they'd have to raise the rents to offset the investment? I don't see it happening. Probably just raised the idea of it to get some free PR.

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If cwd was to build that 8 story glass tower, and bob to expand, that area would look alot more dense!!!

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The thing of it is, they keep buying stuff like crazy--most with poor occupancy rates--it isn't just this building--and then after buying, tell tenants to pay above-market rents, or walk. Then we get strange concepts like ripping building skins off and rehabbing, which would be horrendously expensive, for a building that already looks just fine. What in the world is going on? Is there really some huge, pent up demand for more office space in a high tax, high cost center city location? I'm thinking all the free PR in the world isn't going to fill their massive inventory.

I was thinking the same. $10 - $20 Million to pull the skin off and bring the old back to something decent? When there's only 40% occupancy? And then they'd have to raise the rents to offset the investment? I don't see it happening. Probably just raised the idea of it to get some free PR.

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The thing of it is, they keep buying stuff like crazy--most with poor occupancy rates--it isn't just this building--and then after buying, tell tenants to pay above-market rents, or walk. Then we get strange concepts like ripping building skins off and rehabbing, which would be horrendously expensive, for a building that already looks just fine. What in the world is going on? Is there really some huge, pent up demand for more office space in a high tax, high cost center city location? I'm thinking all the free PR in the world isn't going to fill their massive inventory.

In the most recent Colliers International market report for 4th Q 2011: "Look for some major office buildings to transition ownership this year as debt becomes due and investors look to take advantage."

Class A vacancy rates downtown are still at around 22 - 24%.

http://dsg.colliers.com/document.aspx?report=2457.pdf

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They did get a "deal" on it..

  • 03/28/2012 Sale price $6,750,000.00 From MERCANTILE BANK OF MICHIGAN To CWD 50 MONROE LLC
  • 02/03/2012 Sale price: $1.00 From 50 MONROE LLC To: MERCANTILE BANK OF MICHIGAN
  • 10/17/2005 Sale price $13,167,000.00 From: 50 MONROE PLACE PRTNSHP To: 50 MONROE LLC

Edited by twoshort

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They did get a "deal" on it..

  • 03/28/2012 Sale price $6,750,000.00 From MERCANTILE BANK OF MICHIGAN To CWD 50 MONROE LLC
  • 02/03/2012 Sale price: $1.00 From 50 MONROE LLC To: MERCANTILE BANK OF MICHIGAN
  • 10/17/2005 Sale price $13,167,000.00 From: 50 MONROE PLACE PRTNSHP To: 50 MONROE LLC

Eesh. I remember when 50 Monroe LLC (Craig Hall and Dave Samrick) bought the building.

http://blog.mlive.co...tay_in_dow.html

I assume the sale for $1 to Mercantile meant the building was foreclosed on? Short sale?

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Ouch. The "dollar" sale was probably in a valuation affidavit, not updated yet by the assessor, or some sort of negotiated take-back. Whatever the case, the bank took a bath on it. But read on for something that'll really make you cringe (although it got a bit long).

Based on your comments, I checked the assessor records, which were interesting. There's an interesting side story to this whole deal that (potentially) explains a lot of this situation (and which will make you take a deep, deep breath): The SEV on this building is $9.2 million, or a presumed FMV over $18 million. A tax appeal was originally docketed in 2010 for those years, with 2011 added. CWD just docketed another one for 2012. Do the math on this: Let's just assume it comes down to $8 million FMV ($4MM SEV), which is a $5.2 million SEV difference. At 50 mills, that's about $260,000.00 a year. If the appeal goes south, CWD get stuck with that excess bill. If they win, they make out like bandits (assuming all the other numbers work).

How does CWD win? What is $260,000.00 a year worth at even a 10% capitalization rate? $2.6 MILLION in building valuation. And quite frankly, that rate is probably too high, since this is virtually guaranteed money if the cards fall right. CWD (theoretically) increases building valuation by a significant percentage of that because it will go directly into a reduction of expenses. $3.7 million might be a fairer number, using a 7% rate. I would much rather gamble on winning this tax appeal than on increasing occupancy. At the same time, the current owner has to take a massive percentage of that valuation reduction because of the not insignificant risk of losing the tax appeal. The building, as a result, is massively devalued--"taxes under appeal" might get you some small fractional percentage of that lost value back, but not much. Investing in overtaxed properties is a good way to make a buck if you've got an appetite for a degree of risk and the ability to float the taxes for awhile, because any tax reduction goes straight to the bottom line.

Now, let's assume the lawyers get this really, really right (which I suspect they will), and CWD says "forget you guys, we're not settling--you had three years to cut a deal with the last guys" and they get it down to $7,000,000.00 FMV. Based on the actual taxable value difference of $4.1 million, and assuming a tax rate of 50 mills, the City may have to write a refund check for 2010, 2011, and 2012 for about, oh ... $615,000.00 plus interest. Where is that going to come from, since the City probably spent it already?

Here's a better question: Why didn't the City settle this thing a very long time ago and preserve at least some of the tax base it now is likely to lose? That $2.5 million is a real reduction in value which the City rightfully ought to lose in its tax base--since they trashed the value of this building by overtaxing it--and which the new owner ought to enjoy, gratis. Talk about stupid. My guess is, there are dozens more of these cases all over the City. Why they keep litigating stuff like this is baffling. The notion that this building is worth more than it was purchased for in 2005 (or the outstanding mortgage balance more recently) is simply ludicrous. There was room to settle this thing, but my guess is that the City stood pat. I can't imagine the prior owners were in any position to be obstinate and lose their building.

The real losers here are Mercantile and the City. The City (potentially) loses the revenue stream off of value it could have preserved, and Mercantile loses all of that money as a result of the building devaluation. Oh, and the former owner loses, too, since he did sort of lose his building. My guess is $400k would have been rather helpful to him. CWD, of course, wins big time assuming they got everything else right.

As for my former comments about not understanding what CWD was up to, I hereby retract them. If the tax appeal is a good bet (which I think it is), this is a fantastic deal based on that alone because they stand to increase building value by around $3 million just by winning the tax appeal. My guess is that they paid next to nothing for that potential gain. That's an absolutely brilliant play.

They did get a "deal" on it..

  • 03/28/2012 Sale price $6,750,000.00 From MERCANTILE BANK OF MICHIGAN To CWD 50 MONROE LLC
  • 02/03/2012 Sale price: $1.00 From 50 MONROE LLC To: MERCANTILE BANK OF MICHIGAN
  • 10/17/2005 Sale price $13,167,000.00 From: 50 MONROE PLACE PRTNSHP To: 50 MONROE LLC

Eesh. I remember when 50 Monroe LLC (Craig Hall and Dave Samrick) bought the building.

http://blog.mlive.co...tay_in_dow.html

I assume the sale for $1 to Mercantile meant the building was foreclosed on? Short sale?

Edited by x99

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x99, what makes you so confident that they will win the appeal? and what is the real value of the property? I guess that is the real question but in raising the valuation of the property if they win they also (maybe not) instantly increase the taxable value. it seems rather circular. even if they don't get the property tax rebate/decrease it still seems like a win for them though.

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