Developers, forum focus on I-275 corridor

[Allan]

I'm actually surprised that this doesn't talk about extending M-5 north to I-75, as was originally planned with 275. Anyway....

Developers, forum focus on I-275 corridor

BY PAULA GARDNER

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A steady increase in property values parallels the decade-long growth along Metro Detroit's Interstate 275, marking the corridor as prime for both infill and new construction.

Described as the spine of the western suburbs, the corridor already has attracted numerous projects, including the $75 million College Park retail and office center in Livonia; the $300 million headquarters of auto supplier Visteon Corp., Visteon Village, in Van Buren Township; and retail centers such as the 24-acre Willow Creek retail center in Canton Township and Fountain Walk in Novi.

The commercial development follows rapid residential growth, reflected in a $7.7 billion increase in housing values - or 70 percent - from 1993 to 2003, according to regional data adjusted for inflation.

The corridor's communities include some of Detroit's older suburbs, such as Livonia and Farmington, long-term growth communities like Novi and Canton Township, and the emerging townships such as Van Buren to the south and Northville Township.

The range of development age among the highway's communities gives each its own characteristics, said Larry Hadley, a mortgage banker at Hadley & Associates of Novi.

"It's an interesting corridor, based on a freeway that transcends both Oakland and Wayne counties," Hadley said. "That fairly long freeway linkage has spawned a tremendous diversity in its path over the years." Hadley, also an instructor at the University of Michigan Business School, leads this year's U-M/Urban Land Institute Real Estate Forum.

The two-day event will focus in the I-275 corridor, including residential and commercial development highlights. The first day features a bus tour, with participants spending the second day at breakout sessions in Ann Arbor.

The focus on the communities that border the highway will give participants a chance to gain perspective on the western edge of Metro Detroit even as it pushes further out - toward Ann Arbor and north along the M-5 connector toward Commerce Township in Oakland County.

"I-275 is one of the fastest-growing parts of the region," said Jim Rogers, data center manager for the Southeast Michigan Council of Governments.

Rogers cited growth in housing, commercial development and employment along the corridor. The growth, he said, "has to do with its position in the region as the region continues to grow: It's on the edge and well-served by transportation."

Even in the faster-growing communities, like Canton Township, there's still room for more development, Rogers said. Other areas, like Van Buren Township, have been slower to take off over the past decade but now show dramatic increases in both housing starts and commercial growth.

That could be further bolstered by new development in southern Canton Township, which Rogers said has much of the land available for new housing.

Despite the growth in housing, retail development and property values, the office and industrial leasing climate in the corridor has experienced a slowdown similar to other markets in the Detroit area and nationally.

With about 4.8 million square feet of office space, the vacancy rate has hovered above 15 percent, said Brendan George, vice president at CB Richard Ellis in Southfield.

George, who specializes in properties west of Detroit, notes that the heart of the corridor - near Haggerty Road and Six Mile Road - is a solid, stable area that should find its footing during the overall recovery. He drew parallels between the region and Auburn Hills, which also witnessed concurrent growth between retail and office development.

In addition, the I-275 corridor is the largest Detroit office market with the quickest access to Ann Arbor, George said, "so with the growth along M-14 and the growth in the Ann Arbor market, there's a lot of businesses between the two areas."

Eventually, George said, western Detroit development could prompt M-14 to become the next growth corridor, with the distance between the Detroit and Ann Arbor markets seeming to shrink.

"The day may come where ... you don't drive on a deserted M-14 to get to Ann Arbor," George said.

Paula Gardner covers real estate for Business Direct Weekly.