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City won't fight veto of Madison-Lenox demolition


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Detroit won't fight veto of Madison-Lenox demolition

By Robert Ankeny

November 01, 2004

The city of Detroit has elected to stay out of a dispute between the Ilitch family through its Ilitch Holdings Inc. and preservationists over the fate of the 100-year-old Madison-Lenox Hotel.

"The ball is in the Ilitches' court on the Madison-Lenox," said Walter Watkins, director of Detroit's Department of Planning and Development.

Two years ago, Detroit's Downtown Development Authority authorized a $700,000 loan to help pay for demolition of the long-empty, eight-story twin buildings at 246 Madison Ave. across from the Detroit Athletic Club.

But last January, the Detroit Historic District Commission refused to approve demolition of the buildings. That stalled plans to raze the buildings for a parking lot until the site could be developed.

Watkins said the city administration has decided not to challenge the commission's veto on demolition of the hotel complex.

"It's now up to the Ilitches to bring forward a plan of what to do with the buildings that is satisfactory to the commission," Watkins said.

Last May, the National Trust for Historic Preservation placed the Madison-Lenox on its annual list of most-endangered historic places in America.

"We are actively exploring alternatives for the Madison-Lenox," said John Hahn, senior director of communications for Ilitch Holdings, "with the goal of continuing to move forward with the renaissance of downtown Detroit.

"As part of this process, we have talked with a number of developers and restoration experts to determine the best use of the property. We are continuing to assess all options, but at this time, no final decisions have been made."

Brian Giles, a Chicago condominium developer with Detroit roots, has expressed an interest in redeveloping the Madison-Lenox.

He is currently a co-developer in Park Shelton L.P., the $15 million renovation of the 12-story, 220-unit apartment building on Woodward Avenue at Kirby Avenue.

Peter Wemzler, broker with Southfield-based Marcus & Millchap Real Estate Investment Brokerage Co., met with Ilitch officials last spring on behalf of Kathleen Sinclair, CEO of Birmingham-based Executive Recruiters International.

Sinclair also is planning a 10-story riverfront marina with 39 boat slips and 56 condominium units, which is awaiting final approval in Trenton. Downriver Development L.L.C. should soon close on the purchase of the 1-acre site at the foot of West Road opposite Grosse Ile. If construction starts by the end of the year, the $20 million complex could be completed in about 18 months, Sinclair said.

Wemzler said Ilitch Holdings executives Robert Carr, general counsel, and Michael Healy, property manager, said 47 unsolicited proposals for the Madison-Lenox had been presented.

Sinclair, who proposed a $24 million renovation of the Madison-Lenox last spring, said she fears that unless there is action soon, demolition will be the only option before Super Bowl XL.

Her proposal calls for restoration of the two existing eight-story towers, with addition of a third tower with automated valet parking on a vacant lot to the west.

Sinclair presented her conceptual plan, prepared by architect Robert Ziegelman of Ann Arbor-based Luckenbach and Ziegelman, on May 28.

Wemzler, who helped Sinclair assemble the proposal and develop a cost model study using several local construction companies, said Ilitch officials told them it was one of two proposals being given serious consideration.

"It is a good use of an historical property as it stands, it makes common sense," Wemzler said. "Having a restaurant on the ground floor is a natural," he said.

He said financing would come from private-equity investment, "with outside players, including perhaps the Ilitches" to contribute and to share benefits in proportion to their equity.

"We certainly would apply for local and state incentives, such as tax abatements and historic tax credits, and make full use of those incentives," Wemzler said.

He also said the project also would ask the Ilitches and the city whether the DDA could shift the $700,000 demolition loan to the project.

Robert Ankeny: (313) 446-0404, [email protected]

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Ilitches could return to hero status

By Mary Kramer

November 01, 2004

Mike and Marian Ilitch were heroes when they led one of the first major investments in downtown historical preservation in the late 1980s. By moving Little Caesar Enterprises Inc. from Farmington Hills to offices in the Fox Theatre, the Ilitches took a gamble, but it appears to be paying off.

In addition to the popular Fox, their growing entertainment enterprise includes several restaurants and bars, a smaller theater and parking lots and decks that benefit from crowds attending games of the Ilitch-owned Detroit Tigers.

Now they have a chance to be heroes again.

Almost 50 offers to negotiate a plan to revive the vacant Ilitch-owned Madison-Lenox hotel have come to the Ilitches since their plans to raze the connected buildings for a parking lot were made public a couple of years ago.

As Bob Ankeny reports on Page 37, the city's historic district commission wouldn't sign off on the razing, and now the city's top economic officer says the city won't challenge that ruling.

So why not come up with a plan to redevelop the buildings?

The Madison-Lenox, clearly an eyesore in its current state, has made the "most endangered" list compiled by the National Trust for Historic Preservation.

The trust's president, Richard Moe, visited Detroit last month and spoke to an enthusiastic group of downtown boosters, developers and preservationists in a breakfast forum at the Gem Theatre.

Moe described the Madison-Lenox as "shabby but salvageable." And he described the kinds of tax breaks available to those who tackle the difficult chore of coming up with a business plan for a historic rehabilitation project.

Downtown is beginning to show the fruits of such investments. Multiple loft projects along Woodward Avenue and the Kales Building on Grand Circus Park may inspire others to tackle projects. Lord knows downtown Detroit has a wealth of empty buildings to work with.

So there are plenty of carrots to work with; perhaps what's needed are a couple of sticks for the owners who hang on to properties without investing in them or improving them.

In the case of the Ilitches, they hold a number of contracts with the city for concessions and managing city-owned facilities. Surely if the city wanted the Madison-Lenox renovated, it could find some leverage to make those wishes known. A plan to make the buildings into something new would also take some of the sting out of a hockeyless season.

It's a chance to be heroes all over again by adding character to downtown instead of ubiquitous parking spaces.

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Yeah, this sounds encouraging, but I am not holding my breath. If the Ilitches don't redevelop the M-L, it will be a scar on their reputation, given how much publicity this has gotten. If that doesn't encourage them to redevelop the building, I don't know what will. I'm hoping that the $700,000 loan they got from the DDA for the demolition can be used towards its renovation. The fact that they received 47 development proposals surprises me. I never would've guessed that there would be that many. All in all, I am cautiously optimistic about this one.

Now if we could just get something done with the United Artists. The theater seems too far gone to save, but there doesn't seem to be any reason why the office building portion cannot be redeveloped. In fact, when Ilitch purchased the building, the building was in good enough condition to be rented out to tenants. The Detroit Building would make a nice little apartment building, but that building is not in good shape either. Although unlike the Madison-Lenox, at least the Detroit Building has windows.

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