New Tower to Rise on Kennedy Block

[Allan]

It will be interesting to see how all this plays out. The article seems to raise more questions than answers.

Visteon near office deal downtown

Tower is proposed at Campus Martius

December 18, 2004

BY JOHN GALLAGHER

FREE PRESS BUSINESS WRITER

Auto parts supplier Visteon Corp. is negotiating to become the lead tenant in a new office tower to rise in downtown Detroit on the site of historic Campus Martius near the new Compuware Corp. headquarters.

If the deal, apparently nearing completion, comes to fruition, it would mark another major addition to a downtown that has recently seen completion for Compuware, Campus Martius Park, loft apartments, restaurants and shops.

Tentative plans call for a building of 10 to 15 stories with 250,000 to 300,000 square feet of office space. No cost estimate was available, nor could it be determined when construction might begin.

Word of the project involving Visteon, a financially troubled supplier that just opened its new Visteon Village headquarters campus in Van Buren Township, leaked out unexpectedly Friday. Detroit Mayor Kwame Kilpatrick hinted Friday morning during the dedication of the new General Motors riverside plaza near the Renaissance Center that a major announcement was coming next week.

Real estate insiders, speaking on condition they not be named, confirmed that the deal involved Visteon and a new tower.

Redico, a Southfield-based real estate firm, would develop the project. Redico officials could not be reached for comment Friday.

The mayor told a meeting of development professionals earlier this week that the new tenant, whom he did not name, would bring about 600 new jobs downtown, according to one person who was in the meeting. Most such projects also are designed to attract at least one retail tenant and possibly other office tenants, with shops and other services.

Kilpatrick has often tipped off listeners about pending announcements that then were delayed. Some real estate insiders said they weren't expecting the Visteon announcement until January. But real estate insiders insisted Friday that the deal appears real.

George Jackson, president of the Detroit Economic Growth Corp., who negotiates such deals on behalf of the city, could not be reached for comment Friday.

Presumably the tower would be financed by Redico, which would arrange construction loans along with some incentives from the city, with Visteon paying rent on a long-term lease.

The tower would be built on the old Kennedy Square, between Woodward and Griswold in the heart of downtown, which once was part of Campus Martius, where City Hall stood for nearly a century until it was razed in 1961. The Kennedy site later became an underground garage with a seldom-used park on the surface. Over the past two decades, the location has been the focus of numerous talks in development circles as a possible site for a new building.

Coming after last year's opening of the Compuware headquarters and the recent openings of Campus Martius Park and various restaurants, shops and other amenities, a new office tower could reinforce the image that Kilpatrick wants to project of a city on the comeback.

"It's another positive sign for the city," agreed Steve Morris, an office broker with the Southfield-based firm GVA Strategis. He predicted that the move would be good news for the budding retail and residential markets downtown.

But if the deal would be a boost for downtown, it raises interesting questions. The downtown office market suffers from significant vacancy, and some office brokers and investors said Friday that another new building might add to the overhang of available space.

Then, too, Visteon just this fall has been consolidating its employees from several locations into its new Visteon Village headquarters. With the paint barely dry there, it was unclear why the company would want to commit to yet more new space somewhere else.

Moreover, Visteon, like many automotive firms, faces significant financial challenges. It just announced to its 8,300 white-collar employees that it would be offering buyouts by the end of the year.

For the third quarter that ended Sept. 30, Visteon posted a net loss of $1.36 billion, or $10.86 a share, on revenues of $4.15 billion. Suppliers such as Visteon are being squeezed as automakers continue to pare their business.

Visteon has 3,000 employees in its Van Buren Township headquarters and 71,000 worldwide.

Contact JOHN GALLAGHER at 313-222-5173 or [email protected]

[Allan]

Keeping in mind that this is Detroit, I won't really believe any of this until I see steel rising on the site. Here are the best photos I could find of the block right now. I will be so happy to finally see something going up on this block. It's been vacant for more than 40 years now!

[Aaron]

!!!

!!!

Holy crap. I hope this is true, it'd be a miracle for density and bringing a lot more buzz downtown.

[Allan]

Yep. This means more density, more retail, more people, and more of an incentive for other downtown investments. Downtown development finally seems to gaining momentum. Dare I say that the renaissance has begun?

[Mojo]

It's about time Visteon got it's ass downtown. Now for Lear corp, Denso, and the rest of the suppliers. It's good to see more jobs coming to the city, especially those for us tech types.

[Allan]

I really didn't think Visteon would even consider moving downtown. This gives me new hope that some other companies will move downtown.

With the Lafayette Building, 600 Woodward, Free Press, Book Cadillac, Pick Fort Shelby, and possible sale of the Broderick...wow! Not to mention that there is a developer interested in the Statler (outside chance of that happening, but you never know). Apparently the Lafayette is a go. The city has a developer lined up and everything. I've been waiting for an announcement on that one for a while. The Book Cadillac is supposedly ready to go again. I'm not sure what the hold up is now. Garrison Co. is doing 600 Woodward after they finish the Carlton Hotel and Hotel Eddystone. So those three downtown developments look like they are the ones most likely to happen soon.

What about the old People's Outfitting Company? That building is overlooked so often. Will it ever become anything?

[baldy]

Why not the monroe block instead of the Kennedy block? Personally, I would prefer the kennedy block stay a grass lot until the rest of downtown gets taken care of (never). For one, the grass area really compliments the c-mart. Two, don't block the dime building. The only hole so to speak around the c-mart is the monroe block and this building would be perfect for that block.

[Allan]

The Monroe Block is too big for the size of building Visteon wants. They are only looking at 250,000-300,000 square feet. If you put it on the Monroe Block it would be what, 2 floors?

I share your concern about blocking the view of the Dime. Just as long as the building isn't too tall, it should be ok. Visteon is only looking at moving 600 employees downtown.

The office market downtown is very weak. The Penobscot is 20% occupied. David Stott is only occupied on floors 16-32. One Woodward's occupancy rate is probably about 50 or 60%. The Guardian's occupancy is up to 65% now. Downtown cannot support more office space. I'm looking for this to be mixed use. One floor of retail, a few floors of Visteon offices, and a few floors of apartments or condos.

[wolverine]

This is so exciting. It's great that there will be more jobs downtown. Once things start gaining momentum, Detroit is going to take off.

[Allan]

Visteon looks for new home for tech contractors; no deal done

By Terry Kosdrosky

Dec. 20, 2004 11:47 AM

Visteon Corp. is looking for a new home for about 500 outside information-technology contractors but hasn

[Allan]

Proposed Detroit office tower could house 1,200 workers

Visteon is reported to be looking at leasing space, but suburbs are an option.

By R.J. King / The Detroit News

DETROIT -- A Southfield developer is proposing to build a 10-story office tower at the Kennedy Square block in Detroit's Campus Martius district that could accommodate 1,200 workers.Auto supplier Visteon Corp. is reportedly looking at leasing space in the proposed office tower for a group of 500 information technology staff, but a spokesman said the company is still weighing several options.

"We are looking at a multitenant building opportunity in downtown Detroit, but we are also looking at the suburbs," said Jim Fisher, Visteon's director of corporate communications.

The Kennedy Square block at Woodward and Michigan, and an underground parking deck, are owned by the city of Detroit.

The proposed 240,000-square-foot, glass structure would be the first major office tower built in downtown Detroit since Compuware Corp. opened a $325-million, 4,000-employee headquarters in February 2003 on Monroe between Woodward and Randolph.

The new office building would be developed by Southfield-based Redico and take two years to complete, said Dale Watchowski, Redico's CEO.

A preliminary presentation has been made to city officials, but no leases have been signed for the project.

"What we see in the Kennedy Square block is an excellent location overlooking a world-class park in a city that is making great improvements," he said.The city's emerging Campus Martius district includes five city parcels and a recently completed 1.6-acre park at Woodward and Monroe.

Two of the five Campus Martius parcels were bought by Compuware. The Kennedy Square block and another Campus Martius parcel known as the Hudson's block, located at Woodward and Gratiot, were designated as state renaissance zones two years ago to attract development. The designation means most taxes are waived for businesses or residences occupying the site for a period of up to 12 years.

George W. Jackson Jr., president and CEO of Detroit Economic Growth Corp., a nonprofit development agency in Detroit, said he reviewed the REDICO office building proposal but declined to talk about any specific tenants.

"We have seen the REDICO proposal, but we are actively marketing all three of the vacant Campus Martius sites," Jackson said. Watchowski would not say which companies are interested in leasing space.

Visteon, which recently completed a new headquarters in Van Buren Township, said it has no timetable for finalizing a site for its IT support team. The group has between 25 and 50 Visteon workers, with the rest of the roughly 450 workers employed by firms like IBM.

Under terms of the deal signed two years ago, Visteon agreed to relocate the various IT groups in one facility, Fisher said. The group is spread out in several areas, including Dearborn. Other potential tenants for the proposed Kennedy Square building include law firm Clark Hill and Ernst & Young., a large accounting firm. Both firms lease space in One Detroit Centre at Woodward and Congress, and their leases expire in 2006.

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

[SNWEB]

They sure are going crazy over this when it hasn't been finalized yet!

[Allan]

They sure are going crazy over this when it hasn't been finalized yet!

<{POST_SNAPBACK}>

Yeah...the Detroit newspapers always go crazy over stuff like this. Remember the Central United Methodist tower? The Metropolitan Building? The Pick Fort Shelby? The list goes on and on.

[wolverine]

The Detroit newspapers will go crazy over a stupid gas station going up.

_________ street to become a bustling shopping district once again!!!!

Whereas Ann Arbor will get a 10 story building going up, and it will be mentioned in some side column in the A2 news, only to never be mentioned again. And we're a small city! C'mon Detroit!!!

I really hope this happens, although I'm sure the tenants in the Dime Building will be unhappy to lose their view of CM.

[RustTown]

You don't say. You're resurrecting some pretty old threads, here. This is coming up on three years of age. lol

[hudkina]

Hey, 3 years wasn't that bad from announcement to completion...

[wolverine]

Less than that actually. This was indeed a very fast project.. especially the construction.

[TheDetroitCity99]

Does anyone have a picture of this building. Not sure which one it is.

[wolverine]

I only have a black and white photo, I'm sure someone has one in color.

It's the structure just below the checkered one.

[hudkina]

It's the green "Ernst & Young" building in Campus Martius.

[TheDetroitCity99]

Oh haha how stupid of me. I love that building, we need more residential building such as this Downtown as soon as all the abondoned buildings are renovated. I would be really proud to show relatives I live in a tall modern,glass building in Downtown Detroit.

[resourcefulidiot]

It's not a residential building, its office

[hudkina]

I still don't understand why they haven't been able to attract retail tenants to the first floor. It seems like that is one of the most prime spots for retail in the downtown area.

[TheDetroitCity99]

It's not a residential building, its office