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Michigan Economic Development Corporation
Executive Committee Retreat
Mayor John B. O’Reilly, Jr. City of Dearborn, Michigan
July 11, 2017
Project Summaries
● REDICO Dearborn Town Center -
East Downtown, $70 Million ● Ford Land Wagner Place – West
Downtown, $85 Million
Transformational Projects
REDICO DearbornTown Center
The Town Center project is a transformationalmixed-use development in the core of Dearborn’sEast Downtown District. Located at the 100%commercial corner of Michigan Ave. and SchaeferRoad, this project replaced the department storeicon of the former Montgomery Ward departmentstore that had previously occupied the site fornearly a century.
After ten long years of the store sitting vacant, theCity had purchased the site and advertised it fordevelopment in 2007. REDICO was selected as thepreferred developer and proposed a three partproject consisting of a Medical Office Building,Independent Senior Housing and a retail/office orhousing building. The City would build a parkingdeck to support the project and would useBrownfield financing to fund the parking deck.
The Michigan Economic Development Corporationstepped up to partner with the City and Developerto approve a brownfield plan that helped clean uppetroleum contamination on the site and contributeto the development of the 525 space parking deck.The project received a $9 million MichiganBusiness Tax (MBT) Credit plus the school tax
capture contribution. This made the project feasibleand increased the development density on this siteby 400%. The East Dearborn DDA committed itstax increment capture to funding the parking deck.
The first phase of the project including the medicalbuilding and parking deck was completed in 2010with a total investment of $50 million. The secondphase of senior housing at $16 million is scheduledto break ground in the fall of 2017 and the thirdphase of $4 million in the spring of 2018 for aproject total of $70 million. This project changed theface of the East Downtown District and set thestage for additional new investment going forward.
Wagner Place
Perhaps the single most transformative downtownDearborn redevelopment efforts in recent history isthe Wagner Place mixed-use project in the WestDowntown District. This project represents theessence of placemaking to create an interesting,attractive and walkable downtown via acquisition ofnearly two blocks of the core district. The City issupporting the development by constructing aparking deck and the MEDC is a key partner inassuring the financing for the project throughbrownfield and Strategic Fund participation.
Ford Motor Company undertook this project as aportion of their massive repositioning of theircorporate facilities via the Dearborn CampusTransformation (DCT) effort. This is a ten yearmakeover of their many headquarters and researchfacilities into two modern campuses that will house
the Research and Engineering skill teams and theheadquarters executive teams. Ford, Ford Landand the City discussed the ongoing redevelopmentof the Downtown Districts and the potentialsynergies of having some Ford team memberslocated in the downtown where food andentertainment merge with the workplace of thefuture to attract young and capable talent. Ford sawgreat value in this approach as they competeglobally for the best and brightest to help themachieve their mission as a mobility company for the21st Century.
Wagner Place is under construction today with agrand opening anticipated in the summer of 2018.Two new buildings on Michigan Avenue totaling150,000 square feet on three floors will house50,000 square feet of retail and restaurant uses on
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the first floor, plus 100,000 of office space above for a600 person Ford research skill team. An expandableparking deck is underway on the block adjacent, with373 spaces in the first phase and another 200 possiblein the future which boosts the public parking system to2,500 spaces for the district. Ford Land and the City arealso working on streetscapes, utility relocations, afestival street and urban park space to createprogrammable special event venues to activate thedistrict with amenities like the farmers market, concertsin the park, art fairs and food/cultural activities.
This project has been financed with an investment of$60 million by Ford Motor Company/Ford Land, $15million by the City of Dearborn and approximately $10million by the MEDC through school tax capture andStrategic Fund participation. The project total value is$85 million and is a prime example of how placemakingcan take shape through the combined efforts of acommitted public-private partnership.
Pictured left to right: Doug Van Noord (Ford Land); Dave Dubensky (Ford Land); Governor Rick Snyder; Mayor Jack B. O'Reilly, Jr.
● Union at Dearborn UM-D Student Housing – Fairlane Town Center, $30 Million
● Hampton Inn – West Downtown, $9 Million
● Beech Street Medical Office, $3 Million ● Artspace City Hall Lofts – East
Downtown, $16 Million ● Habitat Housing – 12 Units, East
Neighborhoods
Other Catalytic Projects
Union at DearbornUM-D Student Housing
The University of Michigan – Dearborn was thelast of the State’s 15 public universities to addstudent housing, as it had always served acommuter population. However, in 2008 UM-Dcompleted a Market Study indicating there wassubstantial demand and growth potential for theDearborn campus if student housing could beadded. A project concept was developed and adevelopment partner identified. UrbCam Housingentered into a Memorandum of Understanding(MOU) with UM-D and the project moved forward.
An interesting site was identified at the FairlaneTown Center regional shopping mall directly acrossEvergreen Road from the UM-D Main Campus. Thissite had once been used for retail stores, later wasconverted into Ford Motor Company research labsand now was being proposed for student housing.Two buildings on the site were converted into astudent center and apartments, and new buildingswere added to provide a total of 600 beds in studio,one bedroom and two, three and four bedroom suites.
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The City also partnered on this project and engagedthe MEDC, who was also willing to participate. Thepro jec t was p rov ided Obso le te P rope r t yRehabilitation Act (OPRA) assistance and brownfieldassistance to help bridge the gap between projectcosts and other available financing. UM-D preferredthe public-private partnership approach to reserve itsother scarce resources to improve its academicfacilities while lending its support to the studenthousing in the form of marketing, admissions,transportation and some leasing of classroom andadministrative space in the commons building. Theproject proved to be a win-win for all the participatingpartners.
Subsequent to its original opening at 505 beds andthe first expansion of 99 beds bringing the total to604, the Union at Dearborn has worked with UM-D,the City and MDOT to add a non-motorizedconnector to the Dearborn campuses and the Unionproperty, linking all of the UM-D facilities to theRouge River Gateway Trail and Dearborn’s WestDowntown District. Future phases of student housing are in the planning stages and can be added toseveral sites including: 1) the Union site; 2) the Bradyand Michigan site across from the new DingellTransit Center; and, 3) in the heart of the WestDowntown as part of the City and UniversityPlacemaking strategy.
Hampton Inn
In 2014, a property that had been sitting vacant fora decade was identified for redevelopment as anew downtown hotel. The Hampton flag hadtemporarily departed Dearborn several years earlierand had been proposed at other new locationsbefore settling in the West Downtown District. Thisproject was viewed very favorably by the City andour partners at the MEDC as strong evidence thatthe economic recession that had so rapidly stalleddowntown development was over and a new waveof investment interest had emerged.
This property had been a Bally’s Fitness Club formany years until that facility moved to the FairlaneTown Center. Subsequently, it sat vacant as adowntown eyesore. It was contemplated fordevelopment on various occasions, but itscomplexities as a structure, swimming pool andproximity to a sensitive adjacent computing centerfor Oakwood (now Beaumont) Hospital repeatedlydiminished interest.
The new approach was a partnership with thedeveloper, the City and the MEDC to bringbrownfield financing to the project to cope with theeffects of obsolescence on the developmentpotential for this site. Once the gap betweensignificant demolition and site preparation costswas bridged, the project could follow a moretraditional financing approach to implementation.The Hampton was constructed and has becomeone of Dearborn’s most attractive and convenientvisitor destinations.
It enjoys a mixed population of business travelerscoming to Dearborn for their connections with Ford,Beaumont, AK Steel and many of our nearly 4,000business entities, combined with tourists coming tothe Henry Ford, Michigan’s largest tourist attractionbringing nearly 2 million visitors per year toDearborn. The new downtown Hampton ispositioned to serve the community successfully formany years to come.
Beech Street Medical Office
This project is a textbook example of how the localpartnership fostered through the DownriverCommunity Conference – Brownfield Consortium(DCC-BC) moved a contaminated site from vacantto redeveloped in short order. The site at 22038Beech Street, near the West Downtown District,was a light industrial plating operation for fortyyears prior to 1990. Following its closure, there wasfear of contamination that prevented developerinterest for another decade. The private sectorwouldn’t even invest its resources to determine thesite conditions. It was an eyesore and detractionfrom one of Dearborn’s most historic and invitingsurrounding neighborhoods.
As one of the first projects undertaken by thefledgling DCC-BC during its pilot project stage, U.S.Environmental Protection Agency (USEPA) fundswere allocated to the City of Dearborn to undertakethe necessary analyses to determine the siteconditions at this former industrial site. Much to thesurprise of all involved, only minimal contaminationwas discovered and the site was remediated at anominal cost.
Based on the facts of the environmentalinvestigation, a developer quickly purchased theproperty with plans to develop a new medical officebuilding. The value of the site increased from
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$114,000 to $2.6 million with the new developmentthereby increasing tax revenues for various taxingauthorities.
The site redevelopment was consistent with thepredominant land use in the surrounding area andcomplemen ta ry to the ad jacen t res iden t ia lneighborhoods. An eyesore was replaced with anattractive, productive facility that served as a catalyst foradditional medical office redevelopment along theMonroe corridor. The public investment in resolvingenvironmental issues opened the door for a desirableprivate investment that wouldn’t have otherwiseoccurred. The DCC-BC has been instrumental over thelast two decades in assisting the City of Dearborn inevaluating and preparing brownfield sites forredevelopment. Their assistance has led to multiplepartnership projects between the City, the MEDC andprivate developers that have transformed Dearborn’sdowntown and industrial districts.
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Artspace City Hall Lofts
This project emerged from the perfect storm ofeconomic recession, opportunity and desire toresult in one of the best success stories inDearborn’s downtown development history. Aproject that reinforced East Dearborn’s commitmentto Arts and Culture happened largely because of acall from Mayor O’Reilly to Artspace launched avision and process that built momentum fromseveral committed partners.
In 2009, the Mayor contacted Artspace to see ifthey would be interested in considering Dearbornfor one of their highly sought after affordable artistlive-work loft projects. They came to town anddescribed a detailed and comprehensive processfor serious consideration. The East Dearborn DDAaccepted the challenge and worked over the nextseveral years to complete the 7 steps to Artspace.
Simultaneously, and interestingly, the City had beenseeking a new option to house its offices, but would neverleave the historic campus at Michigan and Schaefer vacant.As the Artspace team was beginning to evaluate candidatesites, another office building became available to the Citythat could serve as its new Administrative Center. Due to therecession and glut of office space, the building becameavailable at an attractive price, so the City inquired to see ifArtspace would consider the former City Hall for its center inDearborn. Artspace jumped at the chance and wasenthusiastic about converting a City Hall to artist lofts andthe rest is history.
Artspace and the City partnered to apply for Low IncomeHousing Tax Credit (LIHTC) financing assistance fromMSHDA, $500,000 from the City’s HOME consortia fund,and a $1 million grant awarded to Artspace from theMichigan Strategic Fund to help with the Commercial portionof the project. Multiple other contributions from partnersincluding the Ford Foundation, Kresge Foundation and AKSteel helped the project reach its funding goal of $16 million.The lofts were completed in 2016 and are fully occupied with53 artists and their families. The commercial space buildoutwill be completed for occupancy in 2017 and provides25,000 square feet of flexible space for galleries, restaurantand related uses.
Habitat for Humanity
In 2012, the City of Dearborn teamed up withHabitat Detroit to build a dozen new infill homes inexisting neighborhoods. The City provided availablesmall (30’ wide) vacant lots, combined to createmodern 60’ lots to accommodate ranch stylehomes. This would illustrate the point that updatingviable neighborhoods with new housing types waspossible through creative partnerships.
Two east Dearborn neighborhoods were selectedwhere the City had demolished substandardhousing over time and had the adjacent propertiesavailable to create the desired lots. Five newhomes were built on Neckel Street, one on MapleStreet and six more on Hartwell Street. The City
worked with Habitat to add amenities to thesehomes that would make them more attractive andfunctional including brick façade, two car garages,full basements with a basement bath, providingmore usable family space. The properties weremarketed to two specific groups, veterans andbattered persons.
Funding for this project came from the HomeConsortia of Wayne County, HUD NeighborhoodStabilization 3 funds, and Habitat for HumanityDetroit resources. The City contributed the land,and various volunteer crews built the homes alongwith the future homeowners and their sweat equity.
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● Ongoing DowntownDevelopment Investment
● Warren Avenue CorridorAuthority
● Dix-Vernor Corridor Authority
Future Partnership Opportunities
Corridor AuthoritiesWarren and Dix-Vernor
and offerings. In the case of Warren Ave. theneighborhood merchant model was re-invigoratedand a unique blend of authentic Middle Easterninspired stores and restaurants emerged.
Today, about half of the available properties in theWarren corridor have been redeveloped throughthe local entrepreneurial spirit. These includerestaurants, specialty stores and one-of-a-kindshops that bring global culture to our local market.With the addition of the Warren Avenue BusinessImprovement District (corridor authority), ourrecently created board is aggressively addressingthe corridor brand, image, streetscape, parking,
Utilizing Public Act 280 of 2005,the City of Dearborn establishedtwo Corridor Authorities in 2015to support districts of greati m p o r t a n c e t o t h e C i t y ’ scommercial mix and long-termsustainability strategy for thefuture. Warren Avenue is acorridor of three miles stretchingfrom Wyoming on the east toGreenfield Avenue on the west.Dix-Vernor is a small commercialcenter in Dearborn’s SouthsideDistrict, which has served as thega te wa y t o D ea rb o rn f o rthousands of immigrants seekinga better life in America at Henry Ford’s RougeComplex. Together, these districts provideoppor tuni t ies for mul t ip le redevelopmentpartnerships with Wayne County and the MEDC toassist local entrepreneurs in realizing theirAmerican Dream.
The Warren Corridor is a success story in its ownright as it was adopted by a creative and innovativegroup of Lebanese Americans to revitalize aflagging commercial corridor. As happened in manyplaces in America, these historic corridors were thecore of neighborhood shopping and becameobsolete over decades of change in retail habits
Warren Avenue Corridor Authority
Dix-Vernor Corridor Authority
Dix Avenue Streetscape Improvements
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maintenance and development issues. Warren Avenue iswell on its way to taking its place along with the East andWest Downtown Development Authorities, as one ofDearborn’s special commercial zones.
The Dix-Vernor Corridor Authority is a district formedaround the intersection of Dix and Vernor Avenues, twomajor County arterials that connect Southeast Dearbornand Southwest Detroit. This District has been home toimmigrants from across the globe who could live in Dix-Vernor and walk to the Ford Rouge Plant. Today it islargely populated with Yemini immigrants who haveadopted this area as their permanent home.
This District has an eclectic mix of businesses rangingfrom the very large, like Dearborn Sausage, to the smallmeat and produce shop owners that serve the localpopulation. It has great potential to infill both additionalcommercia l and res ident ia l development andopportunities for recreation and cultural amenities as well.The linkages to Southwest Detroit are another importantasset bringing Latino and Middle Eastern populationstogether as part of that rich cultural tapestry that isDearborn. The Dix-Vernor (Southside) Corridor AuthorityBoard is working hard on its initial priorities to present itsunique character through an immigrant-orientedmarketplace and integrated social institutions against aheavy industrial backdrop.
Warren Corridor: Esper Library; ShatilaBakery; Dix-Vernor: Dearborn Sausage;American Moslem Society (top to bottom)
