DETROIT, MI - Two years ago, Larry and Maureen Allen, empty-nesters from Macomb County, put down a deposit on one of the new condominiums set to rise along the Detroit River just east of downtown. It was a heady time for Detroit. Coming off a rousing Super Bowl XL, downtown was popping with new restaurants, clubs and loft residences. A string of highly touted condo projects promised to create a new Miracle Mile along the riverfront.
Then everything crashed. The Allens' condo project was scrubbed, along with so much else across the country. Amid the ruins, the Allens today still hope to move downtown. But now they're shopping at existing buildings away from the riverfront.
"We wanted to really be on the water, and when we found out they weren't going to be doing anything with it, we got our deposit back, of course, but, yes, it was extremely disappointing for us," Larry Allen, an engineer with Chrysler, said late last month.
The Allens' story illustrates the high hopes and crushing disappointments of downtown's recent revitalization efforts.
Even now, in the midst of the worst economy since the 1930s, downtown still manages a few big wins, like the recent openings of the Westin Book Cadillac and Doubletree Fort Shelby hotels. But those big wins notwithstanding, Detroit's downtown rebound clearly has slipped into neutral for now.
George Jackson, Detroit's chief development officer and president of the Detroit Economic Growth Corp., said the real estate crash should be temporary. He said planning continues on work to resume once the credit crunch eases.
"It's not like people have stopped coming in the door," Jackson said. "We're still having meetings every day with people trying to do things. They feel strongly things are going to turn around, and they're working on their deals."
In the same way, Christopher Leinberger, director of the graduate real estate development program at the University of Michigan, said a national trend toward urban living, especially among young professionals and empty-nesters like the Allens, would contribute to downtown's revival once the recession ends.
"You've got some real fundamental shifts in the marketplace that will benefit downtown, Midtown, the riverfront long term, but we're in a short-term real estate depression. You can't buck that," he said.
As valid as such hopes may be, no one questions that the crash has hurt downtown's comeback in major ways. Almost all the highly touted downtown and riverfront condo projects have stalled or been abandoned, such as the Griswold, which would have seen condos rise atop the Book Cadillac's parking garage, and the 1001 Woodward project, a plan to convert a former bank skyscraper to upscale living.
Then, too, the Cadillac Centre project, a modernistic mixed-use deal for the Monroe Block announced with fanfare by then-Mayor Kwame Kilpatrick in January 2008, became another casualty of the real estate crash. Jackson said that deal is now dead.
Perhaps most disquieting, a question hangs over the hoped-for move to downtown by Quicken Loans. Announced in November 2007 by Quicken founder and chair Dan Gilbert, the move would involve Quicken moving 4,000 employees and its headquarters from Livonia to a downtown site yet to be chosen.
The move has been delayed and downsized. Quicken is still deciding where to go and when. Jackson said Quicken may be looking at renting, not building, headquarters space. And the number of employees likely to move downtown is probably no more than 1,500 now.
Yet other projects have moved ahead. After DTE Energy sold 25 acres of vacant land on its headquarters campus to MGM Grand for its new casino, the utility company took the money and pumped $52 million into a thorough renovation of its campus at Third and Bagley.
The work included a new entrance, the planting of 600 trees and 7,200 shrubs, and the creation of a 26,000-gallon reflecting pool.
"It's a commitment not only to the city, but we really wanted to create an environment where we can attract and retain employees. People's environment affects their productivity," said Richard Carrithers Jr., director of facility optimization for DTE Energy.
The market crash has affected different parts of the downtown market in varied ways. John Ferchill, the Cleveland-based developer who renovated the recently reopened Westin Book Cadillac, said the hotel and its restaurants did spectacular business during the recent North American International Auto Show. But closings on the project's for-sale condominiums have slowed to a crawl because of the worldwide credit crunch.
"There is really no ability to get any kind of loans, or very limited ability to get loans, for purchases of condominiums," Ferchill said, calling the problem "very, very significant."
Frank Taylor, chief executive of the Southern Hospitality Restaurant Group, said sales at his upscale Seldom Blues restaurant in the Renaissance Center have been depressed by the poor economy.
"We've been hurt badly. From this year's auto show, which is typically my biggest week of the entire year, we saw a major down compared to the years before," he said, adding, "People are scared to spend the dollars."
But if upscale dining suffers, more casual - and lower-priced - restaurants like Taylor's Detroit Breakfast House on Woodward Avenue were holding on better. Taylor said his newly opened Detroit Fish Market restaurant downtown has done well.
Many downtowners are looking to the hoped-for construction of a new rapid transit line up Woodward Avenue to enhance the appeal of downtown. Metro Detroit transit czar John Hertel said last month that he expects to propose the structure of a regional transportation authority no later than June and hoped the state Legislature would approve it shortly after.
Phil Cooley, a partner in the successful Slows Bar BQ restaurant on Michigan Avenue near the old Tiger Stadium, said getting mass transit downtown would enhance downtown's appeal to workers and residents who love cities.
"I hate having a car, to be honest," Cooley said last month. "It's definitely one of the biggest factors in determining whether you want to live here or not. Do you really want to be chained to having an insurance payment, car payment and all of that, and frankly the fact that your car windows might get smashed?"
Ann Lang, president and CEO of the civic group Downtown Detroit Partnership, said downtown has more positives than negatives despite the recession and market crash. "We're definitely stalled in some areas," she said. But she added, "We're Detroiters and we ride things through and come out the other side."
Source: Freep.com