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Dive Brief:
- The city of Detroit and private developers are reducing the construction schedule for the $1.5 billion Detroit District mixed-use project, according to local media reports.
- The city of Detroit and private developers Related Cos. and Olympia Development of Michigan partnered on the project, which was supposed to break ground last summer. The “resequencing” is due to the current lending environment for office projects, Andrew Cantor, executive vice president of development at Related Cos. he told the Detroit Free Press.
- The development will eventually encompass a total of 10 properties, they said Detroit Borough website. Six of the buildings will be constructed, while four buildings will be reviewed for adaptive reuse. In total, it will host 695 mixed-income residential units, 1.2 million square feet of commercial office space, 100,000 square feet of retail and 400 hotel rooms.
Diving knowledge:
The development has until March 28, 2025, to break ground on at least one of the planned projects based on a $615 million tax incentive known as a transformational Brownfield, a spokesman for the Detroit Economic Growth Corp. told the Free Press.
“We continue to work to advance our projects in the Detroit district, consistent with the timeline of the transformational Brownfield plan,” the development companies told the Free Press in a joint statement on March 12.
The commercial office building environment has been tough for builders across the country: In February, the Dodge Momentum Index, a benchmark that measures nonresidential construction planning, dropped 1, 4% on the back of a weak office sector. Commercial planning, which includes office construction, fell 2.3%, while institutional planning rose 0.1%.
The city also has a painful housing history, exacerbated by the 2008 financial crisis that left the Motor City reeling. Between 2005 and 2015, Detroit had more foreclosed homes than the total number of homes in all of Buffalo, New York, in Detroit News reported. But more recently, a strong hotel and apartment market in downtown Detroit has spurred more development.
