A $100 million effort to restore the Fisher Building and redevelop the nearby Albert Kahn Building in Detroit is underway.
The buildings, which were purchased last year at auction for $12.2 million along with a pair of parking decks with more than 2,000 parking spaces, are among the largest redevelopment efforts in the greater downtown core in the works.
Plans call for turning the Albert Kahn Building, which is only about 20 percent occupied, into 162 apartments on the third through 11th floors, keeping office space on the second floor and using the first floor and concourse area as retail space, said Dietrich Knoer, principal of Detroit-based The Platform LLC along with developer Peter Cummings, one of the owners of the buildings.
Construction is expected to begin on the Albert Kahn Building in the third or fourth quarter next year and take 15-18 months to complete, Knoer said.
The other owners are New York City-based HFZ Capital Partners and New York City-based Rheal Capital Management, which is owned by Detroit native John Rhea. Southfield-based Redico LLC was part of the four-headed investment group that purchased the buildings last summer but it sold off its ownership interest.
Perhaps the largest challenge, though, is the restoration of the Fisher Building, one of the city’s architectural masterpieces that is just about 60 percent occupied. The Fisher has 635,000 square feet, while the Albert Kahn has 290,000.
Exterior work on the building’s marble, plus work on interior painting and fresco restoration in the building’s arcade, began this fall, according to a news release.
“It is more than just a beautiful building or a landmark; it is a beacon in the heart of Detroit for all of Detroit. It is the beacon of our city, both of its past and its future,” Cummings said in the release.
“We cannot revitalize New Center without reanimating and revitalizing the Fisher Building,” Knoer said in a Tuesday morning interview. “We are looking at a variety of uses. The building already has retail, entertainment with the Fisher Theater, parking, office.”
Knoer said the projects are expected to be financed using a mix of debt, equity and federal historic tax credits.
“Peter and Dietrich are the right people with the right vision for those particular properties,” said Richard Broder, principal of the Birmingham-based development company Broder & Sachse Real Estate Services Inc. “Not only do they know what they are doing, period, but they also know what they are doing with these landmark buildings, architecturally and geographically. I think they are the right guys. Is New Center the up and comer? For sure it is. It is in the path. There is no question about it. Do I think 160 more units in the marketplace will work? I do. I think we need a lot more than that.”
The Royal Oak office of JLL (formerly Jones Lang LaSalle) is responsible for leasing the Fisher Building office space to tenants. Bloomfield Hills-based CC Consulting is handling the retail leasing.
Separately, The Platform has about $250 million in mixed-use projects in the works that the company says will bring about 1,000 apartments and 100,000 to 150,000 square feet of retail space to the market in Midtown, New Center and around TechTown.
The projects include the 231-unit Third and Grand, a $53 million project under construction next to the Fisher Building, and Baltimore Station, a $40 million plan to put 160-170 apartments at Woodward Avenue and Baltimore Street.
There is also the planned redevelopment of an Albert Kahn-designed building at Cass Avenue and York Street that used to be a Cadillac sales and service building and house Wayne State University criminal justice classes. About 80 residential units and other uses are planned for the 147,500-square-foot building.
The Platform has also been investing in northwest Detroit, the Islandview area near Belle Isle and near the University of Detroit Mercy.