$1.5B Detroit mixed-use project delayed


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Dive Brief:

  • The city of Detroit and private developers are pushing back the construction timeline on the $1.5 billion District Detroit mixed-use project, according to local media reports.
  • The city of Detroit and private developers the 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, the Related Cos. executive vice president of development, told the Detroit Free Press.
  • The development will eventually encompass a total of 10 properties, according to District Detroit’s website. Six of the buildings will be constructed, while four buildings will be overhauled for adaptive reuse. Altogether, it will host 695 mixed-income residential units, 1.2 million square feet of commercial office, 100,000 square feet of retail and 400 hotel rooms.

Dive Insight:

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 spokesperson for the Detroit Economic Growth Corp. told the Free Press.

“We remain hard at work to move our projects forward in The District Detroit, in line with the Transformational Brownfield plan timeline,” the development firms told the Free Press in a joint statement on March 12.

The commercial office-building environment has been rough for builders across the country — in February, the Dodge Momentum Index, a benchmark that measures nonresidential construction planning, dipped 1.4% on the back of a weak office sector. Commercial planning, which includes office construction, fell 2.3%, while institutional planning ticked up 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 homes foreclosed on than the total number of houses in all of Buffalo, New York, the Detroit News reported. But more recently, a strong market for hotels and apartments in downtown Detroit has spurred more development.



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