10 years after Detroit bankruptcy properties are seeing development again
The Residence at Water Square
A new skyscraper apartment building, renovated parking garages and a more walkable riverfront space are among the active projects on properties Detroit ceded to creditors in the settlement of the city’s bankruptcy.
The city settled more than $1.4 billion in troubled pension debts with New York-based Financial Guaranty Insurance Co. (FGIC) and Bermuda bond insurer Syncora Guarantee Inc.
The process resulted in FGIC gaining control of the redevelopment of the former Joe Louis Arena site on prime riverfront real estate, while Syncora also received development rights to riverfront properties and lucrative leases like for the Windsor-Detroit Tunnel. Local developers, however, have since brought the properties under their control.
Now that they have, construction has risen, beautification and site preparation are underway and some sites have reopened to the public.
The development at the Joe Louis (Arena) site may have taken longer than expected, but is a very beneficial outcome and looks like a positive outcome in the long-term.
Joe Louis Arena site
The city-funded demolition completed in 2020 of Joe Louis Arena, the home of the NHL’s Detroit Red Wings franchise until July 2017, when the team moved to Little Caesars Arena, is perhaps the most significant change to emerge from Detroit’s bankruptcy land deals.
An affiliate of Detroit developer Sterling Group acquired option rights to the property from FGIC in a $14 million deal in 2019, buying the site of the former arena and its nearby parking garage.
A hotel originally had been planned for the arena site, though a lawsuit from FGIC against the city in 2018 suggests those plans might have changed based on the city’s preferences as the downtown real estate market shifted.
Sterling Group is now completing construction on a 25-story, 496-unit glassy apartment building it calls The Residence at Water Square, which features floor-to-ceiling windows and rooftop lounges that overlook downtown, the Detroit River and Windsor, Ontario.
Applications for leasing the studio, one-bedroom and two-bedroom penthouse suites opened last month, with move-ins expected to begin in February, two years after site preparation work began.
Danny Samson, Sterling Group’s chief development officer, likened the development to those seen in major real-estate markets like Chicago and New York, saying Detroit is now ready for an apartment complex like this one that can offer a walkable, upscale lifestyle.
“It’s indicative of what is happening in the city of Detroit,” Samson said. “We have overcome challenging times and now are onto a brighter future with every opportunity today and for tomorrow.”
The site itself has been dubbed Water Square, and there will be a walkable, interactive space around the building in future phases, Samson said, with more details to come. Sterling Group has been in talks with the Detroit Regional Convention Facility Authority board about building a 600- to 800-room hotel that would be connected to Huntington Place.
The two entities entered an agreement in January, and property has been deeded to the city for the expansion, Bruce Goldman, the city’s chief assistant corporation counsel, said in an email. The riverfront convention centre sits within a short walking distance of the Residences at Water Square.
Residents of the apartment complex won’t have their own parking, though valet service will be available. In early 2021, Grosse Pointe-based Foster Financial Co. purchased the eight-story Joe Louis Parking Garage at 900 W. Jefferson Ave. from Sterling Group to offer parking for tenants of the commercial building it owns at 211 W. Fort St. and for the public.
“There is major demand in downtown Detroit, regardless of whether people are working from home,” said Brad Foster, president of Foster Financial. “There is a deficit of parking spaces.”
The garage reopened in March 2022 after $10 million in renovations of the first five floors involving concrete work, waterproofing, new lighting and new security measures. Another $14 million in work is expected to be completed in the next year on the top three floors.
Developments such as The Residence at Water Square ( just one example ) solidifies the increase and positive future for Detroit.
Business, professional services, electronics, software and IT services and of course construction and real estate and financial services are showing great promise in the city.
Global Investments are also seeing a growing re-interest in the Detroit buy to let investment market.
If you are ready to invest in the Detroit housing market, or wish for a call and more information on the latest properties Global Investments can offer then please email us today at :
invest@globalinvestmentsincorporated.
