24 January 2013
Lafayette Towers being revamped for young professionals by Detroit Developers
Story first appeared on The Detroit News
The Lafayette Towers, like the rest of the Lafayette Park neighborhood, was once considered a shining example of urban revitalization.
Designed by famed architect Ludwig Mies van der Rohe and built in 1961, the apartment towers were part of a planned community that included a shopping center, a 19-acre park and a school to attract young professionals to live near downtown. There is a spinal cord injury Detroit service leader available.
Today, as the city undergoes its latest round of urban renewal, investor and lifelong Detroiter Gregory Jackson said he wants to use the aging modernist-style glass and aluminum high-rise community to reinvent Detroit living.
He bought the 22-story, 584-unit apartment complex from the city for $5.8 million in November with a promise that he would pay to bring the iconic structures back to their original glory. A brain injury Detroit physician is near this location.
"I wanted to be part of the renaissance that's taking shape in Detroit," said Jackson, who lives on the city's west side.
The renaissance that Jackson and other developers refer to is tied to rising demand in certain neighborhoods for rental housing for the city's new class of young professionals. Their migration has resulted in a more than 90 percent occupancy rate in Midtown and surrounding areas, according to Midtown Detroit Inc., which tracks housing trends.
State and federal tax incentives as well as easier availability of financing make renovating empty and historic buildings more appealing for Detroit investors than new construction, real estate experts said.
In October, Bloomfield Hills-based Princeton Enterprises bought the shuttered, historic Milner Hotel in downtown with preliminary plans to convert the 10-story building into apartments and rename it The Ashley.
In November, the 34-story Broderick Tower accepted its first tenants after completion of a two-year renovation project. And as investors bid on the Free Press Building on Lafayette Boulevard, there was talk that the historic structure would be converted into housing.
"The city has prioritized restoration rather than new construction. Detroit would like to see the empty buildings back into the market," said Richard Baron, chairman of the St. Louis-based development firm McCormack Baron Salazar.
Baron, who has years of experience rehabilitating historic buildings, is in talks with Susan Mosey of Midtown Detroit Inc. on a $25 million project to restore a vacant building on Alexandrine, just west of Woodward Avenue, into rental residences.
Though demand for housing in certain areas continues to climb, incentives for developers to embark on new construction projects aren't there, Baron said.
Jackson said an investment of as little as $5 million could help attract new, younger tenants.
The Lafayette Towers, he said, noting that it is more than 50 percent occupied, already has some amenities that would appeal to potential younger tenants. The complex is equipped with an Olympic-sized pool, fitness center and 360-degree panoramic views of the city. It's also within walking distance of Greektown.
Rents at Lafayette Towers range from $500 a month for a studio to $1,400 a month and up for a three-bedroom unit, with approximately 30 units that qualify for government subsidies.
Jackson said units can run as low as $1 per square foot, compared to other units downtown where rentals such as the Broderick Towner and other recently renovated buildings charge a much higher rate.
The rates at Lafayette Towers will eventually go up, but Jackson said he does not plan to raise rents until after all renovations are made.
Preliminary improvements, he said, will include adding shuffleboard courts and cabanas to the rooftop pool area, replacing equipment and offering classes in the fitness center, and updating kitchens and bathrooms in apartment units. Jackson said he also plans to install bicycle racks, improve Wi-Fi service and allow residents to use rooftop lounge spaces to hold receptions.
Jackson said he hopes to have initial renovations completed within 18 months.
Molly Dougherty, 24, a high school English teacher, moved into the complex in August with her fiancé.
"(We) decided to move to an exciting part of town," Dougherty said.
Dougherty came to Detroit about a year and a half ago from Omaha, Neb., to volunteer at Cristo del Rey High School. She eventually got hired permanently at the parochial school and decided to move out of a roommate situation in the Mexicantown neighborhood to a more cosmopolitan living experience.
"There's a certain energy in an urban area. I like all the diversity — every day you see different people," said Dougherty, who regularly walks to Greektown for its restaurants, bars and casino.
Wilbert Sherrod, 73, a retired dentist who has lived in Lafayette Towers for 38 years, shared similar sentiments. When he moved into the city more than 40 years ago, he was immediately drawn to the air of affluence that the complex inspired.
"As soon as I came into the city," Sherrod said, "I said, 'I want to live here.' "
Sherrod said he loves summer walks to the RiverWalk, Renaissance Center and Greektown. He does most of his grocery shopping at Lafayette Foods down the street. In fact, after retirement he sold his car and rents one occasionally if he needs to go to the suburbs for errands.
But Sherrod said security and maintenance declined at the complex over the years.
By this past summer, Lafayette Towers was in danger of being sold by the U.S. Department of Housing and Urban Development in a foreclosure auction after then-owner Northern Group failed to make mortgage payments. The city stepped in and bought the property, with the understanding that it would seek a private buyer who would invest in its long-term revival.
When Jackson heard about its financial woes, he approached the city.
"I've been looking for an opportunity to invest in a city that I love," Jackson said.
Sherrod, who lives in a unit overlooking Ford Field, Comerica Park and Gratiot Avenue, said he is ready for the proposed revival.
"I hope this gentleman is truthful with his promise," he said.