Businessman Dan Gilbert’s real estate firm Bedrock broke ground Thursday on a new $800-million-plus development of four to five commercial and residential towers in downtown Detroit, continuing its recent pivot from redeveloping the city’s old and once-underused buildings to constructing new ones.
Gilbert, the founder of Detroit-based mortgage giant Quicken Loans, said the project is needed because many of downtown’s existing office buildings are full or nearly full, and market demand for new downtown housing still looks to be insatiable.
This circumstance is dramatically different from just six years ago, when downtown Detroit was awash in vacancies as the city careened toward municipal bankruptcy. Gilbert is widely credited for that turnaround by purchasing, renovating and finding tenants for much of the empty space.
“We have to build to continue to grow. There’s no other way to grow, but to build,” Gilbert said during Thursday’s groundbreaking event, which was held on the site in a large event tent. “We’re at full.”
Speaking afterward, Gilbert said he isn’t worried about getting financially overextended from all of his firm’s ongoing construction and renovation projects in Detroit.
“No, we don’t have any concerns about that,” he said. “We have all that planned out.”
Bedrock’s so-called Monroe Blocks project will take shape on what is now about 3.6 acres of surface parking lots spread over two city blocks at the corner of Monroe Street and Campus Martius.
Divided into parts Block A and Block B, the project includes a 35-story glass and terra cotta office tower that will be the first new high-rise office development in Detroit since 1993.
Block A also will have a 17-story, 148-unit residential tower with 66,000 square feet of retail space, aimed at attracting unique shops and restaurants.
Block B, situated at Monroe and Randolph streets, will mostly contain residential units. There are plans for three Block B buildings, but some of them may be combined as the project proceeds.
The project will incorporate the facade of the derelict National Theatre, built in 1911, which has stood vacant and alone on the site for decades. It will also permanently close Farmer Street to vehicular traffic and convert the street into a courtyard with nearly 2 acres of open public space.
Building construction is estimated to finish sometime in 2022. In total, the Monroe Blocks project will contain an estimated 482 residential units, 847,000 square feet of office space and 117,000 square feet of retail space, according to Bedrock. There will also be a new below-ground parking lot.
“By filling in all of this vacant land, all of these missing pieces, we restore vibrancy and density to a site that hasn’t seen this urban intensity in almost 50 years,” said Bedrock Chief Design Officer Melissa Dittmer.
The Monroe Blocks is a short walk from Bedrock’s other big and ongoing new construction project: the $909-million Hudson’s site office building and residential and hotel tower.
That project broke ground one year ago and is also estimated to finish in 2022. Its 912-foot tower is to become Detroit’s tallest building, taller even than the Renaissance Center.
Bedrock also has started construction on an addition to the One Campus Martius building, formerly known as the Compuware Building, which will add space for about 1,500 more office workers, although it will cover up a pair of giant murals by street artist Shepard Fairey and brother-artist duo How & Nosm.
Following an international search for a Monroe Blocks architect, Bedrock commissioned Danish firm Schmidt Hammer Lassen to design the project alongside Detroit-based firm Neumann/Smith Architecture.
Bedrock chose the Copenhagen-based firm after considering 20 architectural firms from across the globe and holding a small competition between the final two or three.
The Monroe Blocks is Schmidt Hammer Lassen’s first U.S. project. It is also the first time that Bedrock has picked an overseas architectural firm.
“They are really well known for doing unique projects that combine different types of (uses) in a way that is interesting for the public,” Dittmer said.
Schmidt Hammer Lassen’s design director, Kristian Ahlmark attended Thursday’s groundbreaking event wearing a head-to-toes black outfit. He recalled receiving an out-of-the-blue phone call from Bedrock about two and a half years ago.
“We were intrigued, we were curious. But maybe also a bit skeptical,” Ahlmark said. Yet after he and his colleagues visited Detroit and saw the site, “our curiosity was quickly turned into a profound and deep love for the place,” he said.
He described the Monroe Blocks as an ambitious undertaking that will create new iconic buildings, but not buildings that overwhelm their surroundings.
“This project by all means needed to be deeply rooted in its context,” he said, “and by that we are talking about the physical surroundings, as well as the cultural and social context that is Detroit.”
Under city requirements, at least 51 percent of the project’s construction work hours must be performed by Detroit residents.
“Today is proof that construction in Detroit is expanding with no sign of slowing down,” said Nicole Sherard-Freeman, president and CEO of Detroit Employment Solutions Corp.
The Monroe Blocks will make use of various State of Michigan-approved tax incentives to help Bedrock manage with the financing. Gilbert and state officials have said that development incentives are still needed in Detroit because market rents, although rising, remain too low to support the high costs of complex and quality new high-rises.
In total, the project would have an estimated $325 million in reimbursable costs for Bedrock over 30 years, according to Detroit Economic Growth Corp. documents.
That money would largely come from capturing property taxes, state income taxes and withholding taxes related to the new businesses, workers and residents that occupy the new buildings. A portion would also come from capturing state sales and income taxes for the project’s construction activities.