From Jennifer Kanalos, Director of Board Administration
With yesterday’s action by the Michigan Strategic Fund (MSF), the Bedrock Transformational Brownfield Plan (TBP) has cleared its final hurdle and can now begin to reshape Detroit’s skyline and urban core. It is the first-ever project in Michigan to utilize PA 46, a law that affords developers the opportunity to capture a portion of specific incremental taxes generated from large-scale transformational projects for a specific time to reimburse redevelopment costs.
By authorizing a $618-million, multi-layered incentive package for use by Bedrock, the MSF has unlocked opportunity on the grandest scale. TBP — the state’s largest-ever real estate project –far exceeds the $500M investment threshold required by PA 46. It will certainly fulfill the letter of the law, which requires plans to have a “transformational impact on local economic development and community revitalization,” as well as enable population growth, commercial activity and job creation.
After the legislation passed in 2017, the Detroit Economic Growth Corporation (DEGC) was charged with navigating the transaction through its rigors. The DEGC’s Real Estate and Finance Team facilitated the approval of tax abatements to address the financial gap with the redevelopment of the sites and to provide the required local contribution toward the Bedrock TBP. The Downtown Development Authority (DDA) was instrumental in acquiring the land for redevelopment, which attracted Quicken Loans’ headquarters downtown. The Detroit Brownfield Redevelopment Authority made history by becoming the first authority in the state to take a project under the law all the way to approval by the Detroit City Council. This accomplishment was completed without flaw and is a tribute to the Boards and their respective leadership.
Transformational describes the Bedrock TBP project accurately. The $2.15B investment plan includes about 3.1 million square feet of new residential, retail, office, parking and hotel space in four distinct development sites covering six acres. When completed in 2022, the project is expected to create 7,738 jobs, paying on-average $34 per hour.
Not only will Bedrock’s TBP transform Detroit’s ecosystem, the landmark project has transformed our economic-development toolbox. Prior to 2017, Detroit simply didn’t have access to the incentives necessary to address the large-scale redevelopment needs of the city. As a result, critical downtown sites – like the former Hudson’s Department Store — sat vacant.
However, through acquiring high-demand land parcels and using incentives available under the new law, the DEGC and Detroit’s public authorities can now create an increased value proposition for Detroit that entices developers into the city. Make no mistake, Detroit is in competition with every other city to attract talent and investment. Having a vibrant city center is vital. Turning vacant sites into additional living options and Class A office space adds density, and invites new investment. Helping to close the funding gap is what was needed to make Detroit attractive to global corporations, local developers and even home-grown entrepreneurs.
Through its actions, the MSF has created an economic climate that is conducive to investment and growth, and is accelerating Detroit’s turnaround. The Bedrock TBP has become a best practice for how public-private partnerships enable developers to transform communities.
Thanks to the work of the DEGC, MSF, DDA, DBRA, MEDC, City Council, Mayor’s office and countless others, new construction can begin on Detroit’s historic downtown Hudson’s site and surrounding area. Properties that sat vacant will now help drive economic prosperity and catalyze Detroit’s economy to create even more opportunity.