The landmark redevelopment of Detroit's Fitzgerald neighborhood has been delayed again as city officials and the developer wrestle with challenges of rehabbing more than 100 vacant homes in a neighborhood straddling the line between neglect and recovery.

The project is now going to take more than three times as long as the city initially promised. To pick up the pace of the rehabs, two additional home-rehab outfits have been enlisted to work alongside the city’s developer, Fitz Forward.

The city also recently helped arrange a new $400,000 grant for the developer's next phase of renovations, bringing subsidies for the home rehabs to $2 million.

Among the factors complicating the project has been the developer's need for subsidies and an overly aggressive timeline city officials laid out in 2017. Those initial plans were developed without any data — officials admitted in interviews with the Free Press — to support the notion that so many blighted houses could be rehabbed under the original two-year time frame. The housing rehabs now are scheduled for completion by 2024.

“I wish we had been more conservative about the timelines," Arthur Jemison, the city’s group executive for housing, planning and development, told the Free Press. "But I think people continue to see steady progress. They're going to stick with us.”

The city previously moved back the project's completion date to December 2020 when the Free Press reported in the summer of 2018 that the developer had yet to fully renovate a single house.

The Fitzgerald project is a launchpad for Mayor Mike Duggan’s bold strategy to stabilize neighborhoods across the city and show that Detroit’s recovery extends beyond downtown. Backed with $66 million in donations from the philanthropic community, the city has targeted 10 neighborhoods where it seeks to revitalize single-family housing, main thoroughfares and parks.

The Livernois-McNichols region, which includes Fitzgerald, was among the first three neighborhoods selected. The next seven neighborhoods — including Warrendale/Cody Rouge, Jefferson Chalmers and Gratiot/7 Mile — are in various stages of development.

Jemison said lessons learned in Fitzgerald will help the city succeed. “A lot of the source code for the next kinds of things we need to do has been learned in this,” he said.

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In neighborhoods like Fitzgerald — where the housing stock has been decimated by blight — rehabbing and selling houses is a two-headed monster. Fixing up the homes is time-consuming and costly. Selling them is challenging because the market for traditional mortgage loans is borderline nonexistent.

Despite the obstacles and delays, the Fitz Forward development team said it remains committed to achieving its goal — showing that developers of color can weave back together a once-thriving Detroit community without displacing residents.

“If we let this neighborhood look like it had failed or scaled down its ambition, then it would give the wrong message to Detroit and to the country about what can happen in transition neighborhoods,” said Andrew Colom, managing partner of Fitz Forward.

The developers

Colom and his business partner, David Alade, admitted in recent interviews that the project has been challenging. They had reservations about the project’s pace from the beginning, preferring to focus on a sustainable and healthy neighborhood transformation rather than a speedy one. Recent sales of their rehabbed homes in the $100,000 range show that Fitzgerald's housing market is getting stronger and property values are on the rise, they said.

"We're still in the second inning," Alade said, describing the neighborhood as “economically distressed.”

Colom said, "We're going to be focused on this development for 10, 15 years."

Colom and Alade moved to Detroit in 2015 and began purchasing and renovating homes in the neighborhoods of Boston Edison, the North End and East English Village. Prior to taking on the Fitzgerald project, they had developed and sold more than 50 homes and established an equity program for longtime Detroiters to invest with them.

Since the project began in 2017, Fitz Forward has rehabbed 13 vacant homes and sold seven. Twenty lots of vacant land were landscaped in a meadow-like fashion for just under $300,000. The project's original plans called for about 200 meadows, but that strategy was halted as the city embarks on implementing new vacant land policies to give residents more access to buying lots.

The project’s new parameters are laid out in an October amendment to the development contract between the Detroit Land Bank Authority and Fitz Forward. (The development firm is a joint venture between Colom and Alade’s firm, Century Partners, and another Detroit-based development company, The Platform. Colom described The Platform as more of an investor than a co-developer.)

Fitz Forward’s home rehabs now are scheduled to be finished in 2024, pushing back the timetable Duggan laid out in 2017 when he told residents the vacant homes would be fixed up by the end of 2019.

Instead of rehabbing 115 vacant homes as first planned, Fitz Forward eventually will rehab 76 houses in the neighborhood. The amendment to Fitz Forward’s development agreement includes annual performance benchmarks. The company must rehab as many as 16 homes a year until 2024.

About 20% of Fitz Forward’s rehabbed homes were marketed as affordable housing, meaning they will be geared toward those making 80% or less of the area median income, which is $45,440 for a two-person household.

I’Sha and Alex Schultz-Spradlin bought one of the first houses Fitz Forward put up for sale.

The couple bought a three-bedroom, two-bathroom house on San Juan Street in November 2018 for $90,000. They said they're happy with the home, despite a few minor issues with finishing details, and enjoy the friendly nature of their neighbors and the convenient location.

I’Sha, 26, said she’d rather the project be done thoughtfully than quickly. At the same time, she expected some promised amenities, like a dog park, to be a reality at this point.

“It’s a very innovative project. There is no blueprint to do this,” she said. “They could easily have bulldozed their properties and redid them.”

Bringing in additional help

To help make up for the reduction in Fitz Forward’s workload, two other home rehab programs affiliated with the City of Detroit have been brought on board.

“The plan is to get them doing their (rehabs), us doing our 20 to 30 additional, and that’s how we get to close to 100 houses,” Jemison said.

Rehabbed & Ready, which is a Detroit Land Bank program, is currently fixing up seven vacant houses and has committed to rehabbing five more. The city’s Bridging Neighborhoods Program, which makes housing available to residents affected by construction of the Gordie Howe International Bridge, has rehabbed three houses with another in progress.

City officials said the two programs potentially could do more work in Fitzgerald in the future.

Despite changes to the Fitzgerald project to align with more realistic goals, there have been signs of progress:

A new park, Ella Fitzgerald Park, opened in the summer of 2018.

A paved path for bikes and pedestrians that extends through other parts of the city, known as the Greenway, has been built through the neighborhood.

About 30 blighted homes have been demolished.

Beyond illustrating the complexities of a large-scale revitalization project, the Fitzgerald effort also shows how developers involved in Detroit's neighborhood projects depend on subsidies.

To keep the project moving along, Fitz Forward will get a $400,000 grant from Invest Detroit — a nonprofit that administers the city's Strategic Neighborhood Fund — as part of its new development agreement. The developer previously had been awarded a $1.6 million subsidy for the project.

The new grant money will ensure profitability for the next phase of home rehabs this year. The cost of rehabbing a house in Fitzgerald can push $90,000, almost equivalent to the expected sales price, Colom said.

“If the city wanted us to be able to do so many houses so quickly, we needed some type of funding to make sure that we could actually rehab the houses in a way that was somewhat profitable for at least our investors,” Colom said.

The Fitzgerald project's delayed timeline and the need for subsidies is “an apt illustration of what will happen elsewhere” among Detroit’s neighborhood redevelopment projects, said Chase Cantrell, a lawyer and founder of Building Community Value, a Detroit neighborhood development organization. Cantrell also previously worked as a consultant to Fitz Forward but is no longer on the project.

The incentives are necessary because the demand for housing in many Detroit neighborhoods is soft and financial institutions often are unwilling to lend money to interested home buyers.

“Market-driven development isn’t built to benefit community, it’s just not,” Cantrell said. "Without the subsidy, you can’t bring the neighborhoods back. So the question is, where’s it going to come from?”

Federal and state governments have been unreliable sources of money for these projects, he said. The city doesn’t yet have the tax base. So far, Duggan has leaned on local philanthropic organizations to kick-start neighborhood developments through the Strategic Neighborhood Fund.

Cantrell and a partner, Jason Headen, recently purchased a commercial property in Fitzgerald on West McNichols Road with help from Invest Detroit in the form of a $700,000 recoverable grant.

Cantrell said he hopes to find a tenant for the building that fits his development ideology.

"I'm looking for a person of color," he said. "So, the philosophy behind the deal already has been, the developers are black and brown, architects, contractors, minority owned — everybody, basically everybody. So, making sure the tenant is also black or brown and it would be nice if that person came from the community.”

The need for subsidies is one reason Duggan is pushing to raise money for the city's Strategic Neighborhood Fund.

Philanthropic organizations that have donated millions to the fund are keeping an eye on the Fitzgerald project. Representatives of those groups said they realize that revitalizing the city’s neighborhoods will take time.

“These kinds of results are hard to guarantee. I think we remain hopeful that we will see some positive impact,” said Sam Gill, the Knight Foundation’s chief program officer. “The calendar of change at the community level is measured in years, not months.”

The Knight Foundation is part of a national foundation partnership called Reimagining the Civic Commons, which awarded a $4 million grant to Detroit’s neighborhood efforts that went toward the Fitzgerald project.

The Kresge Foundation also is part of that partnership. Kresge has been a significant booster to Duggan’s neighborhoods strategy. Among its contributions was a $15 million commitment in 2018.

Wendy Lewis Jackson, managing director for the foundation’s Detroit program said the city’s neighborhood recovery efforts have shown tremendous progress overall — particularly in opening up public spaces like parks and in small business development.

Neighborhood development, however, is much more complex than downtown development, she said. Neighborhoods are where families root themselves, so access to quality education, health care and jobs are at the forefront.

All that takes money.

“The kind of revitalization that’s required to bring back neighborhoods in an equitable manner in Detroit does require a significant amount of subsidy in order to make the economics work, and the philanthropic community has stepped up in its direct investment,” Jackson said.

“At some point, there needs to be a policy solution for how subsidies are made available and that is going to require a set of conversations between Lansing and the city for how, as a state, how do we ensure we have the development tools that are required for the kinds of investments that our neighborhoods need,” she said.