Ilitch organization says its trying harder to build the arena district

The Ilitch organization is rebooting its approach to real estate development in the wake of criticism over the slow pace of construction for a large district around Little Caesars Arena.

Whether the new ambition and the half-dozen projects underway will be enough to quiet the critics is an open question.

The organization says it added dozens of staffers so that Olympia Development can handle more projects in-house and depend less on outside firms as partners. And it insists it is finally moving forward on some — although not all — of the stalled projects in the district.

More: Ilitch organization to get $74M bonus for hitting arena district goal

In a sit-down interview this week at their offices at the new Detroit arena, four Olympia Development officials — most of them hired in the past year — described how the organization is focused on finishing many of the district projects that Chris Ilitch unveiled in July 2014 as amenities that the public could anticipate seeing not long after the arena opened in fall 2017.

A total of seven projects are now underway, they said, including redevelopment of the long-vacant Hotel Eddystone next to the arena into 92 apartments and construction of a new, five-story offices and a sports medicine complex next door.

“We are tackling seven projects and have got probably another six or seven in the wings that we're currently pushing," said Keith Bradford, Olympia Development's senior vice president of development. “The four people in this room wake up every day and what’s on our mind is developing The District.”

The Olympia officials conceded that some projects that appeared in those early plans for a 50-block District Detroit — a new hotel, redevelopments of the vacant American Hotel on Cass and empty Alhambra apartments on Temple Street, among others — are not on their list of developments underway.

Those projects "are still high on our priority list" and could be done in the future, they said. However, Olympia is not releasing any possible starting dates for them.

"When they think about The District Detroit, I do think it’s a much longer horizon and it’s a long-term play," Bradford said.

Olympia Development also is in the process of updating its master plan for the arena district, now at least five years old. The officials declined to detail the time frame for building out the updated plan.

"The organization has got a very, what I would say, long-term view to development," Bradford said, "unlike maybe a traditional developer who may be looking to flip a building after it's filled.”

Seven projects

The seven projects underway are:

Redevelopment of Hotel Eddystone into 92 apartments. Scheduled to open fall 2021

The offices and sports medicine complex at 2715 Woodward, expected to open in early 2021

Redevelopment of the long-vacant United Artists building, 150 Bagley Ave. in downtown, into 148 apartments. The deteriorated theater will be razed.

Redevelopment of the historic Women's City Club building, 2110 Park Ave. in downtown, into flexible office and co-working space

Renovation of 1922 Cass Ave. as office space

Construction of a new office building at 111 Henry Street near the arena

Construction of another new office building at 120 Henry

There are other potential projects on the horizon as well, the officials said.

“We’ve got deals that we are currently working on. Due to the confidentiality of negotiations, I can't share with you what’s going on there. But we are very bullish on how those are going," Bradford said.

A grand vision

Chris Ilitch, president and CEO of Ilitch Holdings, laid out a grand vision in 2014 of the future arena district that called for five new neighborhoods, hundreds of new and rehabbed apartments and lots of street-level retail.

"Our vision is to build out a sports and entertainment district that is world-class and rivals anything in the country, perhaps the world," he said at the time.

Ilitch did not attend this week's sit-down interview with the Free Press. The meeting reflected a recent shift in the organization's approach to news media coverage.

Today, most of the district buildings in those early renderings have yet to be completed — with the exception of parking decks and the Wayne State University's Mike Ilitch School of Business.

Still, the organization last year hit its minimum legal obligations for the district by spending $200 million on developments: the construction of two parking decks, the Google office at the south side of the arena and the new Little Caesars headquarters on Woodward in downtown.

That unlocked a $74 million tax-capture subsidy for the Ilitch organization under a deal that was negotiated while the City of Detroit was under emergency management.

Criticism over the slow pace of construction for other projects — from general grumbling to negative memes from anti-Ilitch activists on Facebook — led to an HBO report last spring that chided the Ilitch organization for unfulfilled pledges.

No 'conscious decision'

In this week's Free Press interview, Olympia officials pushed back on any suggestion that the Ilitch organization made a conscious decision to not immediately build out the district.

According to Bradford, each project had unique challenges that led to slipping time frames. For example, he said, an early effort to redevelop the Eddystone had difficulties with "the capital stack not coming together in the 12th hour."

"To suggest that there was a conscious decision not to build would be incorrect," Bradford said of the District Detroit projects. "You need to look at this on a deal-by-deal basis. Some (are) self-development, some (are) done with partners and so forth, economic conditions change — all of those factors come into play, which leads to delays.”

Some of the most strident online criticism has concerned the proliferation of surface parking lots across the district.

Olympia officials say a number of those parking lots are placeholders for future developments.

"Those are future development sites. And we built them with that in mind," Bradford said.

A new approach

Olympia Development says it has hired more than 30 people to strengthen its in-house team, many of them filling new positions. Its capabilities are increasingly like that of businessman Dan Gilbert's Bedrock Detroit real estate firm, which has undertaken numerous Detroit building and renovation projects and doesn't sit on properties for long stretches of time.

Bradford, who joined Olympia in mid-2018, said he doesn't know why the organization did not try its current approach back in 2014 when the District Detroit vision rolled out.

“I can’t speak to what happened prior to us getting here, but what I can speak to is what’s been done since I came on board," he said. “Now the team is here and we are full speed ahead."

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl. Read more on business and sign up for our business newsletter.