JC Reindl, and John Gallagher

Detroit Free Press

As Detroit's revitalization begins to spread from the greater downtown into the neighborhoods, squabbles over style and content of some new projects are bubbling up.

Just north of New Center, plans to remake the long-vacant Seward Hotel as subsidized rental housing have upset some nearby residents hoping for a more trendy boutique hotel.

And in the West Village district on the east side, plans to build an architecturally modernist townhouse project have nettled neighbors who hoped for a more traditional design to match the district's Tudor and Arts and Crafts look.

► Related:Vacant Detroit building had illustrious past as hotel

Such wrangling follows inevitably in the wake of progress, say many longtime observers of the Detroit scene. In some ways, the disputes seem unusual merely because Detroit's neighborhoods have lacked any new development — and the controversies that come with it — for so many years.

"These kinds of disputes are indeed very common in most places," said Margaret Dewar, a professor of urban planning at the University of Michigan. John Mogk, a longtime professor of development law at Wayne State University, agreed. "The development issues could be found in any gentrifying city at any time."

It's possible that the disagreements flaring in various neighborhoods reflect new expectations generated by the success of downtown and Midtown. This is often called the issue of two Detroits, one in the greater downtown that is upscale and mostly white, the other a mostly poor, mostly black city.

And it is possible that with recent gains made in the city — including a slowing of population losses and more investment by developers — some community leaders may want to guard against a gold rush mentality and better control what happens in their neighborhoods.

► Related: Detroit gets $5M grant for neighborhood redevelopment

Richard Hosey, a Detroit developer working on various projects in the city, said contentious debate over redevelopment plans signals something positive about where Detroit is now.

"Even the disagreements are healthy because it means both sides are actively engaged," he said. "There will be some disagreements, sometimes for good reasons and sometimes just over style and the like, but actively engaged people engaged in the discussion is a good thing overall." Ideally, he said, it "gives more people confidence that community engagement works."

The West Village spat

Residents of Detroit's West Village had a special neighborhood-wide meeting last month with developers of a planned $3.8-million, 12-unit townhouses and apartments complex to be called the Coe at West Village. It would be the area's first new residential construction in at least three decades when it opens next September.

Although few neighbors seemed outright opposed to any development, there were strong opinions about the building's aesthetic design. Some thought it was too much of a Midtown look while others were upset about the high $2,100-per-month rents expected for the eight townhouses, said Vassilis Jacobs, president of the West Village Association.

On the subject of rent, there was a mix of skepticism and fear that newcomers would be willing to pay so much to live in the neighborhood. Three of the four non-town house apartments will be set aside as affordable and likely much cheaper.

"A little bit of these gentrification issues are happening, but on a much smaller scale than Midtown and downtown," Jacobs said of the West Village issues. "When change comes of that nature, some people get a little shocked and have a lot of questions and concerns about it."

Seward Hotel spat

Plans to turn Detroit's once-grand but now-empty Seward Hotel into mostly subsidized apartments struck a nerve with some homeowners just north of New Center, who believe it's time more upscale residences also were developed around their neighborhood.

The $32-million project to renovate the old 11-story Seward Hotel at 59 Seward Ave., off Woodward, could get under way in a matter of weeks.

Detroit-based Shelborne Development plans 91 rental units of subsidized housing for seniors and perhaps an additional 20 market-rate apartments. The project is heavily dependent on federal tax credits available for lower-income housing projects and could not be built without them, said Kathy Makino-Leipsitz, a principal of the development company, which has renovated nearly 30 apartment buildings in the city.

One neighborhood leader claims Makino-Leipsitz originally promised a boutique hotel — not more affordable housing — for the building. The developer says a boutique hotel was never a real idea or possibility because the area can't yet support much else.

"Things are changing very rapidly now, but it just wasn't ready for it. The market study didn't show it was ready," Makino-Leipsitz told the Free Press. "I think they need to wait until the project is done. People will see what a beautiful addition it is to the neighborhood."

The former Seward Hotel, where Hank Greenberg once slept and Joe Louis used to eat, is on a block that has yet to experience the influx of newcomers and upward push in rents like in downtown, Midtown and, most recently, a few parts of New Center. Nearby are a mix of well-kept apartment buildings as well as vacant lots, a liquor store and a Burger King.

"I'm just trying to make a plan for the whole neighborhood," Makino-Leipsitz said. "It is easy to have people say terrible things when they really don't know what they're talking about."

Seward critics

Critics of 59 Seward include Jeff Cowin, president of the Virginia Park Block Club, who has spoken out against the project on Facebook and in a Fox 2 news interview and questioned developer Makino-Leipsitz's track record of maintaining her apartment buildings.

Cowin said he wants a greater mix of market-rate residences in the building and worries about the developer's commitment to keeping up the property once it reopens. He believes the project, with Makino-Leipsitz behind it, is a poor use of government-sponsored development incentives that are funded with tax dollars.

Cowin accused her of misleading neighbors about her redevelopment plans at a block club meeting two years ago.

"Makino tells us she has no construction plans at the moment, but she would like to do a boutique hotel and market-rate apartments," Cowin said of the meeting. "The very next day we saw the public notice from (the Michigan State Housing Development Authority) that showed Kathy Makino had submitted her development plan for 59 Seward to be a low-income housing building."

Makino-Leipsitz strongly denies misleading Virginia Park residents as well as the claim she neglects her buildings.

"It's just not a true story," she said. "I told them I would have loved to do something like a boutique hotel, the neighborhood just wasn't ready for it. They twisted that around and said I lied to them — that I was going to do a boutique hotel."

She predicted her skeptics will quiet down once they see 59 Seward completed and again filled with people.

Mogk, the Wayne State professor, said the dispute shows how expectations have risen in some Detroit neighborhoods.

"The desire is probably to encourage gentrification, not to slow the process by building subsidized housing," he said. "The residents probably see the ripple effect from Midtown coming their way and want to capture it while they can."

In disrepair

The 59 Seward building stopped being a hotel decades ago and has been empty of tenants since 2009, when it closed under previous ownership and quickly fell into disrepair.

It then wound up in the Wayne County Treasurer's foreclosure auction for unpaid taxes in 2011. That is when a corporation controlled by Kara Makino — Makino-Leipsitz's daughter — bought the property for $63,100, records show.

Once the redevelopment gets under way, Makino-Leipsitz said she also plans to renovate the smaller vacantbuilding next door at 69 Seward into 22 new apartments — 17 considered affordable and five market rate.

Financed by government, tax-credit housing programs encourage the development of new lower-income housing by giving developers credits that investors can buy at a discounted rate, like 90 cents of cash for every $1 worth of tax reductions. Proceeds from the tax credit sale then go to the project.

For years, such programs were among the few ways to finance successful residential redevelopments in the city.

The Seward redevelopments will use the federal Low Income Housing Tax Credit program — totaling $26 million worth of tax credits over 10 years for 59 Seward, $5.1 million over a decade for the smaller 69 Seward.

The majority of the apartments in each building will therefore be reserved for tenants making no more than 40% to 60% of the region's median income. That means potential rents between $484 and $727 a month for one-bedroom, 863-square-foot apartments, according to project documents.

In addition to the 91 income-restricted apartments for those 55 and older, 59 Seward — to be renamed Wellington Square — could have about 20 additional market-rate apartments on the top two floors, Makino-Leipsitz said. However, those extra apartments could be office space instead, she said.

The building's neighbor, 69 Seward, recently renamed Bonita Lofts, was purchased for $35,000 in 2010 by Mark Leipsitz, who is Makino-Leipsitz's husband. Renovations could begin there early next year.

Not all of the neighborhood is opposed to income-restricted apartments on Seward. Strolling past the buildings on a recent morning, Lawrence Birchfield, 68, said he wants to see more affordable senior units and would consider one for himself.

Birchfield's own rent recently went up 4% to $527 a month for a New Center-area apartment. He can still afford it, but is nervous about future rent hikes as the neighborhood changes.

"That is one of the things that's a concern for me," he said, "reasonable, affordable housing."

Seward buildings redevelopment: