Firm trying to buy Park Avenue House 'shocked' over 30-day notices

Allie Gross | Detroit Free Press

The Troy investment firm that's in negotiations to purchase Park Avenue House in Detroit was "quite shocked" to learn last week, via a Detroit Free Press article, that the seller had given 30-day notices to its residents, many of whom have lived in the building for years.

"They knew there were residents in the property but they were positioned as month-to-month residents — which technically they are — but it wasn't explained that ... some ... have been there since 1975," said Bill Nowling, a partner at public relations firm Lambert, who is representing the buyer, MKiezi Investments. "That's an important fact that they now know; they want to do the right thing by residents."

According to Nowling, who will not discuss terms of the negotiations, Detroit Mayor Mike Duggan reached out to MKiezi Investments, whose principal is Mario Kiezi, after seeing the article to discuss ways to help the current residents.

"MKiezi met with the mayor last Friday ... to resolve the issue in a way that's respectful to residents that are there, to give them time to find another place to live," Nowling said. He said that if the sale goes through, renovations on the hotel likely will not happen until the third or fourth quarter of 2019, meaning there should be plenty of time to work with residents.

"It takes time to get permits, to get vendors lined up," Nowling said. "The mayor said let's use the time to work with residents. His client plans to keep the building as a hotel.

As of Sept. 27, the 180-unit, 13-story building, which also houses the Town Pump Tavern and is just south of Little Caesars Arena, was listed for $15 million, according to CPIX, a commercial real estate information exchange. Nowling wouldn't share the sale price. A close source to the deal told the Free Press that the figure is currently at $13.5 million.

According to Nowling, there is a hope to hammer out a deal in the next few weeks and close by the end of the year or early 2019.

"This whole 30-day eviction notice was never part of any proffer or proposed purchase agreement. ... That was a decision by the seller," Nowling said.

The Free Press has made numerous attempts to reach out to Sean Harrington, the seller, but has not heard back.

Between Oct. 5 and 7, residents at Park Avenue House — a hotel that attracts a number of low-income, long-term guests — were given 30-day notices.

The news, which was accompanied by rumors that the building had been sold, highlighted the continued interest in downtown Detroit development but also drew attention to limited affordable housing options in an increasingly desirable city.

More: Detroit hotel residents, many low-income, given 30 days to move

More: City of Detroit plans to use $400,000 to help Park Avenue House tenants

"As one of the last affordable places to live, this is displacing many poor and low-wage working people," resident Richard LaBelle wrote in an email to theFree Press. "It is a shame, and it would be nicer if we had more time, or some assistance — at least some publicity in our plight!"

While Park Avenue House is often described as a hotel — originally called the Royal Palm, it was one of three hotels designed by architect Louis Kamper for Detroit hotelier Lew Tuller in the early 20th Century — it was, in fact, marketed as an apartment building with month-to-month deals.

"The Park Avenue House has 12 floors. Each floor has an identical layout. Large 1-Room Studio Apartments that include spacious walk-in closets make up the majority of the living spaces. 1 & 2 Bedroom Apartments are also available. All living places are subject to availability. Larger spaces go fast! Shown is a basic layout of each floor. Some spaces combine to create larger apartments," the hotel's now-defunct website said as recently as last December according to Internet Archive "The Way Back Machine."

The building was purchased by Wilbur and Catharina Harrington for $89,275 in 1976. In 1994, they signed a quit-claim deed selling the property for $150,000 to Harrington Properties Inc., whose resident agent is the couple's son, Sean.

Today, the younger Harrington, who owns Hot Taco, the Iodent Lofts and Centaur Lounge, manages the building, which, over time, has become less a spot for transient guests and more — with its low weekly, biweekly and monthly rates — a home catering to those with limited incomes or cash flow problems.

"If you have bad credit, or a previous eviction, or no money for a security deposit or a criminal background it can be hard to find an apartment. That's why many people chose to live in motels," Alysa Wamsler, a volunteer from Training and Treatment Innovations, a social services program, explained to the Detroit Free Press last fall for a story on tenants struggling to find new shelter after being kicked out of a Royal Oak Township motel that had been condemned.

On Tuesday, Detroit City Council approved a motion to move $350,000 in emergency funds to United Community Housing Coalition. The coalition is a local nonprofit that works on housing issues in the city and has taken initiative on this situation.

The money will be used to provide moving assistance to those who want to move, as well as free lawyers for those who want to fight the eviction.

The mayor and United Community Housing Coalition met with about 50 to 60 of the building's residents last Saturday at Central Methodist Church. According to Alexis Wiley, the mayor's chief of staff, an estimated 90 percent of the tenants in attendance expressed an interest in fighting the eviction.

Nowling says his client is currently trying to get the seller to rescind the 30-day notices.

"The final negotiations is to get the seller to back off," said Nowling.

MKiezi is a small family-based investment firm. According to the principal's Linkedin page, the company "has constructed and redeveloped over 300K square feet of commercial, industrial, and retail properties in the Detroit metropolitan and Northwest Ohio (Toledo) markets."

This is the firm's first foray into the downtown Detroit real estate market.

Read more about the Park Avenue House, the 30-day notices and the growing struggle to find true affordable housing in Detroit here.

Allie Gross is a business reporter with a focus on development, housing affordability and income inequality. Contact Allie Gross at AEGross@freepress.com. Connect with her on Twitter @Allie_Elisabeth.