John Gallagher

Detroit Free Press

Nobody should be surprised that Detroit is redeveloping again after decades of decline. Be surprised only that so much redevelopment is happening when obstacles to growth in Detroit remain so frustrating.

By obstacles I mean the myriad bureaucratic and technical roadblocks that developers must overcome even before putting shovel into ground. Projects that might take months in greenfield areas still take years to finish in the city.

Two recent examples illustrate the problem.

Consider the latest wrinkle in the deal to remake the old Tiger Stadium site in Corktown into headquarters and youth sports facility for the Detroit Police Athletic League.

In December 2014, the City of Detroit agreed to sell an L-shaped portion of the stadium site for the new headquarters. The city also agreed to lease the historic playing field to PAL for youth sports under a long-term lease. In hindsight, that arrangement set up two complications.

First, it “landlocked” the city-owned playing field, meaning there was no access provided to a public roadway except by crossing someone else’s property. That violated the Michigan Land Division Act. Second, Detroit’s zoning ordinance requires a setback, or separation, of outdoor recreation fields or facilities from adjacent properties, which would mean reducing the size of the playing field to set it back from the PAL facility.

How do you develop Detroit's 400-acre riverfront?

Matt Walters, a top aide for development to Mayor Mike Duggan, last month told a board of planners that controls the site, that issues could be resolved after four more months of complicated legal work. But with PAL eager to break ground this month, the city opted for a simple solution — deeding the playing field to PAL so that the new headquarters and playing field were now one parcel instead of two different ones, eliminating two problems.

The last-minute hiccup shows the type of arcane legal challenges that bedevil so many projects in older cities like Detroit. And those challenges came on top of years of raising money and winning a host of earlier city approvals.

An even more challenging set of issues faced developers of a new medical warehouse built for Cardinal Health in Detroit’s New Center area. At 275,000 square feet, the $32-million warehouse, where medical devices and supplies are stored for regional use, opened last year.

Dean Kiriluk, executive vice president with Troy-based Kirco, said a similar project would take no more than 90 days of pre-development work in a suburban greenfield site. But in Detroit the pre-development planning and approvals took three years.

Environmental problems with the land, which was the site of previous industrial and residential uses, presented the biggest challenges. Kiriluk said crews unearthed basements, tunnels, underground storage tanks, railroad tracks, septic systems. “We dug up everything but Jimmy Hoffa,” he said.

Much of the big site was contaminated with asbestos and lead. Every yard of earth moved required testing. A vast vapor-barrier system to prevent toxic vapors from leaching into the building from the soil had to be built, one of the largest such systems in the eastern United States.

Land assembly presented immense complexity. Kirco had to combine 99 parcels into one big 17.5-acre site. Getting approvals to close public streets and alleys required working with 14 government agencies.

Then, too, the complexity of the deal meant a greater than normal number of negotiations. Kiriluk said that on a typical greenfield project a developer might obtain 15 signed legal documents — a land purchase agreement, a few partnership agreements, bank loan paperwork, a zoning approval, and the like. For the Cardinal Health warehouse, more than 200 legal documents were required from city, county, state, and federal agencies plus private players.

“If you can think of a governmental agency, we worked with them,” he said.

Add it up, and it’s amazing that any big projects at all get done.

Don’t take this as a rant against reasonable government regulations. All those environmental agencies and zoning boards are there to protect the public. Nor should we forget that the City of Detroit in recent years has made progress in many ways. The Detroit Land Bank Authority has vastly simplified the process for Detroit homeowners to buy a side lot next to their houses.

But clearly, further reform is needed. Kiriluk noted that too often the different agencies involved in the Cardinal Health project worked in linear or sequential fashion, instead of all getting together in one room. The City of Detroit wouldn’t sell land until zoning approval had been obtained, and street and alley closings couldn’t begin until the land had been purchased.

Why, Kiriluk asks, couldn't all the agencies work on a deal at the same time once city leaders give their general blessing? The Cardinal Health warehouse fit that model. It had already been green-lighted by city leaders in general. The delays were all on the technical side, clearing away the legal brambles to groundbreaking.

It’s a tough problem for Detroit. The rapid pace of redevelopment in the greater downtown masks the extent of the challenges. Redeveloping Detroit remains a frustratingly long, hard road filled with legal and financial potholes. Only the resilient and resourceful make it all the way.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.