John Gallagher

Detroit Free Press

Businessman Dan Gilbert is proposing to build what would be Detroit's tallest building on the old Hudson's site.

The project would be many things at once — an architectural icon, a hub for technology and the signature element of Gilbert's downtown developments. It would include 250 rental apartments, offices and theater and retail space. It would also include a large public market.

The residential tower would rise 52 stories and sit atop a nine-story podium with soaring public spaces. The tower would rise 734 feet, a few feet taller than the Renaissance Center. Total space in the whole complex would be 1.2 million square feet.

Gilbert's people are calling it Hudson's for now but may come up with a new name as the project progresses. The cost would top $700 million.

The city's Downtown Development Authority approved the plan Wednesday and gave Gilbert until Nov. 1 to line up state tax incentives he said he needs to make the project financially feasible. If Gilbert succeeds in that, construction would begin Dec. 1 and finish by the end of 2020.

“I think it’s a great deal,” said Moddie Turay, executive vice president of the Detroit Economic Growth Corp., who negotiated the deal on behalf of the city. “If you look at the history of the Hudson’s block and the impact that that building had on downtown, I think what they’re doing does that site justice.”

Josef Guziewicz, vice president of construction for Gilbert’s Bedrock real estate arm, said the swirling metallic architecture and the soaring interior spaces was meant to create a destination at the heart of Detroit.

“The first thing we said is we don’t want this to be a regular building, that you walk by and it’s kind of dead. We wanted this to be the center of Detroit and really engage people.”

Although just one of many new downtown developments today, a rebirth of the Hudson's site would be special. The Hudson's site has long held special significance for Detroiters, who in generations past flocked to the massive department store and mourned the closing of the Hudson's store in 1983 as an ominous sign of the city's decline.

And in a statement released by Bedrock, Gilbert himself said he hoped the project would one day exceed the impact that the old Hudson's store had on the city.

“For long-time Detroiters, we remember what Hudson’s represented. It wasn’t just a department store — it was the economic engine of Detroit," he said. “Our goal is to create a development that exceeds the economic and experiential impact even Hudson’s had on the city. We believe this project is so unique that it can help put Detroit back on the national — and even global — map for world-class architecture, talent attraction, technology innovation and job creation.”

But building the full scope of Gilbert's vision for the site appears to depend on state lawmakers approving proposed legislation that would create expanded tax incentives for such major developments. The state Senate approved the incentives but the proposal still needs to be considered by the state House as well. Gilbert and his team have said they would have to scale back their most ambitious plans absent the proposed tax incentives.

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Michigan Thrive, a coalition of some 40 communities, chambers of commerce, and economic development agencies across the state, supports the legislation. The legislation limits each city to one approved plan per year, a provision meant to ensure that the benefits will be spread across Michigan.

The legislation would allow developers such as Gilbert to keep a portion of the new tax revenue generated by their projects with the rest of the new tax revenue going to the local government and the state. The concept is that the new revenue would not exist without the new project so therefore everyone benefits.

The legislation in the state Senate would create a new category specifically for major projects that will transform contaminated, blighted or abandoned sites into major new developments. To close the financial gap and make these large, challenging projects possible, the legislation allows the project to capture state sales and income taxes generated from the construction activities on-site and up to 50% of the state income taxes generated from new jobs and residents within the completed development for a period not to exceed 20 years.

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Known as tax increment financing (TIF), this approach means the developer gets nothing on the front end. If the project does not generate the new tax revenue, the developer gets nothing and therefore bears all the risk.

Gilbert has held development rights to the Hudson's site for several years while he has tried to stitch together a plan that makes sense. Two years ago, he released a partial rendering hinting at a daring architectural design to create a destination attraction there. New York-based architecture firm SHoP and the Detroit-based Hamilton Anderson Associates continue to work on the design.

Last April, the DDA gave tentative to Gilbert's plan for the site and agreed to sell him a city-owned underground garage on the site for $15 million.

At last year's Mackinac Policy Conference, Matt Cullen, CEO of Gilbert's Rock Ventures, predicted that residential rental rates for apartments at the Hudson's site would set a new high-water mark for the Detroit rental market.

Detroit's iconic Hudson's store closed in January 1983 as part of the decades-long flight from the city by companies and residents. After a variety of redevelopment schemes failed, the city imploded the massive structure in 1998.

Since then, an underground parking garage has operated on the site while the city hoped for a visionary new project to rise there.

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