John Gallagher

Detroit Free Press

Businessman Dan Gilbert's top aide predicted Thursday that a residential tower planned for the site of the old Hudson's store will set a new "high-water mark" for apartment rents in the city of Detroit.

Matt Cullen, president and CEO of Rock Ventures, Gilbert's umbrella entity for his wide-ranging families of companies, said the planned residential tower would represent just one component of a multipurpose building on the site on Woodward Avenue just north of the One Campus Martius building, the former Compuware headquarters.

Speaking with the Free Press at the annual Mackinac Policy Conference, Cullen said the organization is still working out its plans against a year-end deadline to have the deal finalized for the city-owned site.

Mackinac Policy Conference

"We’re doing a lot of work to understand it," Cullen said. "It’s a complicated site. And we’re trying to make sure we hit the market right relative to the different components of it. There are certain things that we know. It’s going to be mixed use. It's going to have some significant retail. It’s going to have a significant civic component to it. And honestly that’s what we’re wrestling with a lot, trying to figure that out, make sure that we hit the mark with it."

Cullen said the "podium" portion of the building will probably measure four to six stories and a residential tower of unspecified height will rise above that. The rental rates for the apartments "will certainly set the high-water mark for rents in the city as well, just given the nature of it," Cullen said.

Apartment rental rates in the greater downtown have risen rapidly in the past few years from about $1.25 per square foot to about $2 per foot now. Cullen acknowledged that an upscale tower on the iconic Hudson's site would be priced above that level.

But Cullen emphasized that Gilbert's organization needs city approval for transfer of the site and its plan to meet a required affordable rent component in all city-supported projects.

Detroit Mayor Mike Duggan declared that new development receiving city assistance would reserve at least 20% of its units as "affordable," or generally for residents making no more than 80% of regional median income levels. Since Gilbert would be getting a city-owned site for the project, the Duggan goal would certainly apply to it.

Cullen said the New York-based architecture firm SHoP and the Detroit-based Hamilton Anderson Associates continue to work on what appears to be an architecturally innovative design for the site.

In other remarks, Cullen said he expected that Gilbert's team and Wayne County officials will decide by this fall whether the site of the county's stalled jail project should be sold to Gilbert for development as the site of a major league soccer stadium. Gilbert's staffers are working with the Wayne County Executive Warren Evans' staffers to analyse three options: completing the unfinished jail at its current site; building a new criminal justice center somewhere else, perhaps on the suggested Mound Road location, and what the cost and benefits of a new soccer stadium project would be.

He said the analysis to cost out those various options should be done by the fall.

“At the end of the day you have three pieces of paper on the table, all face up, and the numbers will speak and people will have conversations and we’ll try to figure it out,” he said. "There’s no negotiations really. Ultimately there may be for sure. But right now it’s just getting information we never had before.”

When then-County Executive Robert Ficano first suggested that Gilbert's organization buy the jail site a few years ago, Gilbert bid $50 million for it. Speculation now runs to several times that amount for what it would cost to scrap the jail project and rebuild it somewhere else. But Cullen said the difference between the options may not be as great as some think.

"I don’t expect the gap to be hundreds of millions of dollar. We’ll find out. But I don’t expect that to be the case," he said.

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