How these Detroit lofts went from big and cheap to small and pricey

JC Reindl | Detroit Free Press

In the years before downtown Detroit had craft cocktail bars, pet boutiques and $5 pour-over coffees, Mark Clark offered deals on what were then considered upscale city apartments.

For $900 to $1,000 a month in 2010, one could rent a 1,300-square-foot apartment with Jacuzzi tub in the 10-story, 15-unit building he owned near Capitol Park, which he named Clark Lofts and marketed as "Detroit's Best Address." For big rollers, Clark had two units that spanned entire floors — more than 3,000 square-feet — available for $2,000 or $2,500.

Today, prices like that for big apartments are history, artifacts of a bygone era when many downtown buildings were still largely vacant and not yet filled with amenities and luxury-branded housing for the city's new influx of young professionals and empty nesters.

Rent prices in the newest and trendiest buildings now start around $2.25 per square foot. At these rates, a standard unit in Clark's building might have gone for nearly $3,000.

Read more:

Clark Lofts, 35 W. Grand River, was open from the late 1990s until Clark sold the property in December 2013. During that run, it housed an array of downtown Detroit's then-residents.

“It was everybody who lived downtown, from hairdressers to strippers — you name it," Clark said. "I would have a vacancy here and there, but it didn’t take long to fill."

Today, Clark's former lofts building stands as a prime exhibit of the dramatic rise in rental housing prices in downtown Detroit that have occurred in the past five years.

It is also an example of a downtown building that was deliberately emptied of tenants and later renovated, rebranded and reopened for new renters willing to pay much higher rates.

Most of the new downtown housing — with some notable exceptions — involved buildings that had been vacant, mostly vacant or weren't used in the past for housing. That is a key distinction for those trying to prevent Detroit's revitalization from pushing out longtime residents for affluent newcomers.

The building is now owned by Bedrock, the real estate firm of Detroit businessman and Quicken Loans founder Dan Gilbert.

Bedrock bought it in May 2015, a year and a half after Clark sold the still-occupied property at auction for about $2.6 million to a Chinese company, DDI Group, which immediately stopped renewing leases and shuttered the building.

"We did empty it before the sale as it would be an easier sale without tenants," a DDI spokesman Ken Creighton said Friday in an email.

DDI also sold Bedrock two other downtown properties: the David Stott and former Detroit Free Press buildings. DDI acquired both of them at auction as well.

Once Bedrock took control of Clark Lofts, it completely overhauled the empty apartments and reopened the building this year under the new name 35W Capitol Park Apartments. The price Bedrock paid DDI for the property was not disclosed.

There are now 24 units in the building, each one significantly smaller than Clark's. Recent asking rents were $1,675 a month for a one-bedroom unit (639 square feet) and $2,095 for a two-bedroom unit (876 square feet), according to listings on 35W's website. All but one apartment is currently leased.

"When we got the building it was empty, abandoned, and there were a lot of improvements that needed to happen," said Bedrock's Director of Architecture Jamie Witherspoon. "It was a lot of work."

Gargantuan lofts

James Nelstein, 59, was among the last Clark Lofts tenants to move out.

He began renting there in about 2000, and several times moved to different units on different floors. During his stay, scenes from the Lifetime network movie "America" starring Rosie O'Donnell, were filmed inside the building.

In a phone interview last week, Nelstein, who now lives in Clinton Township, was shocked to hear the current asking rents for the building's new, smaller apartments. But he said he understands that rents go higher as demand grows for living downtown.

"Hey, it’s going to be a downtown again," he said. "If you don’t compete with all other downtowns and the prices they are charging, you won’t be a downtown.”

Nelstein recalled how many of his neighbors at Clark Lofts were photographers, artists, college students or self-employed; few of them appeared to have regular 9-to-5 jobs, he recalled. One tenant operated a "boot camp" aerobics studio in a giant loft that spanned the entire sixth floor.

His favorite apartment was the full-floor, 3,300-square-foot unit on the second floor that he rented for several years and where he used to host large parties.

He paid about $2,500 a month rent for that gargantuan loft, which featured floor-to-ceiling windows, the building's largest Jacuzzi and a long bar that he surrounded with 50 bar stools. As a party venue, Nelstein's loft became known as "diamonds and pearls."

At that time there were few, if any, apartments in downtown so large and impressive, he said.

“You would take a lady in and she would fall in love in it," he said. “They would get on the phone and call their friends up and say ‘Hey, come down and take a look at this!' "

Nelstein said Clark's vision for what was possible downtown was ahead of its time.

“Mark did a pretty good job for a building that he had to gut out and start from scratch," he said. "And you’re talking about a young black man at that time, too.”

Offices to lofts

The building at 35 W. Grand River dates to the 1920s and was built by Kmart founder Sebastian Kresge.

Clark, 60, a native Detroiter who lives in Windsor, said the building was mostly empty office space when he bought it in 1986.

He leased a portion of the building back to the seller until the mid-1990s. Clark then saw how a few downtown-area landlords were converting old buildings into loft apartments, and decided to do the same.

With help from his father and uncle, Clark proceeded to do all the carpentry work to create the apartments and install their individual bathrooms. The first apartments were finally ready by the late 1990s.

“It took me years to complete it because I was just doing one unit and then collecting rent, and while I still had money left I’d do another unit," Clark said. “I did one or two and then everybody saw them and asked, ‘Can you do me one?’ and it sort of snowballed from there.”

A different downtown

Downtown Detroit was a different place back then. There were more vacant storefronts and fewer boutique hotels, fashionable restaurants, coffee shops and upscale retailers such as Lululemon and Bonobos.

Clark Lofts didn't have a monopoly on big, inexpensive downtown lofts.

Rent was reportedly as cheap as $500 a month and the units as big as 2,500-square-foot at nearby 1217 Griswold, a building that housed artists and musicians and was a popular venue in Detroit's early rave party scene, according to an essay by former residents at Vice.com.

Now known as the Malcomson Building, it is also owned by Bedrock and filled with recently renovated apartments and street-level retail.

One of the better-known visitor attractions near Capitol Park was a strip club called The Grind. But the club suffered a 2014 fire and was razed and replaced last year by a new 13-story Bedrock-owned building, 28Grand, containing 218 "micro lofts."

The market-rate rents for 28Grand are $950 per month for super-compact apartments averaging just 260 square-feet. Nearly 40 percent of the units are reserved at lower rents for tenants with earnings below the area's median income.

Income diversity

To improve diversity in downtown, Detroit's elected officials, including Mayor Mike Duggan, have been pushing developers to set aside 20 percent or more of their new or newly renovated apartments for people with below-average incomes.

“If you want to live where everybody around you has the same kind of job and same kind of income, there are suburbs where people are economically stratified, and those are perfectly good life choices," Duggan told reporters last week. “But if you’re going to live in the city of Detroit, you’re going to be in a city with people of all backgrounds and all incomes.”

Rare elevators

Clark Lofts was also notable for its pair of antique and manually-operated Otis elevators. One of them eventually stopped working. To use the remaining elevator, tenants often had to use their cellphones to summon an elevator operator, sometimes Clark’s cousin or a tenant who got a rent discount for being on-duty.

“They didn’t have a call button," Clark explained, so, without an operator, "if I took the elevator up to 10, and you needed it, you had to walk up to 10 to get the elevator."

Bedrock replaced the old elevators, but kept a few of their decorative design elements.

Clark said Detroit building officials used to be far more lenient when it came to code violations. For instance, Clark Lofts did not initially have a certificate of occupancy, he said. But the city didn't hassle him about that, he said, "they were just glad to have people downtown."

It wasn't until the final year Clark owned the building that he started hearing from city inspectors. He began to contemplate selling once he learned the building would need about $500,000 in upgrades, including installing fire suppression sprinklers.

Clark said he has no regrets about letting go of Clark Lofts, as his original plan when he converted the empty offices into apartments was to someday sell the building.

“If I do say so myself, I had the nicest lofts down there at that time," he said.

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @JCReindl.