Real Estate & Development

Michigan’s Economy Hits 10 Year High

The Michigan Economic Development Corporation (MEDC) reports that Michigan’s economy has reached a 10-year high, according to Comerica Bank’s Michigan Economic Activity Index. The June index jumped 2.0 points in June, spiking to a level of 105.9 – its highest level since 2002. The index has averaged 102 points over the first half of 2012, 11 points above the index average for all of 2011.

“The Michigan economy pushed further ahead in June, with our Michigan Economic Activity Index up strongly for the second month,” said Robert Dye, Chief Economist at Comerica Bank. “The rate of job creation has slowed over the first two quarters of the year as U.S. auto sales have plateaued around a 14 million unit annual sales rate in 2012. But outside of durable goods manufacturing, we are seeing ongoing gains. Housing markets statewide are improving as sales and prices increase. New home construction remains low, but is expected to increase to meet pent up demand.”

The Michigan Economic Activity Index consists of seven variables: nonfarm payrolls, exports, sales tax revenues, hotel occupancy rates, continuing claims for unemployment insurance, building permits, and motor vehicle production. All data are seasonally adjusted, as necessary, and indexed to a base year of 2004.

According to the Michigan Association of Realtors, the number of single family homes sold in Michigan rose 14 percent in July compared to one year earlier. The July 2012 average sales price was $116,116, a 6.55 percent increase over the 2011.

Overall, Michigan is leading the country in economic recovery, according to the Detroit News. The dropping unemployment rate, upswing in home sales and increase in consumer spending are all evidence of a positive outlook for the Great Lakes state.

Will “rightsizing” make Detroit strong again?

Need a new home? Here's 500 abandoned ones all in the same area by DetroitDerek Photography
Need a new home? Here’s 500 abandoned ones all
in the same area by DetroitDerek Photography

Once boasting a population of nearly 2 million, the population of the city of Detroit stands at somewhere between 750,000 and 800,000 residents. Detroit Free Press has a good look at Detroit Mayor Dave Bing’s plan to offer incentives next year to concentrate city residents in core areas that will serve as population centers for a newly configured city. It’s part of his Detroit Works Project and he says:

“We’re going to be encouraging them to move and put themselves in a better situation. … They are much better off moving into a more dense area so that we can provide them with the services they need: that would be water, sewer, lighting, public safety — all of that,” Bing said. “We think that getting our city to be more dense with its population is the right route.”

…City officials say they have identified at least seven to nine population centers that would encompass two-thirds of the city’s 139 square miles. That would leave about 45 square miles, though some of that land is already public park space. The availability of strong schools, nonprofits, churches, parks, community development organizations and medical centers — along with housing stock, income and many other indicators — will continue to be considered in developing the neighborhood plan, officials say.

Bing says there will be incentives for people to move, but many in the city worry that relocation will not go well. You can read Bing’s interview with the Freep and hear what the Mayor is saying about “rightsizing” Detroit below (thanks Rethinking Detroit for the find):

Driving Michigan: Seth Bernard interviews Ray Minervini

Seth Bernard by Patrick T Power
Seth Bernard by Patrick T Power

Driving Michigan is Absolute Michigan’s new show that explores the state of Michigan and the people who are moving us towards the future. It’s hosted by Seth Bernard, a musician with a passion for Michigan. The video was shot by Ken Lake of Mythic Michigan.

Our first episode was shot at The Village at Grand Traverse Commons in Traverse City with GTC developer Ray Minervini.

The photo we use of Seth was taken by Patrick T Power – be sure to check it out bigger!

Debating Demolition & Downsizing in Detroit

Michigan Central Station by MikeRyu
Michigan Central Station by MikeRyu

On Saturday about 4000 extra people dropped by Michigan in Pictures. The impetus was a New York Times story on Michigan Central Station. Although the Detroit City Council voted to demolish MCS last year, a massive budget hole, a lawsuit, and new council members who aren’t quite as bulldozer-happy:

“I don’t want to bulldoze it, then find out later there could have been a viable use for it,” said Charles Pugh, a newly elected member who took over as Council president in January.

Now preservationists, business owners, state leaders and community activists are taking what feels like a last stab at saving the 97-year-old building before it goes the way of New York’s Pennsylvania Station or, more locally, Tiger Stadium and countless other pieces of old Detroit that have fallen to the wrecking ball in recent years. Among the recent proposals have been to turn the cavernous brick, steel and stone facade into an extreme sports castle; a casino; a hotel and office park; a fish hatchery and aquarium; an amphitheater; or a railway station again, with high-speed trains.

Just Another Sofa on the Streets of Detroit by Cherie S.
Just Another Sofa on the Streets
of Detroit by Cherie S.

While the story didn’t have anything new for people who’ve been following the sad saga of Detroit’s largest ruin other than a link to the Michigan Central Station Preservation Society, it does provide a nice lead-in for another national story. Last week in Examining Data That Would Downsize Detroit, NPR reported that with a quarter of Detroit’s 350,000 buildings vacant or in shambles, Mayor Dave Bing wants to reshape the city by getting rid of them and relocating residents who live in desolate neighborhoods, saying it’s too expensive to provide city services in areas that are like urban deserts. Bing’s proposal is based on data collected by demographer Kurt Metzger, director of Data Driven Detroit, who explains the data:

“We had surveyors go out and actually collect information in every single parcel in the city of Detroit. And just to give you the real quick analysis, we found better than a third of the land – and that’s of 139 square miles – we estimate better than a third of the land in the city of Detroit is either vacant land right now or contains buildings that need to be torn down. It’s amazing. I mean, New Orleans is about 70 square miles. We’re talking that better than 40 square miles, better than half of New Orleans is vacant land.

Now, of course its interspersed around the city, so that’s where the issues about going into neighborhoods where there’s a lot of vacant land. But a lot of one or two homes still left on streets. These are neighborhoods that are going to have to be gone into and trying to think about how do we start to move people into other areas.”

An effort like this was discussed in Flint, but according to an article on mLive that contrasts the response of Flint & Detroit to population crash, Flint is no longer planning to do neighborhood relocation.

You can learn much more about Michigan Central Station on Absolute Michigan and Michigan in Pictures, and check out the Michigan Central Station slideshow from the photographers of the Absolute Michigan pool.

Michigan seeks to use Land Banks for redevelopment

Abandoned Richardsonian Romanesque House in Detroit ( Former James Scott Mansion ) by Derek Farr
Abandoned Richardsonian Romanesque House in Detroit
( Former James Scott Mansion )
by Derek Farr

Michigan has 29 land bank authorities – more than any state. The Detroit News reports that Michigan is going to try to use these land banks to spur redevelopment and garner nearly $300 million:

With the federal money expected to come in January, cities such as Detroit and counties such as Oakland are starting land bank agencies for the first time. The state filed for the Housing and Urban Development funding through a coalition that includes 12 city governments and eight counties. It’s a national competition, and the overall fund totals $1.9 billion. Battle Creek, Benton Harbor, Hamtramck, Highland Park, Kalamazoo, Lansing, Pontiac, Saginaw and Wyandotte also would be targeted for revitalization.

The Michigan Land Bank Fast Track Authority would provide land bank services in Detroit; Oakland County, including Pontiac; and Kent County, including Grand Rapids, until local land banks are ready to take over.

Under the plan, the Michigan land banks aim to buy and redevelop more than 6,000 foreclosed, abandoned and vacant properties. The land banks also envision razing 2,500 structures and rehabilitating or building 1,500 homes.

There’s also an effort to encourage urban gardeners to develop empty city lots and allow homeowners to buy inexpensive vacant lots next to their property. “We expect (Detroit’s land bank) to be the most aggressive developer in the city,” said Douglas Diggs, interim director of the city’s land bank office.

Good news for Michigan cities! Check out the Abandoned slideshow from the Absolute Michigan pool for some likely suspects for the money!

Pontiac Silverdome – Sold!

Abandoned Pontiac Silverdome - Pontiac Mi by Derek Farr ( DetroitDerek )
Abandoned Pontiac Silverdome by Derek Farr

The Detroit News reports that the long-shuttered Pontiac Silverdome has been sold for a mere $583,000 as the home for a soccer league. However, with a cost over $55 million to construct:

“This was a giveaway,” said David J. Leitch, a broker with an Auburn Hills based realty firm.

“The property alone, at $10,000 an acre, should have gone for more than that. And you have the Silverdome, its contents, and the infrastructure already in place. I had estimated it would probably go for between $1.2 million and $3 million. I can’t believe it.”

Such sentiments weren’t uncommon Monday, after city officials unsealed bids showing the property that was home to the Detroit Lions was sold at auction to an unnamed Canadian company that plans to bring a soccer league to the stadium. The company’s name will be released when the sale is finalized within 45 days, said Fred Leeb, the city’s emergency financial manager. Leeb acknowledged the sale “is not a windfall,” but said the Silverdome’s $1.5 million upkeep drained the beleaguered city’s finances.

Go to about 1:20 in the video to get past the auction promo. Much more about the Pontiac Silverdome on Michigan in Pictures!

Assignment Detroit: A year in the Motor City

Is reality the next reality show?

The Nature Bar by SCOTTS WORLD
The Nature Bar by SCOTTS WORLD

Time, Inc. bought a house in Detroit:

Why would we ever do such a thing? Because we believe that Detroit right now is a great American story. No city has had more influence on the country’s economic and social evolution. Detroit was the birthplace of both the industrial age and the nation’s middle class, and the city’s rise and fall — and struggle to rise again — are a window into the challenges facing all of modern America. From urban planning to the crisis of manufacturing, from the lingering role of race and class in our society to the struggle for better health care and education, it’s all happening at its most extreme in the Motor City. (Read TIME’s Detroit stories.)

As a story, Detroit has been misunderstood, underreported, stereotyped, avoided and exploited for decades. To get it right, we decided to become stakeholders. Over the next year, we intend to flood the D-zone with journalists, photographers, videographers and bloggers from TIME and TIME.com, Fortune and Fortune.com, CNNMoney.com, Money, even Sports Illustrated. Some will live in the house — dubbed the “D-Shack” after Detroit-area native Kid Rock dropped by with a housewarming gift of a Gothic D (for the mantel) plus a keg of his Badass Beer — and others will stay there while reporting.

Beautiful View - MCS by MikeRyu
Beautiful View – MCS by MikeRyu

With questions such as “How do you survive in Detroit” (below) and What do you love or hate about Detroit answered by city residents and profiles from the Telway Diner’s 85 cent burgers to urban farming supported by the kind of in-depth reporting (and national audience) that one of the world’s largest news organizations can bring, I really think we’ll find Assignment Detroit to be a phenomenal boon for Detroit and all of Michigan.

Be sure to visit Assignment Detroit to watch and read and explore Michigan’s largest city through fresh eyes.

You might also stay tuned to AbsoluteMichigan.com/Detroit for features on the Motor City and definitely check out the Detroit Slideshow from the Absolute Michigan pool on Flickr (most recent).


Report from the 2009 Michigan Downtown Conference

Michigan downtowns, courtesy the photographers of the Absolute Michigan pool.
[iframe http://www.flickr.com/search/groups/show/?q=downtown&m=pool&s=int&w=70057581%40N00 500 375]

Today I’m at the Michigan Downtown Conference in Lansing. This morning I’ll be posting some updates from the conference as I’m able. This afternoon I’m on a panel with Julielyn Gibbons, Ryan Knott and Bigby Coffee co-founder Bob Fish, talking about new media marketing and promoting our downtowns.

capital evening by cmu chem prof
capital evening by cmu chem prof

Downtown Lansing

Flash back to last night at 9 PM. I checked into the Radisson and then went out to walk around downtown Lansing. I spent some time talking to a guard at the city jail about the “vibe” downtown (or lack thereof).   She said that when there are events, the area is humming but that on nights when there’s no planned festivities, it’s ghostly.

Over on Facebook, Bill Palladino noted that in his travels, state capitols are seldom (Austin TX, go get a drink of water)   happening places. Richard pointed out several others that were doing well. In any case, I think there’s something a little sad about a city that is supposed to be the heart of Michigan with shuttered storefronts, perpetually torn up sidewalks and lack of life.

Durant Hotel by detroitsky
Durant Hotel by detroitsky

Dan Kildee, Keynote Speaker

“Our ability to make progress is determined in large part by our ability to work together”

Dan Kildee is the Genessee County Treasurer and director of the Genessee County Land Bank who has worked to use Michigan’s new foreclosure law for community development and neighborhood stabilization. He’s also pretty proud that he drew Rush Limbaugh’s ire for his plan to reduce the size of Flint (and ultimately cities across the country) to reduce their size and increase the ability to deliver services.

Dan notes that even in our terrible economy, it’s easier to build on a green field than to reinvest in our cities. He says that Michigan’s foreclosure system had a large role in creating our downtown problems by setting up a system that rewarded speculators. Now, he says, the system allows cities to treat urban land as if it has value and to apply community values and vision.

He had a very interesting talk in which he looked at the toolbox that is available to Michigan downtowns and some success stories from Flint including the redevelopment of the Durant Hotel in Flint as rental housing for students and young professionals. He notes that 70% of Michigan’s population lives on 8% of the land and that an overwhelming 97% of Michiganians feel that redevelopment in existing urban centers is preferable to building new. With a decent set of tools, he says all that’s missing is a bias on the part of lawmakers and our laws to support this pattern of development.

Lansing Mayor Virg Benaro asked us to close our eyes and imagine when the auto industry was in its heyday and how we built great cities during that time. Now, as the auto industry contracts we are still left with these great cities, but what are we doing to preserve and restore them. He then talked about how East Lansing and Lansing – two one horse towns driven by MSU and the Capitol could be 10 times the city if they worked together. He also called for cities and their surrounding communities to cooperate and build the brand of Lansing, Grand Rapids, Detroit and other cities.

Why Live in Detroit? by Derek Farr
Why Live in Detroit? by Derek Farr

Niche Marketing: Success through creativity and collaboration

A panel with Elissa Sangalli Hillary (Executive Director of Local First in Grand Rapids),
Claire Nelson (Co-Owner & Operator of the Bureau of Urban Living & cofounder (with Liz Blondy) of Open City Detroit) and Liz Blondy (Founder of Canine to Five Detroit Dog Daycare) talking about what they do and how small business can be a driver of vibrant downtowns.

Elissa noted a commonly cited statistic (view graphic) that shows 73% of dollars spent at a local business stay in the community as compared to 43% if you spend your money at a national chain. She discussed some strategies they are using to give small businesses access to pooled advertising and purchasing.

Claire talked about her small business and how Detroit offered an opportunity to start a business that would have been impossible in New York City where she moved from. She talked about the importance of creating a climate that’s business friendly and also – through events and collaboration – draws folks to burgeoning downtowns. She also drew a laugh by noting that small business in Detroit doesn’t face too many threats from national chain stores.

When Liz Blondy came on I lost wireless, making me again think that about the best thing a downtown can do is to deliver a free wireless cloud. She explained her philosophy of focusing on free networking and and promotional efforts rather than exclusively advertising. Small actions like referring waiting customers to another business to pass the time cost nothing and reap big rewards. Wireless is apparently back.

Real Estate Gold Amidst Detroit’s Downturn

Slows by farlane
Slows by farlane

A few weeks ago NPR had an interesting feature titled Despite Tough Times, Some See Opportunity In Detroit that looked at how Detroit’s dramatic downturn has created some amazing opportunities for starting businesses.

Phil Cooley says the city is wide open for new ventures and is tolerant of his mistakes and successes. “It’s lovely to be able to afford to do that here, one, because the community is so forgiving. And two, because it’s less expensive than other places. So it’s affordable,” he says.

Music producer Chris Koltay was drawn to Detroit from Cincinnati by the vibrant music scene and the cheap real estate. He says he knew he could afford a whole building. He found one across the street from Slows for just $38,000. The recording studio is packed with guitars, keyboards and microphones.

Koltay has made a loft in the back of the building and for a year lived there without hot water. “It was gnarly, but whatever. Now I’m golden. And it’s so wide open, and I think that’s beautiful. I’ve never seen a city that has this kind of opportunity for growth, and I think that’s beautiful,” he says.

Check out some Detroit commercial real estate listings from Loopnet, follow the Detroit rebirth via Model D and get links from Absolute Michigan’s Real Estate & Development section for Southeast Michigan.

Investors find real estate gold in Detroit from CNN explores a similar phenomenon in the Detroit housing market.

Flint’s Carriage Town makes a comeback

Electric Blues by Rudy Malmquist
The Mason House c 1872 in Carriage Town by mansardroofsf

The New York Times has taken note of an area in Flint called Carriage Town that is making a comeback due to some industrious and motivated homeowners. In the midst of an otherwise impoverished area and dire economic circumstances these people are taking advantage of real estate deals and restoring the beautiful old homes that make up the area. The article Faded Glory: Polishing Flint’s Jewels also notes that as people move in businesses follow and once again becomes a community.

In a city that is synonymous with faded American industrial and automotive power, Carriage Town’s success is both unexpected and inspiring. A persistent group of long-term urban homesteaders — along with newer arrivals eager to live near a downtown showing signs of life — has restored dozens of Victorian-era houses and buildings in the last 20 years. While many Flint neighborhoods feel all but abandoned, in Carriage Town home ownership has increased 10 percent over the last decade, according to Census data.

In a worldwide recession, development projects with more than $47 million in public and private financing are in progress or recently completed in the 30-square-block Carriage Town area, including the conversion of the derelict Berridge Hotel into lofts and the ongoing renovation of the long-vacant Durant Hotel into 93 apartments and commercial space. There are even plans for a neighborhood grocery store.

But there’s no denying that Carriage Town is a work in progress, and that those who call it home must deal with challenges like speculators, abandoned houses and lack of code enforcement by the cash-strapped city.

For more images of Flin’t Carriage Town check out this slideshow from Flickr…