The Young & Entrepreneurial: Q&A with Elevator Building developer Randy Lewarchik

An old, rusted, steel door on the side of the Elevator Building bears a spray-painted skull and crossbones and a warning: "Beware. If you value your life as much as we value this building don't [insert expletive that rhymes with luck] with it."

That comes courtesy of Randy Lewarchik and his construction crew, who are turning what was once a crumbling industrial building into a place of business that is both state-of-the-art and a piece of art. The century-old structure on Franklin Street in the East Riverfront area was built at a time when the old economy was new. This reinvention promises to make the Elevator Building a new economy hub once more when it opens this fall. Half a dozen entrepreneurs and start-ups like M1/DTW have already signed on, and there is space for more.

It's all thanks to Lewarchik, a 30-something developer who sees opportunities in Detroit, and like any good investor, he is putting his money where he sees potential. He sat down with Model D to discuss the Elevator Building project.

Q: The Elevator Building project took an old industrial building along the riverfront and refurbished it into cost-effective office space for small businesses. This doesn't sound like the soundest business plan when office space vacancy in Metro Detroit, and the city of Detroit especially, is hovering at record high levels and there are huge inexpensive options like the Russell Industrial Center. But you have been able to make it work. How have you been able to accomplish that?

A: It has been a risk, which any development always is. We differentiated our offering with these big wood beams, and the actual structure itself is unique and gorgeous and 102 years old. Our pricing is still very comparable to Russell, but our location is nicer. It's just great being down here near the river and the downtown. You can access just so much right here. We're going to have a great community here.

Q: You're in the business of helping small businesses grow. Are you more of a believer in traditional fertilizers like lower taxes and less regulation or in newer growing techniques like TechTown business accelerators and government-run microloan funds?

A: I am definitely of the ilk that there should be an interplay between public and private. Good government is absolutely necessary to foster and direct the development of the country whether it be technology or universities or research and development. There are a lot of things that take a lot of gestation to form and they need government help to get past that gestation period where it's going be a little bit of time before they reach profits. Some of them will fail and some of them will pop. And when they pop it can be a whole new industry.

Here at the Elevator Building we got a grant for a piece of it. It was only a chunk of the overall development costs but it really did help. Would it have been possible to get the finish line without that? I don't know. These small businesses are not wasting that money. We certainly didn't waste our grant. I know the rest of them. They are smart folks trying their best to make whatever endeavor they are going after as successful as possible. Whether its their own money whether its a loan or a grant or low-interest loans from the government, they are trying their darnedest to make it work.

Q: You have said the building once served as a bootlegging hub for Detroit's infamous 1920s gangsters: the Purple Gang. How do you know this?

A: The title from years back shows it was owned by a group out of Chicago. There is a lot of hearsay from the people I bought it from and the neighbors. Some of these neighbors, like Hayes Grinding, have been here for nearly a century just chugging along. A lot of these buildings were used for bootlegging, and apparently the Purple Gang used this and the neighboring building for bootlegging.

Q: You also renovated and now run an apartment building in Midtown. How did you end up going from that project to the Elevator Building?

A: The joy and fulfillment I get from seeing a home or a building slowly go from a cold, dark shell to the lights being on, and seeing the bustle and the activity of fixing it up. Getting it to the point where people can move in and watching their lives intertwine with that structure that was devoid of life before is definitely what keeps me going. I bought before the market collapsed. The opportunities are 10 times better now than when I bought in. The payoff will definitely come. I believe in this city.

A: What inspired you to redevelop property in the city?

Q: Detroit is such an enormous place, but it's a little village to those of us who live down here. You go to the bars and restaurants and we have our canyons of glass and steel and buildings, but the population that resides in the urban core is about the size of a village. I love that atmosphere. The energy level and enthusiasm of the folks down here who want to make a difference and see the potential is really exciting.

One of the things that connects me here is that the stage is just huge. I ran into a businessman from Italy. I told him I was from Detroit and what I was doing here, and he knew so much about Detroit. I don't think you can say that about any other Rustbelt city -- I hate that term. Can you say that about Cleveland, Pittsburgh, Toledo or any other nearby cities? No. No one is moving to Michigan to be in our suburbs. There are no young people coming to Metro Detroit to live in the suburbs.  

Q: The words Detroit and demolition have gone hand in hand. You have turned that bit of conventional wisdom on its head with projects like the Elevator Building. Did you set out to do that, and if so why?

A: I don't completely buy it when people say it costs more or the same to redevelop an existing structure. There is value in those bricks and that mortar and those I beams that were set in place and the floors that were laid. That's labor and materials that were paid for a long time ago. Whoever paid for it is long gone and those notes are long gone. ...

It's really expensive to demolish buildings. It's not a cheap process. It should really be rethought by some people, a collection of people who have had success redeveloping structures. This building would be three times as expensive to start from scratch and make this building than it would cost to refurbish it. More than anything the city should provide tax breaks or incentives or in lieu of taxes, because taxes are very high in Detroit, to do shell and core work.

Q: If you were crowned King of Detroit and given a limitless budget tomorrow, what would you do with the Michigan Central Station?

A: That's such a iconic building. It's so symbolic for Detroit. It can be modified. It's cheaper to modify a building than to build new. I'd love to support mixed-used. I'd love to see some residential, some office, some retail, some shops in the ground floor area. I'd love to see some incentives for those mid-rises nearby. One building sitting alone cannot be an island unto itself. There needs to be part of a community, a web of life that self reinforces it. It needs to be woven into the fabric of the community. I wouldn't stop at that building. I would create enough momentum for the neighboring buildings and go from there.

Q: What advice would you give to someone who wants to invest their time and money in the city?

A: I invite people to invest in all of Detroit. But if it was someone I cared for, like a family member or a friend, and I wanted to give them the best advice I could, being brutally honest, I would say: Go to the core. Try to be as close to it as you can. Be as close to a walkable area as you can. If you're thinking of buying for the long-term and you're looking for appreciation, then I would try to focus on the urban core as close to a walkable, mixed-use area as you can get. I would say that anyone investing in Detroit or Chicago or any state in the nation.

Jon Zemke is a reporter with Model D and its sister publications Concentrate and Metromode. He conducted and condensed this interview in the Elevator Building while a a half dozen construction workers harnessed jackhammers and let hammers fly. Send feedback here.

All photographs © Marvin Shaouni Photography
Contact Marvin here


On the rooftop of the Elevator building, Randy Lewarchik


Second floor office spaces during renovation

Elevator bldg exterior

A friendly warning

MCS reflects behind Randy Lewarchik

Read more articles by Jon Zemke.

Jon Zemke is a news editor with Model D and its sister publications, Metromode and Concentrate. He's also a small-scale real-estate developer and landlord in the greater downtown Detroit area.
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