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Small businesses multiply, crime declines along Jefferson Avenue corridor

A recent article in Crain's Detroit Business details the rapid growth of five neighborhoods extending along Jefferson Avenue, stretching all the way to the Grosse Pointe border.

A number of new businesses have opened up along the Jefferson Avenue corridor recently. "Beautiful Bridal, along with a new Caribbean restaurant, a Christian yoga center, women's clothing boutiques, a casual branded clothing store, a used record store, and a coffee shop and bakery, are a few of the more recent businesses that have planted roots along the eight miles between downtown Detroit and Grosse Pointe Park," writes Marti Benedetti.

Some significant numbers accompany these developments. The most salient is the approximately $1 billion in new investment since 2009.

Also notable, writes Benedetti, "Since 2014, crime along the Jefferson corridor declined more than 31 percent. In 2015, there was a 38 percent drop in auto theft and a 22 percent reduction in robberies, according to JEI's 'Safe Jefferson' program."

In addition to new businesses, several apartment and housing developments are finished or underway. Lakewood Century Apartments, for example, is a $7 million, 35-unit project at Lakewood and Jefferson—no opening date was mentioned.

There's also the Jefferson streetscaping, which will include the first protected bike lanes in the city.

Josh Elling, Executive director of the economic development organization Jefferson East, Inc., credits economic development in Detroit's greater downtown area, as well as "business-supporting" institutions, for the economic spillover taking place in the Jefferson corridor.

Next High Growth Happy Hour focuses on real estate

Detroit's rapidly fluctuating real estate market has no shortage of entrepreneurs breaking into it. There's an opportunity to hear from two fast growing local startups at the next High Growth Happy Hour, August 3rd from 6 to 8 p.m., in Detroit’s North End neighborhood.

The speakers will be David Alade of Century Partners, a real estate development company with a holistic revitalization and innovative funding approach, and Max Nussenbaum, CEO & co-founder of property management startup Castle (read Model D's profile on Castle and their rapid growth). David and Max will share insights into Detroit's real estate market, including how they have broken in and created a new model for their businesses.

Agenda

6:00 - 6:30: Networking & Drinks

6:30 - 7:30: Casual chat and Q&A with attendees

7:30 - 8:00: Networking

RSVP here to attend. Space is limited for this free special event. Drinks and light appetizers will be served, and you’ll also get to be the first to see a brand new space Century Partners is redeveloping into a restaurant at 9425 John R Rd., Detroit.

Learn more about the High Growth Happy Hour series, which connects entrepreneurs and inspires them to scale in Metro Detroit.

Subscribe to our sister publication Southeast Michigan Startup to follow more companies scaling in Detroit.

Final year of NEI's challenge to grant local businesses a total of $500K

On April 20, the New Economy Initiative (NEI) kicked-off the third and final year of the NEIdeas challenge, "a two-tiered challenge awarding $500,000 to existing small businesses in Detroit, Hamtramck, and Highland Park for their ideas to grow," as described in a press release.

The half-a-million dollar sum is divided into two grant tiers. For businesses that gross under $750,000 annually, NEI will award 30 grants worth $10,000. And for businesses that gross between $750,000 and $5 million annually, NEI will award two grants worth $100,000. Applying is as simple as explaining, in 500 words, an idea to expand your business that requires investment and is "impactful, courageous, interesting, achievable, and understandable." The application deadline ends June 1.

A key component of the NEIdeas challenge is that these grants are for existing small businesses -- those three years or older. So much reporting and grant-giving is devoted to new businesses that it's refreshing when a challenge like this rewards established businesses that haven't benefited as much from renewed interest in Detroit entrepreneurship. 

"This is a really special challenge that has had an incredible impact on local businesses and communities," says NEI communications officer Matthew Lewis by email. "In fact, we think NEIdeas is the only philanthropic challenge in the country that directly awards small businesses for their contributions to neighborhoods."

Past winners include Goodwells Natural Foods Market, which invested their reward in growing their inventory and marketing services for new bulk herbal apothecary offerings; The Hub of Detroit, which made improvements to the appearance of its storefront; and many, many more. They also released a fun hype video featuring some of those past winners

NEI will hold a series of informational events throughout May to help applicants. The next one takes place on May 4 at the Matrix Center in Osborne on Detroit's Northeast side. Click here for a complete list of those events.

NEI is a philanthropic effort that supports small businesses and entrepreneurs. It's funded by a host of foundations and institutions, and, since 2009, has awarded over $96 million in grants.

Disclosure: Matthew Lewis is a former managing editor of Model D. 

Foreign billionaires are on a Detroit real estate buying spree

 
Dan Gilbert, local billionaire and downtown's most prominent investor, famously cited a "skyscraper sale" as motivation to begin adding downtown Detroit properties his portfolio in 2007. Gilbert founded Bedrock Real Estate in 2011, and that company now owns over 70 properties accounting for over 11 million square feet of space in the city's central business district. Adding to that portfolio may not be as cheap as it once was, however, as foreign investors take interest in Detroit real estate.
 
In 2013, Fernando Palazuelo, a Peruvian billionaire of Spanish extraction, made some of the biggest headlines in Detroit real estate when he purchased the Packard Plant, an infamous, 3.5-million-square-foot industrial ruin on the city's east side that has been abandoned for half a century. He revealed some of his grand plans for the site in a February 28 feature in Crain's Detroit Business.
 
Now Crain's is reporting that one of the richest men in Mexico, Carlos Slim Helú (net worth approx. $77 billion) has purchased the Marquette Building, a 115-year-old, 164,000-square-foot vacant office building in downtown Detroit.
 
Crain's Kirk Pinho writes, "Nico Gatzaros, managing partner of Detroit-based 400 Monroe Associates LLC and son of the late Greektown Casino-Hotel developer Ted Gatzaros, whose estate sold the building to Helú, said offers from 'all over the world' were made on the building."
 
On April 7, Pinho once again broke a story of large-scale foreign investment in Detroit real estate when he tied the purchases of 31 Detroit properties to Jimmy Lai, a Hong Kong tycoon.

For more breaking news on foreign investment in Detroit real estate, follow Pinho's writing for Crain's Detroit Business.

 

Is the development craze in Midtown spreading to nearby Milwaukee Junction?


In a longform piece for Bridge Magazine, veteran Detroit journalist Bill McGraw takes a deep look at Milwaukee Junction, an old industrial district that is quickly attracting the interest of local real estate developers.
 
Home to Ford Motor Co.'s original factory, The Ford Piquette Area Plant, Milwaukee Junction was one of the city's most productive industrial areas in the first half of the 20th century. "At its peak in the 1940s, some 33,000 people worked in Milwaukee Junction, and there were 33 heavy manufacturing plants," write McGraw.
 
Though its former glory as an industrial hub of Detroit has mostly faded (it's still home to a handful of industrial businesses), McGraw describes a growing interest in the neighborhood by real estate developers. Currently, the area only has a small amount of housing, but McGraw sites its proximity to other quickly gentrifying Detroit neighborhoods like Midtown and New Center, as well as its closeness to the under-construction M-1 Rail line, as reasons for its imminent development.
 
Think Milwaukee Junction is Detroit's next hot neighborhood?
 
Read more in Bridge Magazine.

Packard Plant developer outlines grand plans for Detroit

Peruvian developer Fernando Palazuelo made big headlines in 2013 when he purchased the long-abandoned Packard Plant on Detroit's east side. The property, which consists of 47 buildings and spans 40 acres, is perhaps the most daunting re-development project in all of the city of Detroit, which is saying a lot. Nonetheless, Palazuelo appears to be moving forward with plans for the massive ruin. According to Crain's Detroit Business, he has retained an architecture firm (Albert Kahn Associates) and a general contractor (O'Brien Construction Co.) to begin work on the rehab of a 150,000-sq-ft administrative building on the Packard property.

According to the same Crain's piece, however, those plans represent only a fraction of Palazuelo's Detroit ambitions:

"[Palazuelo] said in an interview with Crain's last week that he plans to make offers to buy five of greater downtown's most storied buildings: the 255,000-square-foot Book Tower and adjoining 260,000-square-foot Book Building; the 996,000-square-foot Penobscot Building; and the Albert Kahn Building and Fisher Building in the New Center Area, which total 925,000 square feet."

The Peruvian developer claims that he has the backing of a Lima-based private equity firm with over $500 million in assets.

Read more about Palazuelo's Detroit plans in Crain's Detroit Business.

Rocket Fiber, a super-fast fiber Internet service, coming to downtown Detroit

If you're just learning about Dan Gilbert's proposal to outfit the greater downtown area with hyper-fast fiber optic Internet service, you're probably connecting to the Internet with a dial-up modem. (For you youngsters who have no idea what "dial-up" means, read this.)
 
According to Crain's Detroit Business, Gilbert's spokespeople have confirmed their plans to launch Rocket Fiber, an "advanced fiber-optic Internet network that will serve residents, local government and businesses in and around downtown Detroit," providing them with connection speeds that are over 100 times faster than what is currently available.
 
According to Crain's, Rocket Fiber's network "originates west of downtown Detroit, and the initial scope covers the central business district from M-10 to the west, I-75 to the north, I-375 to the east and the Detroit River to the south." Eventually the network will be expanded to other areas of the city. More details on roll out of the service to come.
 
Read more in Crain's Detroit Business

Mayor Duggan sites 20 to 40 percent affordable housing goal in downtown, Midtown areas


The Detroit Free Press's John Gallagher reported last week that Mayor Mike Duggan's administration is pushing developers who are receiving public subsidy for projects to set aside 20 to 40 percent of new units for lower-income renters.
 
The Free Press quotes Duggan saying:

"We are, on a project-by-project basis, going to negotiate as much as we can commensurate to our contribution, but I would like to see 20% to 40% affordable housing mix in everything that we support because great cities include everybody.
 
"As we rebuild the housing in this city, we're going to make sure everybody can live there."
 
Duggan's comments were made at a media event celebrating the coming renovation of the vacant Strathmore Hotel building on Alexandrine in Midtown, where 40 percent of the housing units will be reserved for low-income renters.
 
The mayor's comments come in the midst of an ongoing conversation about gentrification in Detroit, particularly its downtown and Midtown neighborhoods, which have experienced a remarkable uptick in new residential and commercial developments in recent years.
 
Read more in the Detroit Free Press.
 

Punch Bowl Social, a boozy adult playground, opens on Broadway


There's nothing subtle about Dan Gilbert's Z Lot, a massive, zig-zagging parking structure built to wrap around existing historic structures and fit a uniquely-shaped downtown Detroit parcel. So it seems that the massive adult playground that is Punch Bowl Social is the perfect fit for the ground-floor retail component of the Z Lot along Broadway.
 
"When you're on Broadway in any city, it should be like this," says Punch Bowl Detroit's event sales manager Jason Dritsan.
 
A massive crowd that turned out for the grand opening of Punch Bowl last night seems to agree. It appears that Detroit is ready for the 24,000 square feet of games (including bowling, darts, and arcade classics), drinks, and food that Punch Bowl is offering.
 
The Punch Bowl concept was launched at the company's flagship location in Denver. Detroit is the fourth Punch Bowl location, following the likes of Portland, Ore. and Austin, Texas. Representatives of the Quicken Family of Companies helped recruit Punch Bowl to Detroit.
 
"We spent three hours with them before we were ready to do the deal," says Punch Bowl founder and CEO Robert Thompson. "There's a great culture here that we wanted to be a part of. There's a tremendous amount of economic upside. We officially drank the Kool Aid."
 
For those who couldn't make it out to Wednesday's grand opening, here are a few things to look forward to on your first trip to Punch Bowl Detroit:
 
- A classic style diner featuring "adult milkshakes" (that means with booze, folks) and classic American-style fare.
- A 360-degree bar at the center of the ground floor, featuring a unique drink menu including delicious punch concoctions.
- Two levels of games, including bowling, darts, ping pong, shuffleboard, and classic arcade machines.
- Detroit's first private karaoke rooms.
- A year-round "Holiday Lodge" room featuring fireplaces and chill sofas.
- DJs on weekends (Full disclosure: Model D's managing editor Matthew Lewis will be spinning records at Punchbowl's Sunday brunch on Dec. 14).
 
It's going to be a fun holiday season.
 
---
Photo by Matthew Lewis.

Explore the impact of the New Deal on Detroit

Between 1933 to 1943, President Franklin Delano Roosevelt's New Deal had a monumental impact on cities and communities across America. "A constellation of federally sponsored programs put millions of jobless Americans back to work and helped to revive a moribund economy. The result was a rich landscape of public works across the nation, often of outstanding beauty, utility and craftsmanship," notes the Living New Deal project hosted by the Department of Geography at the University of California, Berkeley.

Of course, Detroit, the "Arsenal of Democracy," was no exception.

Today, the Living New Deal "is building a national database of thousands of documents, photographs, and personal stories about public works made possible by the New Deal." Check out this amazing map of New Deal projects across the country and in U.S. territories.

Currently, the Living New Deal lists only four projects within the city of Detroit, though it's likely many more exist.

Those projects are:The Living New Deal project acknowledges its incompleteness and urges users to contribute to its database. If you know of other New Deal projects in Detroit, you can submit them to the Living New Deal project by completing this form.

Detroit man claims he's the high bidder on $3M bundle of 6,350 properties in county auction

As the Wayne County Treasurer's annual auction of tax-foreclosed properties winds down -- or up, depending on who you ask -- information has emerged on what might become the largest purchase of tax-forclosed property in the history of the auction.

According to the Detroit News, Herb Strather of Detroit is claiming to be the leader of a group of investors who bid over $3 million on a bundle of 6,350 of properties in the city. The bundle represents over one third (and the most dilapidated, at that) of the over 18,000 properties available in this year's auction, the largest of its kind in the world.

According to The News:
 
"Wayne County Treasurer Raymond Wojtowicz, in collaboration with Mayor Mike Duggan, bundled the properties in hopes of discouraging tax deadbeats. If no buyer came forward, the Detroit Land Bank was expected to take the homes, demolish the rundown ones and auction those that are salvageable to qualified bidders."

The minimum bid for the bundle of properties was set at $3.175 million. Currently a single bid of $3,183,500 has been placed. While the county will not reveal the identity of the high bidder until after the auction, Strather has claimed to be the person who placed the bid.

The News writes:

"About 2,000 of the properties in the bundle are vacant lots and 3,000 need to be razed, said Chief Deputy Treasurer David Szymanski. Another 1,000 are considered salvageable homes."

For more information, visit the Detroit News.

Study questions inclusivity of revitalization efforts in Detroit


The revitalization of Detroit -- or at least certain parts of the city -- makes big headlines these days. But local data analyst and blogger Alex Hill argues that African Americans are largely left out of such narratives in part because they are under-represented in programs focused on the city's revitalization -- despite the fact that the city's population is almost 83 percent black.

According to Hill, "Detroit’s revitalization is completely one-sided. The surge in investment in this majority black city is not going to black residents."

Hill analyzed participation rates of different racial and ethnic groups in nine revitalization-oriented programs in Detroit (Disclosure: Urban Innovation Exchange, a project of Model D's parent company Issue Media Group, was included in his study). He concluded that "across all of the programs, 69.2 percent of individuals were classified as White and only 23.7 percent as Black (1.6 percent Latino, 4.8 percent Asian, 0.7 percent Arab)" and that "it is clear that there is a serious imbalance of both opportunity and outcomes in Detroit."

While Hill admits his calculations are based on his own "assumptions and perceptions of race" (his numbers were determined by examining "headshots from individual biographies posted publicly on fellowship programs, academic profiles, and many 'About' pages" on the websites of different revitalization-oriented organizations), his study may be the first attempt to quantify the representation of different races in Detroit's revitalization efforts.

Hill concludes his blog post about his study by asking a provocative question: "Mayor Duggan has said that every neighborhood has a future, but does every neighbor have a future in Detroit?"

Visit Alex Hill's website to read more about his study.

Berliners want to invest in Detroit, but you already knew that because you read Model D


Berliners want to invest money in Detroit. Big news, right? The Wall Street Journal thinks so. They recently ran a story about how Dimitri Hegemann, owner of Berlin electronic music label and club Tresor, is in love with the idea of opening a techno club in Detroit's long-abandoned Fisher Body 21 plant.

As quoted in the Wall Street Journal, Hegemann had this to say: “Fisher Body is my first real love.”

Of course, if you read Model D, this isn't really news to you at all. Walter Wasacz, Model D's former managing editor and a frequent contributor, worked with Hegemann to put on "The Detroit-Berlin Connection," a forum that happened in conjunction with the Movement Electronic Music Festival on Memorial Day weekend. (Check out Wasacz's recap of the forum.) Wasacz recently traveled to Berlin to partake in the Atonal Festival, of which Hegemann is the founder, and wrote this reflection on what Detroit can learn from Berlin.

Also, in case you missed it, be sure to check out our Q&A with Dimitri Hegemann from back in May.

Model D will continue to follow developments in this story.

How Detroit grew around Hamtramck and Highland Park


If you have studied a political map of Detroit, you've probably wondered how the city ended up with two separate cities inside of it. Thankfully, WDET has explained how the cities of Hamtramck and Highland park came to be surrounded by the city of Detroit.

According to WDET:
 
As Detroit’s population grew, so did its landmass thanks to annexation. Surrounding townships didn’t have a local government and only existed for election and property tax purposes. So cities could easily swallow up them up. By 1891, Detroit had annexed its way to the modern day southern borders of Hamtramck and Highland Park. 

An encroaching Detroit spurred the areas to take action. And to strengthen local government, Highland Park incorporated as a village in 1889 and Hamtramck two years later.

 
When the state of Michigan passed the Home Rule Cities Act in 1908, Hamtramck and Highland Park were able to incorporate themselves as cities, thus protecting the economic interests that had grown within their borders.
 
By the time the Home Rule Cities Act was introduced, Henry Ford had already purchased land in Highland Park to build his Model T complex. The Dodge Brothers were two years away from opening the Dodge Main in Hamtramck. And as 1915 rolls around, Detroit started moving north again, annexing more and more of Greenfield and Hamtramck townships. Within a year, Detroit had completely surrounded the villages. 
 
At around the same time, the two villages exploded in population, thanks to the auto industry. This growth was enticing to Detroit. There had been formal attempts by Detroit to annex Highland Park and Hamtramck after 1908 but they failed to even make it to a vote. Why? Lupher says the answer is simple. Corporate power.
 
Read more about the origins of Hamtramck and Highland Park at WDET.org.

Senior housing at risk in revitalization of downtown and Midtown Detroit

Downtown and Midtown Detroit are in full-tilt development mode as rental occupancy hovers just below 100 percent and rent prices near the magical $2-per-square-foot over which housing developers and landlords drool.

While these numbers are welcome news to many, they come at a cost to some of the most vulnerable residents of downtown and Midtown Detroit: senior citizens. According to a story by MLive Detroit's David Muller, senior housing complexes in those neighborhoods are threatened by the desire of developers to convert them into market rate apartments.

A group of Metro Detroit housing experts called the Senior Housing Displacement-Preservation Coalition recently issued a report saying, among other things, that "at least a dozen senior apartment buildings in Detroit's Midtown and downtown areas could convert to market rate apartments in the next 10 years, forcing thousands of seniors to find new homes."

The coalition formed in response to the of the death of a senior in his apartment at 1214 Griswold after he and other tenants received eviction notices so that construction could begin to convert the building from senior housing to market rate apartments. 1214 Griswold's developers, Broder & Sachse Real Estate Services, Inc., are renaming the building "The Albert" and marketing its redeveloped apartments towards young professionals who want to live in downtown Detroit.

The MLive story (a part of Aging Together, a collaborative effort of MLive Detroit, WDET FM, and Model D that examines issues around aging in metro Detroit) raises questions about what measures can be taken to ensure the inclusion of seniors and other vulnerable residents in visions for a revitalizing greater downtown Detroit.

Read more on MLive Detroit.
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