A joint venture between Ferlito Construction Co. of Detroit andMansur Real Estate Services Inc. of Indianapolis is spending $16.9 million torehabilitate the Kales Building in Downtown Detroit into loft apartments.
Brad Egan of Ferlito said his company thinks the project is a great one."We think this will be the beginning of a lot of other projects downtown,for us and other developers," he told GlobeSt.com.Part of the problem with developing in Detroit, he said, is that appraisersdon't have quality buildings to use for comparisons.
"When an appraiser looks here, they need something else in the market. Thecurrent buildings get a low appraisal, causing a large gap in developmentfunding. This project can offer appraisers a comparison, to say that theseare the numbers we achieved, equate the project, and eventually shorten thatgap in the financing," Egan said.
The two companies also got financing help from local groups such as theDowntown Development Authority and the Lower Woodward Fund. Thepartnership's primary lender is MuniMae Midland of Clearwater, FL.The city is also providing funding through an abatement, because theproperty is contaminated and needs to be cleaned up before it is occupied.The site is also being given more than $2.7 million in historical taxcredits, $1.25 million from the Detroit Investment Fund and $400,000 insingle-business tax credits.
The DDA said the project is set to be completed by the end of the year.According to the authority, there will be retail on the ground floor, and atunnel built underground toaccess it. The authority gave the project a $2.5 million loan.
Egan said he hopes people begin moving back into the struggling city, wherecrime and difficulty in city services are a problem."Residents are going to be what bring the city back," Egan told GlobeSt.com."We need people to live downtown, to drive the retailers to start openingagain. This building is perfect for residents, it's close to all theamenities of the city, like Ford Field, Comerica Park and the Detroit OperaHouse."
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