Renovating
the charred remains of the Forest Arms apartment building seems a
foreboding task. But that's not stopping Scott Lowell and his team from
bringing what is arguably Midtown's most beautiful apartment building
back to life.
The plans call for gutting the 100-year-old
structure to create about 70 apartments and space for at least two
businesses. A number of environmentally friendly features will be
incorporated into the project, including solar panels. Lowell and his
partners will spend about $9 million to breathe new life into a
building that burned a year ago and has gone through two freeze-thaw
cycles since that time without a roof. It's a feat that would be much
harder, if not impossible, without Michigan's newly expanded tax
credits.
"They make the Forest Arms possible," Lowell says.
"They're essential for any development project beyond a certain size,
such as a single-family home."
Banking on historySuch historic tax credits have played major roles in some of Detroit's biggest job-creating economic developments, such as the
Book Cadillac
and Fort Shelby hotel renovations. They are a key part in the plans to
save part of Tiger Stadium, Grand Army of the Republic (GAR) building
and countless other projects that have grabbed a few headlines in
Detroit.
"(The tax credits) will have a big impact on stimulating development," says Abraham Kadashin, principal of
Kadushin Associates Architects Planners,
an Ann Arbor firm that has worked on a number of renovation projects in
Detroit. "It will be a big help in renovating Detroit's building stock."
Michigan
has had tax credits for renovating historic properties for years. These
state tax credits could pay for up to 20 percent of a project's costs.
There are also federal tax credits that could compensate for another 20
percent. However, Michigan's old law said developers could only combine
the two for 25 percent of a project's total costs.
The new
historic tax credits law -- passed late last year and sponsored by
former Detroit Rep. Steve Tobocman -- allows developers to stack both
state and federal tax credits so they can add up to 40 percent of the
project's total cost. Add in brownfield tax credits (buildings that
have become "obsolete" because of their age can qualify) and, simply
put, about half of the project's total costs can be recouped by the
developer.
"For the developers that are using them, it's a
boon," says Blair McGowan, a prominent local preservationist and
developer. "Frankly, it's a gold mine if you have an older building in
an older community."
McGowan is an expert on utilizing these tax credits. He has restored a number of
historic buildings
into well-known viable businesses, such as Clutch Cargo's in Pontiac
and St. Andrew's Hall in downtown Detroit. His latest project, the
Crofoot in downtown Pontiac, used a number of these tax credits to turn
a historic building about to meet the wrecking ball into Metro
Detroit's newest concert venue.
"If you have a historic
renovation, you have 50 percent of it paid for not by the city or the
Detroit Economic Growth Corporation (
DEGC), but by the federal and state government," McGowan says.
Old trumps newThis
makes "rebuilding old" more attractive than "building new" when it
comes to the bottom line. Most of Detroit's recent home runs when it
comes to economic development have involved doing something with older
properties.
The
rebirth of the Book Cadillac Hotel has grabbed the most headlines, but
there is also the Fort Shelby Hotel, Kales Building, Guardian Building,
Lofts@Woodward, Cheli's, Gem Theater, Iodent Building and the building
that houses Park Bar and Cliff Bell's. And there are more in the works.
All of the movie studios planned for the area involve reusing existing
buildings.
"There is huge value in these old buildings," McGowan says.
In
the meantime, the lots where Hudson's, Madison-Lennox, Statler Hotel,
Wolverine Hotel and Motown headquarters once stood still stand vacant
and in most cases blighted. The Detroit Downtown Development Authority
is working with the Ilitch family to raze even more buildings in
Foxtown to make way for more surface parking lots for future
development. The Detroit Economic Growth Corporation is also looking at
tearing down the Lafayette Building.
This
all raises the question: Is there more economic opportunity in shopping
around a unique historic property or creating another vacant lot in a
city overflowing with them?
McGowan chalks such behavior up to
local officials, landowners and developers unwilling to step out of a
comfort zone where the conventional wisdom says build strip malls on
cornfields instead of restoring storefronts in city centers.
"There
are developers and city officials that are unable or unwilling to use
the tools the government and legislature made available to them,"
McGowan says. "Why they do it, I don't know."
The Forest for the treesWould
something be built where the Forest Arms now stands if it were torn
down? Maybe, because of its proximity to Wayne State University. But no
new buildings are being built in the neighborhood, not counting
university projects.
"New construction, I don't see it," Lowell says.
And
why would the university be interested in building something right away
on the Forest Arms site when it already owns a bevy of surface lots
that already are in line for redevelopment? And what would another
vacant lot do for a community trying to recreate itself as dense,
vibrant and urban?
"I think when you knock down a building, it's
equivalent to knocking out one of your front teeth," McGowan says.
"When people look at you, they might like that you're smiling but (they
notice) something is obviously missing."
Michigan's new historic
tax credits are partially aimed at helping prevent the creation of such
holes in the urban fabric. They're also meant to help spur more
investment and job creation. Renovation projects create many more
permanent jobs than the few temporary jobs created by demolition.
Plus, who is to say a new apartment building built in place of the Forest Arms would be as valuable to the community?
"Would
it be possible to level the Forest Arms and build new? Maybe," Lowell
says. "But you wouldn't have the historic tax credits to use if you
did."
Jon Zemke writes for Model D,
metromode and
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Photos:
- Scott Lowell in front of the Forest Arms apartment building
- A roofless Forest Arms exposes the damage caused by fire
- Blair McGowan
- A historic photo of the Forest Arms can be viewed as you walk into the Traffic Jam & Snug restaurant in Midtown
- The Lafayette bldg sits on Michigan Ave, across from the newly renovated Book Cadillac Hotel
- Scott Lowell in the Forest Arms apartment building
Unless noted, All photographs by Detroit Photographer Marvin Shaouni Marvin Shaouni is the Managing Photographer for Metromode & Model D.