Royal Oak’s Downtown Development Authority says it wants to hear from a four-member ad hoc committee before deciding how much money to kick into a $60 million hotel and mixed-use development at 400 N. Main St.
A recommendation is expected in two weeks, the Observer & Eccentric reports.
“We all want this project to happen, we all know we are going to contribute,” DDA member Mike Sophiea said at a meeting Wednesday. “We just need to sort through this.”
The proposal for the hotel complex at the former Fresard auto dealership site includes the 8-story Hyatt Place hotel, an 8-story apartment building, a five-story building with restaurant and office space, a three-story building with retail sales, a pair of office buildings and a 4-level off-street parking deck.
The development team – which includes Royal Oak-based CG Emerson Real Estate Group, Southfield-based Versa Development, Hotel Investment Services, Inc. (HIS) of Plymouth, T.H. Marsh Construction and Krieger | Klatt Architects, both of Royal Oak – and the city have been working together in "a strong spirit of collaboration" to re-develop the obsolete site and create "something special," Erne said.
The developers have been working with the Michigan Economic Development Corporation (MEDC) to secure funding assistance for the project through the Community Revitalization Program (CRP), which requires strong local participation in order to commit its funding.
"This is really an important part of the project right now," Erne said.
The proposal presented to the Downtown Development Authority is:
The developer is allowed to capture the incremental ad valorem real estate taxes for up to 10 years
The amount of the capture will be capped at $4 million plus interest and carrying costs
The method for the capture will be a Reimbursement Agreement between the Downtown Development Authority and the Developer
The proposal is structured to be no-risk to the DDA.
At Wednesday’s meeting, Royal Oak resident Rick Karlowski said he supports the project, but thinks the DDA is being asked to kick in too much money.
“I don’t know why we have to spend this kind of money to bring businesses to our downtown when you have landlords marketing their storefronts at $42 a square foot,” he said. “We are not in the middle of a battle zone where things are torn down and decrepit.”
DDA member Matt Riley said the amount of assistance being requested is “exorbitant.”
“We have the potential here to get a great new customer,” he said. “But to give away the majority of our profits from that customer for the next 12 years would really stifle us from doing what we need to do.”
The DDA has time to sort out various issues related to its contribution without jeopardizing the project Versa Development’s Greg Erne said, adding he wants to make sure a “true partnership” is developed between the parties.“We know we are going to figure this out,” he said. “Let’s get it done, let’s get it right and let’s commit to working together to get it done and not push it off.”