Royal Oak DDA Interested in Hotel Development on Former Fresard Site

Members of Royal Oak's Downtown Development Authority (DDA) showed interest in exploring the development of a hotel at the former Fresard auto dealership site on Main Street, in which the unidentified owners are looking for incentives or financial assistance.

David Griffin of CBRE, a full-service real estate services company, represents the new owner of the property, a private group doing business as 400 Main LLC. Griffin, who would not reveal the names of the new owners at Wednesday's DDA meeting, said the group purchased the Fresard property a few weeks ago. “They have title to the asset,” he said.

At the end of January, the " and Michael Southen of Signature Associates, a commercial real estate business in Southfield, . At the time, the property was listed for $3.5 million.

The concept

Royal Oak architect Jason Krieger, who is also a DDA board member, presented conceptual plans to the DDA on Wednesday afternoon to provide some context to the proposed development of an eight- or nine-story hotel with a separate restaurant/banquet facility and a five- or six-story apartment building.

The hotel would be located in the middle of the former Fresard site and have approximately 100 rooms, 20 per floor. The first two floors would be public and include a small “hip type” restaurant, a small bar, meeting rooms and a lobby, Krieger said.

The existing auto dealership showroom on the south end of the site would be redeveloped into a restaurant/banquet facility.

The proposed apartment building would be located on the northwest corner of the property. Each of the 40-50 units would be approximately 1,000 square feet. “We see that there is more demand for appropriate downtown living in Royal Oak than supply,” Griffin said.

A parking structure is proposed for northeast corner of the property and would accommodate 330-340 spaces. “We will be able to self-park the site,” Krieger said.

Krieger said he has met with city officials a number of times to take in the city’s concerns regarding landscaping and shielding the parking deck from view.

The team

The actual team members aren’t all in place, such as the hotel operator or a restaurant, Krieger said. "There are partners and owners, but they are still putting together the final team to make the development happen,” Krieger said.

Hotel Indigo is a boutique hotel operator that Krieger said the team really wants. The hotelier’s website says it goes out of its way “to make our neighborhoods easy to discover and appreciate.”

“(Hotel Indigo) really wants to get entrenched into the community,” Krieger said. “So they are seeking actual private operators for the bar. They want this to be more of a Royal Oak place, but with their branding for the rooms.”

There are also “a couple of interested and very qualified operators” for the restaurant/banquet facility, according to Krieger.

Griffin said the immediate reaction of hotel operators he’s spoken to is “they want to be in Birmingham or Ann Arbor,” so there is a bit of an “education process,” he said. “There hasn’t been a new hotel built in this immediate region in over 10 years, so it’s a big stretch,” Griffin said.

Board reaction

Members of the board expressed concern that the owners and operators of the property have not been identified.

“Everybody that has come to us for funding assistance has come to us with the owner of the property, the owner of the project … so we can see eyeball to eyeball who we are dealing with,” Bill Harrison said. “We really need to see who we are dealing with, quite frankly.”

Because the property site seems to be a little bit politically charged, Griffin said he was “coming in peace” to introduce the project and see if DDA members were interested, and if so, moving the discussion along.

The property, which has been vacant since the auto dealership moved to Ferndale in 2008, was the center of a there last summer. Krieger spoke out against the Kroger plan at a June meeting of the Planning Commission, saying, “I think we need to deny this special land use and make them go back and put pen to paper. I think this right here is a quick attempt and I think that we need to set a precedent in the future for better design.”

Not knowing who would be operating the hotel, restaurant and apartments also concerned DDA member Jay Dunstan.

“I think the board is very open to a project when we understand all the variables. The DMC is a good example," Dunstan said of the Detroit-based at Interstate 696 and Woodward on Royal Oak DDA-owned property. "As you well know they were very concise in letting us know each step of the way what they were planning to do before they were even in front of us. We knew who their security person was, the CEO was here."

The DMC has not asked for financial incentives or assistance for its proposed development.

“I am interested in a hotel there, but I am not going to say when the time comes I will say 'yes' to it unless I know a lot more about the operators,” Dunstan said.

Harrison also said he likes the project, but also needs to know more about it.

DDA member James Domanski told Griffin, “I wish you good luck in bringing this project to Royal Oak and not taking it somewhere else."

What’s next?

The conceptual plans were not brought before the DDA to review the actual development, the actual plan or the components of the plan, said Tim Thwing, Royal Oak's planning director and executive director of the DDA. “It’s simply being brought as part of our discussion in looking at what sort of incentives or assistance might be available as part of the project,” Thwing said.

"The intent here is to figure out if the DDA would be interested in helping with this project financially,” Krieger explained. “Financing these things is extremely difficult. So we are trying to pursue every option that is possible.”

Thwing said if the board is not interested in providing assistance the developers would “like to know that today.” If there is no interest, he said the developers would pursue a different venue or go in a different direction.

The developers have a meeting scheduled in the coming weeks with the Michigan Economic Development Corp., which generally requires some sort of local assistance, Thwing said.

Thwing said the developers could have waited another month and been a lot farther along, only to get negative comments, so they came to see if there was interest before working out all the details. Thwing also noted the plans are conceptual and not making any commitments.

While the concept and interest in the project are generally there, the details of how the city can partner with the owners of the property needs to be ironed out.

No dollar amount of assistance was discussed at the meeting and no action was taken. Domanski also noted Krieger would be recused from any voting because he is the architect of the project.