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Rebuilding Motor City


By Katie Kuehner-Hebert
Once a vibrant industrial municipality, the city of Detroit filed for Chapter 9 bankruptcy in 2013, making it the largest city in U.S. history to do so. In November 2014, a judge approved a plan intended to help Detroit exit bankruptcy and get back on a healthy economic track.

“Detroit used to have the biggest decline in population for any large city, which greatly eroded the tax base, depleting the resources to upgrade the aging infrastructure and schools,” says Ken Simonson, chief economist, AGC of America. “On top of that, the city made excessively generous public pension promises and the bills just came due as employees retired. The overall mismatch of revenue and expenses caused the bankruptcy.”

But as the city rebounds, there is a great deal of construction opportunity, particularly since Millennials and empty nesters from the suburbs are moving to the inner city, and entrepreneurial people are willing to make large investments in both commercial and residential ventures, Simonson says. Moreover, the Big 3 automakers – General Motors, Ford and Chrysler — are on the upswing, which has made Detroit’s prospects even brighter. Now, with dozens of high-profile projects being built and more in the pipeline, AGC member contractors are helping to breathe new life into the city. Indeed, from March 2014 to March 2015, construction, mining and logging employment in the Detroit-Dearborn-Livonia metropolitan division jumped by 18 percent, from 17,100 to 20,100 employees, according to The Bureau of Labor Statistics.

“The city certainly has a very storied history, and it’s rewarding and very exciting to be part of some of the projects that are serving as big catalysts in the revitalization of the city,” says Ryan Maibach, president of Barton Malow Co. in Southfield, Michigan, an AGC of Michigan member. Detroit has been Barton Malow’s home since the company was founded
more 90 years ago, and a primary focus for it during all of those years.

Barton Malow’s most visible and notable project is the Detroit Event Center, which will also be the new home for the National Hockey League team Red Wings, Maibach says. The center, currently being constructed and expected to open in late 2017, is located on nearly 13 acres of land west of Woodward Avenue north of the Fisher Freeway, and will also feature ancillary development that is expected to jumpstart additional redevelopment around the area.

The massive $650 million project is being managed by Olympia Development of Michigan, the real estate arm of Ilitch Holdings, according to Crain’s Detroit Business. Barton Malow is jointly managing the project with Detroit-based White Construction, an Indiana Construction Association member, and Indianapolis-based Hunt Construction Group, a member of multiple AGC chapters. Kansas City-based 360 Architecture is the primary architect.

The 20,000-seat, eight-story arena, with three main entrances and a lower bowl that sits 40 feet below grade, will anchor a 12.37-acre site that includes an adjacent public piazza, residential units and a 1,200-space, five-story parking garage that has one level underground. Also planned is a 37,300-sq-ft below-grade practice ice rink inside the arena, which will be 650,000 total square feet.

The arena is the centerpiece of a proposed 50-plus-block entertainment district that Olympia is also building, according to Crain’s. The plan calls for $200 million, or more, worth of restaurants, bars, retail and housing to the west and south of the arena, creating new mixed-use neighborhoods in the current area around the Fox Theatre and Comerica Park. A widened Woodward Avenue bridge over the Fisher Freeway will be lined with storefront shops for pedestrians.

The district will be linked into the M-1 Rail streetcar project on Woodward.

“Detroit is a self-proclaimed hockey town, and the event center is a big deal here,” Maibach says. “It’s located in an area between downtown and midtown and serves as a bridge between the two neighborhoods. The event center really helps solidify the M1 corridor – Woodward Avenue – running through the middle of Detroit.”

Other current projects for Barton Malow include the construction of the Children’s Hospital of Michigan, Critical Care Tower, and the Wayne State University Multidisciplinary Biomedical Research. Recently completed projects include work at the Detroit Athletic Club; Marathon Petroleum Co.; the Pepsi Porch at Comerica Park; General Motors’ Detroit Hamtramck Assembly; Chrysler’s Jefferson North Assembly and Mack Avenue Engine.

Barton Malow’s renovation projects include DTE Energy’s headquarters, Cobo Center, Chrysler House – Great Lakes Business Center; Boll Family YMCA; Detroit Medical Center – Children’s Hospital of Michigan Specialty Center; and the General Motors Renaissance Center – Marriott.

Detroit’s revitalization is also bringing back a tremendous amount of jobs to the area, and people are moving back to the city from the suburbs, Maibach says.

According to the U.S. Bureau of Economic Statistics, the Detroit area’s unemployment rate at March was 6 percent, just over the U.S. unemployment rate of 5.6 percent, but much lower than the 9.4 percent rate for the Detroit area in March 2014. The urban core in particular is becoming home once again to more people, as the residential occupancy rate in the downtown area was well over 90 percent toward the end of last year, Maibach says.

“It’s become a hub for folks that grew up in the area, and every week you’re meeting people who have moved from other areas of the country to be part of some growing company,” he says.

“Younger professionals in particular are moving downtown because they want to be a part of the city’s atmosphere.”

The Christman Co. in Detroit, an AGC of Michigan member, is on track to break $100 million this year in building projects within the city, says Ronald Staley, senior vice president and principal in charge of Southeast Michigan operations. The regional office handles southeast Michigan, a five-county area, housing more than 50 percent of the state’s population.

“Christman is honored to continue our commitment to AGC’s core values of skill, responsibility and integrity back in Detroit,” Staley says.

The rebuilding of Detroit is definitely considered a great opportunity for contractors, he says. With the uptick in the economy, there are more opportunities in the private sector and new development throughout the region.

“People from around the country and even the world are investing in Detroit,” Staley says.

Similar to residential development, the downtown urban core in particular has been attracting increased attention for commercial development, as many businesses, such as Blue Cross Blue Shield of Michigan, have moved back downtown wanting to see the area “come back to life,” Staley says. “We were the program manager for BLUnite, which helped get our foot in the door.”

Under the BLUnite project, the insurance company relocated roughly 3,000 of its employees to Detroit’s urban core from other locations throughout southeast Michigan. The majority of employees are now housed in approximately 464,000 square feet of space spread over 29 floors in Renaissance Center Towers 500 and 600, leased from General Motors on a long-term basis. The balance is now located at Blue Cross’ existing headquarters facilities, near the Renaissance Center, thus creating a nearly 1.5 million sq-ft single campus in downtown Detroit.

Christman is also helping to renovate and restore several historic office buildings on Woodward Avenue purchased by Quicken Loans’ founder Dan Gilbert, who came back to Detroit, bought seven million square feet of property and “single-handedly reignited downtown redevelopment,” Staley says.

But perhaps the project dearest to Christman’s heart is the renovation of the 26th floor of the historic Fisher Building, in which the company helped build in the 1920s and now has relocated its regional office there, he says. Christman restored the floor’s plaster ceilings and woodwork and inserted a contemporary office.

The Fisher Building is “a masterpiece, with over-the-top marble and mosaics,” Staley says. “Christman is now on one of the floors that the Fisher brothers themselves used.”

The Fisher Building — built by the Fisher brothers of “Body by Fisher” fame — opened Sept. 1, 1928, at Second Avenue and Grand Boulevard, according to HistoricDetroit. org. Once known as the “Cathedral to Commerce,” the 441-ft tower is “decked to the nines in fancy marbles, mosaics, soaring, painted ceilings and a whole lot of brass and bronze.”

Indeed, the National Park Service says that the building, by renowned architect Albert Kahn, is “a superbly designed complex which displays some of the finest craftsmanship in any Art Deco style building constructed in the U.S. in the 1920s.”

While Detroit’s urban core is getting much-needed attention, Staley says, the rest of the city is also ripe for redevelopment, as “there is still plenty of land to build on.” More than half a million people left the city for the suburbs during the last 50 years, which is now creating opportunities for redevelopment throughout the area inside Eight Mile Road, including from new industries such as startup tech companies.

“Younger people are moving to the city as well as empty nesters, and I’m convinced there’s going to be a generation of people willing to buy and fix up older homes, especially because the mayor is offering zero-interest loans and other incentives for existing residents to fix up houses,” he says.

“Moreover, for $100, people can buy empty lots next to their homes if they are willing to maintain the lots. I think there is an opportunity for retail and other development as a result of new residents in the city.”

DeMaria Building Co., an AGC of Michigan member, is also enjoying the opportunities created by the rebound of Detroit, says Tony DeMaria, executive vice president. “Detroit is the epicenter for the state, and as Detroit does well, the rest of the state does well,” DeMaria says. “To the extent we can foster business and growth in the comeback of Detroit, so goes Michigan.”

The history of DeMaria Building Co. goes back to 1969. “We have always been in Detroit, our roots are in Detroit and the city is near and dear to our hearts,” DeMaria says.

“My father and uncle started the company and expanded with another office in Novi, though we still maintain our Detroit office because a lot of our core clients are here.”

One particularly interesting project that DeMaria is helping to build is the Detroit Zoological Society’s Polk Penguin Conservation Center at the Detroit Zoo. According to the nonprofit society, the Polk Penguin Conservation Center represents the largest project the zoo has ever undertaken. One of the most dramatic features of the $29.5 million facility will be a penguin “deep dive” with views above and below water as the birds dive and soar through a chilled 326,000-gallon, 25-ft-deep aquatic area.

“Inspired by Sir Ernest Shackleton’s legendary Antarctic expeditions as well as epic crossings of the Drake Passage, the facility will feature 4-D effects such as arctic blasts, rough waves and snow, and physical elements such as ice crevasses,” according to the society. “The building’s exterior will evoke a tabular iceberg. The habitats will ensure an optimal environment for the penguins’ welfare and encourage wild behavior, from diving and porpoising to nesting and rearing young.”

Conceptual renderings of the Polk Penguin Conservation Center are by architectural firm Albert Kahn Associates, Inc., architects of the Ruth Roby Glancy Animal Health Complex. It’s currently being built on a two-acre site near the Detroit Zoo’s entrance and will open in early 2016.

Other DeMaria projects in Detroit include the renovation and expansion of Wayne State University Chemistry South and the renovation of Chemistry Building North; construction of Wayne State University graduate and faculty housing; Detroit Public Schools Heilmann Park Middle School; the Detroit Economic Growth Corporation Rosa Parks Transit Center; and the Henry Ford Health System Department of Emergency Medicine expansion.

DeMaria is also working on the construction of the Detroit Building Authority Information Technology Services Training Facility; replacement of the Detroit Department of Transportation hydraulic hoist; renovations to the Detroit Medical Center Detroit Receiving OR; construction of the Detroit Medical Center Harper-Hutzel Diagnostic Imaging facility; construction of an addition to Detroit Public Schools Spain Middle School Performing Arts; renovation of the Detroit Recreation Department Belle Isle Conservatory; Ford Motor Land Campus Martius Park; Hines Property Management Texas de Brazil Churrascaria; Thompson Educational Foundation New UPA Elementary Charter School; renovation of the first and second floors of Wayne State University’s Manoogian Building; and ongoing projects for the Detroit Water and Sewerage Dept.