Is Pontiac on the cusp of a development boom?
A $300 million-plus plan to bring more than 1,000 residential units to a long-vacant waterfront site in Pontiac is perhaps the splashiest proposed development in the city in recent memory.
But throughout the city, a grab bag of new residential, commercial and industrial construction, as well as renovations and redevelopments, has percolated in recent years.
They range from the ambitious Shores at Crystal Lake apartment development proposed by South Florida-based SK Investments Group and a large industrial/warehouse project by Flint Development called Oakland Logistics Park, to projects like the $40.3 million renovation of the Carriage Circle Apartments and the reconstruction of West Manor Senior Apartments on South Paddock Street.
Yet, big questions remain for Pontiac, the county seat that has struggled for years after automotive disinvestment and other issues sent the city of about 60,000 teetering on the brink of bankruptcy a decade ago as it fell under the thumb of a revolving door of emergency managers.
Among the questions: Once the Woodward Avenue Loop is redone as a two-way road, how will Pontiac’s downtown core emerge after decades of being strangled off from traffic by the thoroughfare?
How will the city’s drawn out process for instituting medical cannabis rules impact the central business district, where up to five licenses can be issued to retailers after perhaps as many as two dozen storefronts had been optioned for the use, fraying the downtown real estate market?
How will the rise of United Wholesale Mortgage — the largest employer in the city after relocating there from Troy several years ago — shape Pontiac’s future?
How long will the honeymoon period last for a brand-new mayor and city council, which developers so far have said operate in a more collaborative fashion than in years past?
Time will be the judge.
A downtown revival?
Developers see the area as one with a lot of upside — if projects can get out of the ground.
For example, a planned overhaul of the roughly 185-foot Oakland Towne Center building at 28 N. Saginaw St. — the city’s tallest building — calls for a $10 million to $12 million conversion into about 75 apartments. Financing has been identified but not yet finalized, said Dalen Hanna, a Birmingham attorney who is spearheading the effort.
But it’s a chicken-and-egg situation, in many ways.
Downtown lacks not only a critical mass of residents but also jobs outside of the McLaren Oakland Hospital.
So which is the first dam to give way?
“The biggest challenge is having a true downtown employer,” Hanna said.
It could have been different.
Years ago, UWM had explored a purchase of the Ottawa Towers buildings downtown for its new headquarters that would have been a jolt of energy to the central business district but ultimately opted for a South Boulevard location that has been growing substantially.
Mat Ishbia, UWM’s president and CEO, has said the layout in those buildings weren’t conducive to UWM’s needs, and the attached Phoenix Center parking garage didn’t give them parking flexibility to expand. Today, the company has close to 2 million square feet and 200 acres.
After a lawsuit and real estate deal, those buildings are now in the hands of developer Tarik Dinha, who has been active in the Southfield office market in recent years.
Soon, he says he will be painting the two buildings, scrapping their dated color. One of the towers has been accumulating tenants, including Oslo-based The Hatchery, and the other is being eyed as a multifamily conversion into about 150 apartments. Dinha said he is working on financing for that possible project.
He’s betting, in part, on a logjam in the downtown retail market. He said the central business district hasn’t seen as much action as others because five of every six of the empty retail storefronts downtown were tied up by cannabis speculators.
“Someone has a building worth $300,000 and a cannabis person says they’ll give you $1 million if they can get a license,” Dinha said. “Do you want to throw your lottery ticket away before the drawing?”
‘Open for business’
Among those who have sought to capitalize on the fledgling cannabis industry in Pontiac is investor Fadi Nassar, president and CEO of Birmingham-based Nassar Cos. He and his team picked up a 60,000-square-foot building on Lawrence Street and is looking to turn it into a medical marijuana growing facility.
He said other projects are also under consideration.
“I would say that Pontiac is open for business,” Nassar said.
There’s been plenty of activity outside of downtown the last few years.
For one, UWM’s new headquarters, located less than a mile from Auburn Hills, has expanded exponentially as Ishbia’s mortgage company grew.
Amazon.com Inc. has brought a massive new warehouse to the site of the former Pontiac Silverdome property with a reported cost of $250 million, although it almost certainly cost much more than that.
Williams International Co. LLC ditched its former headquarters in Commerce Township and relocated to a former movie studio called Michigan Motion Picture Studios in a project that at the time was believed to cost nearly $350 million.
On some of the land that Williams purchased, Kansas City-based Flint Development is building a 711,400-square-foot logistics building called Oakland Logistics Park on 44.5 acres.
There are smaller efforts in the pipeline, as well.
Old schools on West Huron, for example, are envisioned to become community centers by groups like Micah 6 Community, which is proposing a $13 million overhaul. A new multifamily building has been developed east of the Woodward Loop along Huron, as well. Don Tinsley has been active in property acquisition on Huron, too.
It’s not been all rosy, however. Peter Karmanos Jr.’s Mad Dog Technology LLC vacated the Riker Building downtown when its lease expired; some of the space was filled by Marek Health. And the fate of the Wessen Lawn Tennis Club — billed as the first new grass tennis club built in the country in more than a century when it opened eight years ago — is up in the air following a sale earlier this year to businessman John Hantz.
Politics at play
Developers and others have expressed optimism about the city’s new political leadership.
Last year, Tim Greimel, a former county commissioner and state representative, was elected mayor, and the entire city council was replaced with new members.
Reported infighting between the former mayor and former members of the city council has been replaced by elected officials working together, developers and others said.
“It just feels a lot more positive,” said Tim Shepherd, a Pontiac developer and landlord who is also on the city’s Planning Commission. “Of course, there’s always issues and things never happen as fast as they should. They are trying to redo everything. I think Greimel has a huge load on his hands trying to catch up with some of the stuff from the past.”
Nassar said a supportive political infrastructure is key, and he has found that so far in the new administration.
“When we evaluate a specific location and community for our projects, we first consider whether the municipal government will be supportive,” Nassar said. “The most successful projects are partnerships with the local community, to benefit and balance the needs and interests of the community and the developer. Nassar Cos. have found a supportive partner in (Mayor) Tim Greimel and the newly elected City Council in Pontiac, who are forceful advocates and protectors of the residents of Pontiac while at the same time understanding the benefits of attracting economic development to the city.”
Shepherd sad a lot of the developers he knows have avoided Pontiac “because of the political stuff, because of the building department.
“There were a lot of roadblocks that we’re all trying to take away for good developers and make it so it’s a value play because there’s very few value plays in this area,” he said.
“When you look at the Woodward corridor, you can go from Hart Plaza all the way to the Woodward Loop,” he said, “and right now you can’t get better value on property than in Pontiac.”
Posted By: Crain’s Detroit Business on June 10, 2022. For more information, please click here to read the source article.
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