Closed for nearly 30 years, the massive Michigan Central Station in Detroit is widely known for its ornate architecture and haunting emptiness and decay, but so far has missed out on the surge in redevelopment happening in the city.
Now the possibility for a full renovation and reuse of the old train, long a Detroit development fantasy, could finally be approaching the realm of possibility.
Representatives for the station’s owner, the family of businessman Manuel (Matty) Moroun, say that an increasing number of prospects have been touring the station to scout business opportunities.
And next month, the station will host its first sanctioned crowd event since the 1980s, when Crain’s Detroit puts on its annual Detroit Homecoming, an invitation-only event aimed at attracting interest and new investments to the region from metro Detroiters who have moved away.
“The star of the show that evening will be the railroad station, because it is such a symbol,” said event cofounder Jim Hayes.
At the same time, Detroit’s greater downtown property market continues to experience upward momentum as condo sales and apartment rents reach levels that were almost unthinkable three or four years ago.
These converging circumstances suggest the potential for redevelopment is real, and Detroit’s 104-year-old abandoned depot could have a future beyond its present stature as a ruin porn centerfold.
The Free Press spoke last week to several metro Detroit development experts and real estate insiders who believe the train station is now or could soon be ripe for redevelopment, particularly for the high-end lofts that Detroit Mayor Mike Duggan recently suggested as a potential use for the station’s office tower, which rises 15 stories above the ground level.
“I don’t think it’s pie in the sky,” said Elisabeth Knibbe, a principal and preservation expert at Quinn Evans Architects. “The rents are getting high enough and the condo prices are getting high enough where it’s getting close” to being possible.
The cost to rehab the station would undoubtedly be formidable and perhaps approach $300 million, according to past estimates.
The Moroun family hasn’t disclosed any precise cost figures for renovation work. However, Matt Moroun, son of patriarch Manuel Moroun, told reporters last month at a news conference inside the station that rehab costs would likely exceed $100 million.
One experienced metro Detroit developer said redeveloping Michigan Central Station, which is on the National Register of Historic Places, would be a prime opportunity for using federal historic preservation tax credits to help make the effort financially doable. That program offers a 20% tax credit for developers of projects that retain and preserve a building’s historic character.
One catch, however, is that new residences in buildings that used such tax credits must be rental units and can’t convert to for-sale condos for at least five years.
Among the experts interviewed by the Free Press, the general consensus is that finding practical uses for the tower’s floors — each said to measure about 18,000 square feet, or 270,000 square feet altogether — would be easier than getting tenants for the station’s main lobby and concourse building.
Rough calculations suggest the tower might yield 270 residential units if they were 1,000 square-feet each, although the unit number could be smaller after factoring in hallways and other nonleased space.
As for the lobby and concourse, photographs show how part of the station was once grand in appearance with marble flooring, oak woodwork and chandeliers. But the building’s entire interior was long ago stripped bare by scrappers and further ruined by water damage and needs significant rehab work.
Developer David Di Rita, a partner with the Roxbury Group whose work includes the acclaimed David Whitney Building renovation, said the large size of the lobby and concourse presents a challenge, although not one that couldn’t be overcome with a good development team and a financially viable tenant or user that really desires a historic space.
“I would never say that station couldn’t be redeveloped. As I understand it, the physical issues there are manageable,” Di Rita said. “There’s a lot of corporate entities that would want to call it home if they thought it could be saved.”
Duggan last month shared his thoughts about future train station uses during the news conference announcing the Sept. 13-15 Detroit Homecoming. The mayor said that in addition to the high-end lofts, corporate offices would fit nicely in the concourse area.
“If I were looking to move my headquarters to the city of Detroit and I wanted a headquarters building to be recognizable around the world in every picture, this would be the first place I’d go,” Duggan said
Another option for the lobby and concourse would be event space.
Ryan Cooley, owner of O’Connor Real Estate, whose Michigan Avenue office is a short walk to the train station, said he would anticipate great demand if the station’s main building — or at least part of it — were spruced up and reopened for hosting events, such as conferences, farmers’ markets or even weddings.
“You would be able to book that for events all the time,” Cooley said. “There is no space like that in the city.”
Duggan was joined on stage at the news conference by Matt Moroun, who told reporters how his family has received hundreds of train station redevelopment ideas from people.
The station has been out of service and closed to the public since 1988. The elder Moroun bought the property in 1995.
“The challenge that we face, being very blunt with you, is (finding) a great idea that’s both a great idea and economically viable,” Matt Moroun said.
Various proposals have been floated over the years for what to do with the empty depot. Many of them called for installing government-backed tenants, such as an international trade and customs center or a new Detroit police headquarters. None of those notions panned out.
The Morouns say they have put more than $8 million into the train station in recent years, including the installation two years ago of more than 1,000 windows. The money also went to restoring electricity and installing a freight elevator, which will be used during the Homecoming event to give the 300 expected guests tours of the top floor and its expansive views.
Michael Samhat, a representative for the Morouns’ real estate interests, said numerous prospects have been shown the train station in the past year or so and expressed interest in its potential redevelopment, perhaps as a mixed-use commercial, retail or residential project.
“We’ve had some serious interest that we’ve worked very hard with,” said Samhat, who is president of Crown Enterprises, the Morouns’ real estate firm.
If redevelopment were to happen, “we see ourself as the developer for a user or multiple users,” he said.
“To date we haven’t locked a deal,” Samhat said, “but the interest received has been real and we continue to work down a path of finding an opportunity that is good for the building, the community and is economically viable.”
Hotel examples
New apartments, hotel rooms or offices could all be possibilities for inside the station’s tower.
Knibbe, the preservation expert, noted how two successful downtown Detroit historic redevelopments — the Westin Book Cadillac and the former Fort Shelby Hotel — included a mix of hotel rooms and high-end residences. That strategy might also work in the train station.
“It really is about the right set of people coming together and saying ‘Oh, we can do this.’ And being willing and able to put in the time and effort to make it happen,” she said.
A general cost estimate is $150 per square foot when constructing a new residential building in metro Detroit. But costs could climb when redoing the depot’s tower, which was originally intended for offices and would need significant modification for residential units.
Still, with prevailing asking rents in downtown Detroit now at $2 per foot or higher for high-end residences, the heavy costs of redoing the train station wouldn’t necessarily be a deal breaker, according to the development and real estate experts.
”I think we are close now to having a project make sense,” said James Tumey, a vice president at Friedman Integrated Real Estate Solutions.
Cooley of O’Connor Real Estate said that with the strong current demand for condos in and around downtown, it may even make sense to forgo using federal tax credits when redeveloping the station so as not to be locked into rental-only units for five years.
He noted how condos in the Grinnell Place Lofts in Corktown have lately been selling for around $340 per square foot.
“The tricky thing is nobody has done a condo project that large in some time,” Cooley said of the 200-plus condos that might fit in the depot’s tower. “But there are so few condos on the market right now that I feel a project that unique could absorb the sales.”
In the neighborhood
A brief Free Press survey last week of men and women strolling around Corktown, within sight of the train station, found a mix of opinions on the idea for high-end lofts inside..
Leah Rodgers, 25, who moved to downtown Detroit from Florida this spring to start a new job, said she could imagine herself living in such a development if the lofts were priced within her budget.
“It’s actually my favorite building in Detroit,” she said.
However, Patrick Quinn, 29, who lives in a southwest Detroit house that he fixed up, said he wouldn’t feel comfortable making his home inside the long-abandoned station if it were redeveloped.
“I think it would be better if it was perhaps used as a public space or a museum,” Quinn said, “something that brings more awareness to the problems that led to it closing down in the first place, instead of just covering it up and cashing out on it.”
He would be OK visiting the lofts, though.
“It would be cool to have friends that live there and go to parties there,” Quinn said. “But I don’t think I’d want to live there.”
