ROYAL OAK – Schostak Brothers received a second extension from the Downtown Development Authority earlier this month to continue to work on a development agreement for the I-696 and Main property.
Schostak Brothers is the preferred developer of the site and is working with India-based Tata Technologies on a plan that would relocate Tata’s North American headquarters from Novi to Royal Oak. The parties have been working on the agreement since May, and the first extension was granted in October.
Initial plans call for a four-story building that is roughly 114,000-square-feet with a parking deck and surface parking. Building costs are estimated at $37 million, according to Jeff Schostak, vice president of corporate real estate for Schostak Brothers.
“This is a first-class, class A office building,” Schostak said. “It is really a signature building that has a great brand and great presence on Royal Oak’s gateway site.”
Schostak said they have had discussions with the Michigan Economic Development Corporation to see “what incentive packages the state can provide,” and plan to follow up on that in January.
“It will give us a better sense of what the state is going to contribute to fill in the gap of making this project economically feasible for Tata Technologies to move their headquarters to Royal Oak,” he said.
Joe MacLellan, associate vice president of partner management at Tata Technologies, said they are a “people business,” and their interest in the site stems from the promise that it could help them attract some of the state’s best talent.
“For us this project is about helping Tata position itself as a preferred employer in one of our most important markets, metro Detroit,” he said.
DDA member Bill Harrison said he was glad to hear some assurances that the interest from Tata was real.
“After hearing from the Tata folks I have much more confidence this is real and not just Schostak dreaming,” he said. “I’m pleased to hear at least the board in India is aware of it so it gives more substance to the project.”
However, one thing that was missing from the discussions was the residential portion of the project.
The preferred developer status also included the caveat that Schostak Brothers work with Versa Development/C.G. Emerson on a mixed-use plan with residential.
Schostak said it is “still in the plan” to have the residential portion, but he wants to get the Tata part figured out first.
“Tata is the driving force behind the project,” he said.
The extension from the DDA gives Schostak Brothers until March 18 to finalize the agreement. There also will be more on the residential component at that time as well.
