Developers of a proposed $111 million office building in Detroit received approval Wednesday for $27 million in tax incentives.
The board of the Detroit Brownfield Redevelopment Authority voted Wednesday afternoon during a meeting at the Guardian Building to approve the incentives for the 320,000-square-foot office building on the Monroe Block, bounded by Monroe, Bates and Farmer streets, Woodward Avenue and Cadillac Square.
The brownfield incentives won’t be awarded until after the building is constructed.
Construction of the development by Livonia-based Schostak Bros. & Co. is expected to begin late next year or in early 2015.
Detroit-based Meridian Health Plan is expected to be the sole office tenant in the 16-story building, occupying up to 300,000 square feet. The first floor is expected to be retail space, and a nine-floor, 1,000-space parking deck is also planned.
The brownfield incentives are for site preparation and infrastructure improvements at the 1.96-acre site, which is currently a 230-space surface parking lot, according to the Washington, D.C.-based real estate information service CoStar Group Inc.
Meridian, which has about 620 employees in two downtown offices in One Kennedy Square and the Dan Gilbert-owned 1001 Woodward building, would move into its new headquarters in early 2017, said Sean Cotton, the company’s general counsel.
By that time, the company expects to have 1,050 employees in Detroit. Meridian initiated the new project and hired Schostak as the developer.
The Detroit Downtown Development Authority owns the land at 32 Monroe St. and 725 Bates St., said Bob Rossbach, a public relations consultant for the Detroit Economic Growth Corp., which staffs the brownfield authority.
Detroit Emergency Manager Kevyn Orr would need to approve the project following a Detroit City Councilpublic hearing and vote, Rossbach said.
In addition to the brownfield incentives, Schostak and Meridian are pursuing Michigan Economic Development Corp. Community Revitalization Program grants and U.S. Department of Treasury New Markets Tax Credits and other incentives to help finance the building.