Develop Michigan, Inc.
Develop Michigan – Bringing Revitalization to Michigan
DEVELOP MICHIGAN HAS INVESTED MORE THAN $83 MILLION IN 24 DEVELOPMENTS ACROSS MICHIGAN
Develop Michigan, Inc. (DMI) was launched in 2013 as a response to provide much needed capital for Commercial Real Estate projects in Michigan. The mission of DMI was to serve as a key financing partner for project developers and sponsors committed to the transformation and revitalization of the Michigan economy. Between 2013 and 2020, DMI provided senior debt and mezzanine capital for 24 real estate transactions.
This innovative development finance organization was formed through a partnership between the Michigan Economic Development Corporation (MEDC), Cinnaire and the Development Finance Group (DFG) to play a dynamic role in financing commercial real estate projects and supplement efforts to transform and rehabilitate the Michigan economy.
The MEDC provided $20 million through the Michigan Strategic Fund (MSF) to launch the program, to provide financing to impactful projects in the State of Michigan. DMI raised an additional $30.4 million from banks and credits unions. Through redeployment of funds, DMI was able to commit $83 million of investment over the life of the fund.
From 2013 – 2019, DMI made 24 loans, providing capital for real estate transactions in the form of senior debt and mezzanine capital. Projects funded range from repurposing an abandoned office building to creating an extended stay hotel and financing the construction of a new assisted living/memory care facility to converting an open space building into office suites. After 2019, DMI began the wind down phase of the fund.
DMI is managed by a partnership between Cinnaire and the DFG. Cinnaire, a Lansing-based, nonprofit Community Development Financial Institution (CDFI) with over 28 years of experience and $4.9 billion in investments. DFG is a partnership consisting of Strategic Development Solutions and First Infrastructure.
- 25% of the loan commitments provided to developers of color
- $450.6M – Total Development Costs
- 23 to 1 – State Investment Leverage (TDC)
- $172.6 – Annual Average Economic Output
- $41.9M – Change in Assessed Property Value
- $41.0M – Total Annual Operational Tax Revenue Generated
- $83.5M – Total Annual Construction Tax Revenue Generated
- 1,804 – Jobs Created/Retained
- 4.7M – Total Square Feet Financed
- 1.0M Residential Square Feet
Repurposing Detroit’s Historic Metropolitan Building
The Roxbury Group and the Means Group acquired the Metropolitan Building located on John R in the Central Business District of downtown Detroit one block east of the new Q-line rail system. The building had been vacant for 40 years. The project funded construction of the interior and exterior renovations; and provided initial permanent financing of the proposed 110-room “Element” Extended Stay Hotel with first floor retail. This will be the only upscale extend-stay hotel in downtown Detroit, attractive to visitors of large local employers including General Motors, Chrysler, Blue Cross, Quicken Loans, Medical Center, Cobo Center, and Wayne State.
Guest rooms at the “Element” reflect the smart design of urban residences; the multi-purpose areas are bright, open and nature inspired; and one can enjoy a bite with friends or colleagues in the whole living area or prepare a meal in the fully equipped kitchens. There will be 2,000 square feet of meeting space on the mezzanine/second floor with city skyline views, the ground floor and lower level will have approximately 7,000 square feet of retail, and there will be an outdoor rooftop patio. The hotel will operate under Starwood Hotels and Resorts Worldwide, Inc., Element Hotels brand, which will serve complimentary healthy breakfasts and evening wine receptions.
Fostering Economic Development in Manistee, MI
In the heart of Manistee’s historic district, sat the abandoned North Channel Furniture Store. That is, until developers T. Eftaxiadis, John Groothuis and David Ten Cate formed a partnership to renovate the building to help bolster Manistee’s revitalization efforts.
Located within the commercial Main Street – Downtown Authority district, the 21,720-square foot building had previously been a furniture retail store until closing in 2010. Redevelopment efforts incorporated many historic features–including the wood flooring, structural beams and exposed brick walls–into the design of the North Channel Brewing Co. on the first floor, and 10 high-end North Channel residential units on the second and third floors.
North Channel Brewing has become a popular destination, where patrons enjoy craft beer brewed in-house, a delicious menu and live music, while watching freighters pass under the Manistee River drawbridge.
Obtaining funding had been a challenge, but through coordination with the DMI, which provided a $1 million bridge loan, and grants and loans through the city of Manistee, the state of Michigan, the State Historic Preservation Office, city’s Historic District Commission and the city’s Brownfield Redevelopment Authority, the project was successfully completed, spurring economic development by boosting tourism and providing new jobs to the community.
Converting Office Space in Corktown, MI
The developer, 4405P, LLC (established by Mark Nassif) is planning to convert a two-story open space building in the Corktown area of Detroit into 6 individual office suites ranging from 1,150 sq ft to 9,100 sq ft. Prior to being purchased by 4405P, LLC, the property was owned by a nonprofit and operated as shared workspace. The Corktown area has seen robust activity over the past several years, specifically along Michigan Avenue, attracting investors searching the neighborhood for potential redevelopment properties. It is anticipated that after renovations are completed, new businesses and jobs for low- and moderate-income individuals will be attracted to the project site.