Uptown and Downtown

A strong economy, low vacancy rates, and rising demand for residences and offices are transforming downtown Birmingham like never before.

Old Woodward, south and north of Maple Road, is undergoing a complete reconstruction in downtown Birmingham. Improvements include a landscaped median, wider sidewalks with handicap ramps, new underground utilities, and electrical upgrades that will include electric vehicle charging stations. It will be completed this summer.

With a half dozen multimillion-dollar construction projects underway and nearly as many in the pipeline, civic leaders in Birmingham are gearing up for downtown’s most ambitious development since the 1920s, when six blocks of older houses were acquired and removed to create the city center, including Shain Park, City Hall, and the Baldwin Public Library.

The new development, highlighted by the so-called Bates Street Extension project, will extend Bates north from Willits Street, wrapping around a large city-owned surface parking lot that’s slated for redevelopment and continuing east to connect to North Old Woodward. The extension, in effect, will add up to two blocks of development at the northern edge of the downtown core.

The plan calls for razing and rebuilding an aging four-level parking structure at 333 North Old Woodward which, combined with a surface parking lot west of the structure, would provide room for 1,150 spaces, up from 770 spaces. Although the deck could be renovated, at a time when the downtown district is experiencing rising demand for parking its size and aging condition hampers such an undertaking.

Jana L. Ecker, Birmingham’s planning director, says the Bates Street Extension project will complete the recommendations that were made in a master plan for downtown drawn up by famed urban planner Andres Duany and Gibbs Planning Group in Birmingham. That plan was approved by the city more than 20 years ago.

“There will be opportunity for some private development, with additional parking to support the private development,” Ecker says of the Bates project. “We’re looking at some public plaza space over there, in connection with Booth Park to the north, and maybe a bridge over the Rouge River. There (are) a lot of planning goals that we’re looking to get out of this.”

​Ecker says the Bates Street development is one of the last projects for downtown that was spelled out in the city’s Master Plan 2016, commissioned from Duany and Gibbs. Following a public bid process, city officials are considering two proposals for the site from four original submittals.

“There will be opportunity for some private development, with additional parking to support the private development… There (are) a lot of planning goals that we’re looking to get out of this.”
— Jana L. Ecker, Birmingham planning director

Woodward Bates Partners in Birmingham, which includes local architect Victor Saroki, plans to offer 66,700 square feet of commercial space, along with 58 residences and required parking. TIR Equities in Birmingham is proposing the construction of several buildings, including a 15-story structure that, all told, would provide 82,800 square feet of commercial space, 321 residences, and required parking. Both proposals offer a mixture of residences, stores, restaurants, and offices, along with providing additional parking.

In a curious twist, height restrictions that limit private development projects to five stories don’t apply to publicly owned parcels. That may change, however, if the selected development team acquires property from the city. Such an acquisition may be subject to voter approval, as well.

“About 10 years ago we started this process and it didn’t go far,” Ecker says of the Bates proposal. “I think the timing wasn’t the best. This time, the parking demands and the public pressure to get more parking (are) what’s driving it.”

She adds the city would prefer linear buildings of around five stories along North Old Woodward, Willits, and the extension of Bates, with a new parking deck in the center of the roughly 2-acre site. At that height, the new construction would complement the buildings on the neighboring blocks.

“There’s a beautiful view of the river behind the fence at the north end of the parking lot,” Ecker says. “One of our goals is to open up some of the views of the river, add a public plaza space, and provide a public connection to Booth Park.”

While the Bates Street project is in its early stages, other parts of the downtown district are under construction, ranging from a rebuilding of Old Woodward between Oakland Avenue and Brown Street to the addition of an “ultra-luxury” hotel at the northwest corner of Brown and South Old Woodward (formerly Coldwell Banker Weir Manuel Family of Cos.). Another anticipated project in the area is a five-story mixed-use building slated to rise on the site of the former Varsity Shop, at the northeast corner of Pierce and Merrill streets (the store recently relocated to 623 S. Adams Rd.), along with several new restaurants like The Morrie at the Palladium.

The road reconstruction work along North and South Old Woodward will be above and below ground. A median boulevard will be installed as part of the streetscape to slow traffic and beautify the area, similar to the median located north of Oakland Avenue put into place a few years ago.

New sewer and water lines will replace some infrastructure that dates back to the late 1800s, and will be complemented by fiber optic traffic signals, wider sidewalks that will include handicap ramps and offer more room for outdoor restaurant seating, charging stations for mobile devices, and a new irrigation system.

To mitigate the inconvenience for motorists and pedestrians during construction, the city has arranged for valet service and will create designated pedestrian crossings at certain points, to allow passage from one side of Woodward to the other. The $7 million contract awarded to Angelo Iafrate Construction Co. in Warren will be completed over the summer.

The new hotel at South Old Woodward and Brown, kitty-corner to the historic Ford-Peabody Mansion, is a chip shot from its most formidable competitor, the four-star Townsend Hotel. Chicago-based Aparium Hotel Group is developing the new hotel. Last year, the company, along with several local partners, converted Detroit’s former fire department headquarters next to Cobo Center into the $35 million Foundation Hotel and the popular Apparatus Room restaurant (the new hotel and eatery will keep the same architect, McIntosh Poris Associates in Birmingham).

The proposal calls for a five-story mixed-use building with retail on the first floor, some office space, and hotel rooms and residences above. Ecker says the office space will be mostly for the hotel, complemented by the restaurant, retail space, and a banquet room. The hotel will offer 143 luxury rooms, 17 residences, and two levels of underground parking.

The former Varsity Shop at Pierce and Merrill streets will be replaced by a five-story, mixed-use building.

The former Varsity Shop location, meanwhile, was acquired by Bloomfield Hills-based Kojaian Management Corp. two years ago. A burst boiler pipe in the building destroyed about $300,000 worth of merchandise and forced the former Varsity Shop owners to relocate. “The old Varsity Shop is in our redline retail district, so they’re required to do retail on the first floor,” Ecker says. “Under our zoning, they could have two floors of office and the rest (would be) residential.”

Ecker says the Birmingham boom of new construction is based on land values in the city as well as the desire of developers, office tenants, and residents to be in a walkable urban center. Downtown zoning restrictions allow for the development of up to five stories on the west side of Woodward, and up to nine stories on the east side of Woodward.

“In 2007 we did a master plan for the Triangle District, which is the area east of Woodward, south of Maple, and west of Adams,” she says. “There’s no vacant land, per se, but a lot of it is underdeveloped property. There are quite a number of surface parking lots, and few mixed-use, multistory buildings, so that’s another area we’ve been focusing on.”

Robert J. Gibbs, president of Gibbs Planning Group, says as a co-author of the city’s Master Plan 2016, he gives city officials full marks for implementing nearly all of the plan’s recommendations. “We made 300 recommendations, and usually only a third of our recommendations (for such plans) get built — but the city implemented almost all of them,” he says. “That’s almost unheard-of for us as a planner.”

He adds that the city has benefited from good planning over the years, starting in the 1920s when it hired a planner from Harvard University to create Shain Park, the City Hall, and the Baldwin Public Library as a downtown focal point. Another bold plan, carried out in the ’60s and ’70s, was the building of five large municipal parking garages that precipitated the growth Birmingham enjoys today.

“We changed the zoning where the city only had one-story zoning and we changed it to five stories. That was a huge change,” Gibbs says. “We also put in really high standards for buildings. We required that buildings be built out of stone or brick, and have first-level retail with residential on the top level.

“Sixty percent of Americans now want to live in walkable cities, and that includes the 20-year-olds and the empty-nesters.”
— Robert J. Gibbs

“We put in state-of-the-art building codes. The building regulations and codes became known as form-based codes, (and Birmingham was) one of the first cities with form-based codes in the United States. Form-based codes require really high building standards and proper planning.”

Form-based codes are intended to produce places of shared use, with complete neighborhoods that are compact, pedestrian-friendly, and mixed-use. Those standards have made Birmingham the most expensive area for developers, who, in turn, can expect the highest returns on their investments.

“Birmingham has some of the highest costs in the area, so any developer coming in is faced with that reality,” says Anthony Sanna, senior managing director and CEO of Integra Realty Resources in Birmingham. “By allowing developers to go up a few stories, it spreads that land cost out over more building area, and more building area means more income and more justification for the expensive cost of these structures. Birmingham has some of the highest rents in the region, so it’s attractive in that regard.”

Sanna says the city is able to support higher land and rental costs, given vacancy rates for retail and office space are very low.

“The five-year average for office vacancy is under 7 percent, but more recently, it’s been under 5 percent,” he says. “Retail has been strong, probably under a 10 percent vacancy rate for the last five years. Recently, single-digit vacancies of maybe 3 or 4 percent are the norm.”

One of the city’s most expensive projects, the $80 million Brookside Residences, by Aldren Development Group in Southfield, will open later this year at 369 North Old Woodward. The five-story building will have 29 condominiums that range in price from $1.7 million to $3.4 million, retail space on the first floor, and two levels of underground parking. To the north and west, it offers scenic views of the Rouge River and Booth Park.

Gibbs says a recent sale at Brookside topped $1,200 per square foot — “Manhattan prices,” as he described it.

The Ford-Peabody Mansion at E. Brown St. and South Old Woodward, is being converted into offices and the Adachi Bistro.

In turn, Alden Development Group will soon begin a $30 million transformation of the former Peabody’s restaurant along Woodward, south of Maple, and an adjoining frame shop to the west, into a mixed-use development. The Planning Board, in March, approved retail on the first floor, office space on the second and third floors, a mixture of residential and commercial on the fourth floor, and residential on the top floors. Two floors of underground parking will have space for 90 vehicles.

Already under construction, with a completion date of next spring, is The Pearl, a mixed-use four-story limestone building at 856 North Old Woodward, on the site of the old Carrie Lee Chinese Restaurant, which was razed about a decade ago. Retail space will be offered on the first floor, with 26 luxury apartments ranging up to 4,500 square feet above. Plans include 20 on-site dedicated retail parking spaces with underground parking for the rental tenants.

Just around the corner on Oak Street, west of Woodward, the late Art Van Elslander, founder and chairman of Art Van Furniture Inc. in Warren — who sold the business to Boston-based Thomas H. Lee Partners last year — and his son, Gary Van Elslander, invested in the construction of an 11,000-square-foot office structure. Van Elslander Capital and the A.A. Van Elslander Foundation will occupy the building, which is slated to open this summer.

In the Triangle District, work on 750 Forest, a 22-unit condominium development set in two existing buildings, is expected  to be completed by the end of the year. Located across the street from Forest, an upscale restaurant, condo prices start at $395,900. The project team includes Robertson Larson Group in Bloomfield Hills and McIntosh Poris Associates in Birmingham.

Gibbs says the developments reflect a massive demographic shift that’s taking place across the country. “Sixty percent of Americans now want to live in walkable cities, and that includes the 20-year-olds and the empty-nesters,” he says. “They don’t want to live out in the suburbs. They want to live in a smaller condo or an apartment and walk to restaurants or shops, and Birmingham is going that way now.”

The expansion in office space, particularly, is creating a crunch on parking in Birmingham. Gibbs says when the Master Plan 2016 was drawn up, planners underestimated the effect of requiring office space in the five-story building formula they adopted.

“Birmingham has some of the highest costs in the area, so any developer coming in is faced with that reality.”
— Anthony Sanna, senior managing director and CEO, Integra Realty Resources

“We didn’t anticipate that companies would be squeezing more workers into offices. They’re now putting in more than twice as many workers per hundred square feet than we projected,” he says.

The problem is compounded by the fact that while the city requires parking for residential development, it does not do so for commercial development downtown. The rules recently drew the city into a lawsuit over Alden Group’s plan for a five-story building on the Peabody’s  restaurant site. The complaint cites Alden’s own traffic impact study and a Planning Board report last August that acknowledges: “The city’s parking system is operating near capacity, and does not presently have the capacity to accommodate the additional demand that this building will create.”

Alan M. Greene, a partner at Dykema in Bloomfield Hills, filed the lawsuit in Oakland County Circuit Court in March on behalf of the 8-year-old Greenleaf Trust Building that adjoins the north side of the Peabody’s site. Greene says a parking shortage is a chronic downtown issue that was identified in the Master Plan 2016.

“That report actually identified the Peabody’s restaurant site for future acquisition by the city to build a parking structure,” Greene says.

City Manager Joe Valentine says the municipality has taken a two-pronged approach to improve parking convenience. “In the short term, the city has leveraged technology and creative practices to add both convenience and capacity to the city’s parking system,” he says.

The Peabody’s proposal also drew additional fire from the owners of the Balmoral Building, a similar five-story building that opened in 2015 on the southern edge of the former restaurant site. The Balmoral and the Greenleaf Trust buildings have upper-floor residential and office space on either side of the Peabody’s site.

The two structures were erected close to their respective property lines, with some setback for the upper floors. Alden’s proposal for the Peabody’s site also intends to build right up to its property lines on both sides, snuggling that new building right up to its neighbors on each side.

Greene argues that the developers of the Greenleaf Trust and Balmoral buildings, with the blessing of the Birmingham Planning Board, designed their respective buildings with expensive, aesthetically pleasing materials on all four sides. But Alden Development’s plan would hem in the north and south sides of its two neighbors.

The Balmoral Building has 50 windows looking onto the Peabody’s site, while the Greenleaf Trust Building has 47 windows embedded into its Mankato stone façade on the Peabody’s side of the building. Greene argues that the two buildings will be financially harmed because of the blocked views for upper floor tenants and poor airflow. But it would be the same situation if the city built a parking deck on the site. The case is before Circuit Court Judge Martha D. Anderson.

To help ease parking demand, short-term initiatives include new smart meters with debit card access, new traffic control technology in structures, downtown on-street valet service, rooftop valet service in structures to add capacity, and the utilization of off-site parking lots. The long-term initiative would be the reconstruction of the 333 North Old Woodward parking deck and lot into a new, larger structure (Bates Street Extension project).

No such issues are plaguing the progress of development in the Rail District, the area that runs along the east side of Eton Street from Maple Road to Lincoln Road, on the east edge of the city. Once home to factories, warehouses, and commercial building outlets, the Rail District now throbs with restaurants, bars, and galleries. Ecker says the availability of land and space for parking makes the area attractive to developers.

Alden Development Group in Southfield is building the $80 million Brookside Residences at 369 North Old Woodward in downtown Birmingham. Located just south of Booth Park and the Rouge River, the project, set to open later this year, will offer 29 luxury ondominiums priced from $1.7 million to $3.4 million, along with first-floor retail.

For example, Moceri Cos. in Auburn Hills recently completed a luxury loft development along Eton Street, called Iron Gate of Birmingham. The project offers 11 live/work lofts ranging in size from 1,550 square feet to 3,000 square feet. There’s also 2007 Villa, just east of South Eton, a development that Ecker says would consist of eight townhouse-style units.

Even a neighborhood eyesore, an old one-story industrial building at 2010 Cole, now has more than one suitor wanting to develop it. “The previous owner tore down half of it and it looked like half a shell of a building for the last couple of years,” Ecker says. “Someone bought it and they’ve been approved to do a three-story, mixed-use building. They’re proposing a first floor restaurant and some other quasi-retail use, and office use with residential. We’ve had a few people come in wanting to buy it, so I don’t know if that will change or not. But at this point, it’s approved for three stories, mixed-use.”

The Eton Road Corridor plan, drawn up in 1998, created the Rail District. Similar zoning changes allowing mixed use and more height density, cheaper land costs than downtown, and available parking spurred development in the area, Ecker says.

Moving to the downtown district, the master plan called for a five-story building on either side of Maple, at Woodward, effectively acting as gateways into the central business area. The Greenleaf Trust building occupies the southwest corner, while the northwest corner, once home to a service station, has been vacant for years. The city has reviewed several plans for the site, including a combination of a possible hotel, residences, office space, ground-floor retail, and underground parking.

It’s the same story for the southeast corner of Woodward and Maple, once home to a Holiday Inn. The city is working with the owner to identify future uses for the site; in the interim, it could be used for surface parking.

Still, for all of Birmingham’s high-end tenants and residents in the downtown area, the Triangle District, and the Rail District, Valentine, the city manager, says the municipality is studying how to spur the development of more affordable residences.

“The city has a variety of housing options; however, in the downtown residential area, housing costs are in the millions of dollars,” he says. “As a way to evaluate the implications of this, as well as opportunities to explore more affordable housing options within the downtown area, the city will be reviewing this as part of its efforts to update the citywide master plan later this year.”

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