Midtown Detroit will gain 236 affordable housing units for the next 30 years following the renovation of the Cathedral Tower Apartments. A $12-million renovation is planned for building systems, with $2.15 million from Detroit-based full-service commercial real estate firm Bedrock. The building will also be acquired by a joint venture between MRK Partners and local developer Fortus Partners, who plan to increase affordability for all units from 80 percent AMI to 60 percent.
All income-eligible residents will remain in their homes, avoiding displacement. With the property up for sale this year, the building was in danger of being converted to market rate units in the high-demand neighborhood, displacing residents who have lived there for years. Now, MRK and Fortus, in partnership with Bedrock, will preserve the affordable units. The building will see major system improvements including a new rooftop HVAC system, new windows, upgraded fire alarm system, kitchen and bath improvements, and new plumbing, interior, and exterior upgrades.
“For equitable growth to happen in Detroit, we need to retain the residents who have stayed while attracting new neighbors,” says Arthur Jemison, director of housing and revitalization for the City of Detroit. “Preserving affordable housing in buildings like Cathedral Tower is a large part of that equation.”
Under the new affordable housing agreement approved by City Council last week, Bedrock will provide $2.15 million to support the preservation and renovation of the building, and help keep long-term residents in their homes. Over the next several years, Bedrock plans to develop or rehabilitate up to 3,500 residential rental units on its own and with partners. With this agreement, Bedrock is committing that 20 percent of the units, will be affordable housing.
“We are thrilled to be part of making this important project possible,” adds Dan Mullen, President of Bedrock. “Our first two new residential developments downtown have been mixed income developments, and we plan to keep creating new affordable housing options. With this project, we are also taking the critical step of helping preserve existing affordable housing, ensuring that we don’t take one step forward and two steps back by losing the existing affordable housing and long-time residents we have today.”
The Cathedral units are among 2000 existing affordable housing units throughout the greater downtown area of Detroit that are at risk of expiring within the next five years. The deal is expected to be financed through a combination of federal Low Income Housing Tax Credits, tax-exempt bonds, and low-interest financing through Bedrock Real Estate Services.