Redevelopment success stories in Midtown and downtown Detroit are falling behind on repaying federal loans secured through the city goverment, Stephen Henderson writes in the Free Press.
The situation undercuts future progress, adds the editorial page editor in a column.
The developments are open and operating, but they still have soft financial underbellies — empty hotel rooms, apartment or retail spaces, or occupants who pay much less than what the market rate should be. So in many cases, they aren’t making enough to repay a crucial piece of their financing.
In total, downtown and Midtown developers are delinquent right now on nearly $24 million in federal Housing and Urban Development (HUD) loans they got through city government, according to the city’s records. And because the loans were advanced on the city’s federal block grant allocation, the non-payments mean about 20% of Detroit’s annual HUD funding — $7 million that would go to mostly neighborhood-based projects — is being withheld.
Henderson quotes a city official as saying " the expectation is, yes, they will eventually repay the money.”
The $23.9 million in past-due loan payments for eight projects includes these amounts for showcase developments pictured above:
- Inn on Ferry Street: $2.9 million
- Lofts at New Amsterdam: $5.4 million
- Book Cadillac Hotel: $3.2 million
- Fort Shelby DoubleTree: $4.1 million
The Free Press columnist summarizes what all this means:
Detroit has yet to establish a stable, healthy market for development.
