State Fair Development Involving 'Magic Johnson' Moving Forward, Developer Says

September 08, 2015, 12:30 AM

Chad Selweski covered state and regional politics for The Macomb Daily for nearly 30 years, earning numerous awards. He is a contributor to Deadline Detroit.

By Chad Selweski

The distressed, dormant site of the former State Fairgrounds at the north edge of Detroit will spring back to life in early 2016 as construction begins on a mix of retail stores, apartments and senior housing.

Developer Joel Ferguson, a key figure in the $250 million redevelopment project, said work will begin at 8 Mile Road  and Woodward in the spring and continue, with all facets of construction simultaneously for two years. All the commercial tenants have been lined up and a contractor for the apartment complex has been secured.

Inside the fairgrounds

The proposed shopping center and residential development could be one of the city’s most important economic developments outside of the downtown/Midtown area in decades.

After the 162-acre fairgrounds closed in 2009 due to state budget cuts, the site became home to decaying historic buildings and an infestation of weeds three to four feet high. Yet, the renaissance that’s about to take place could emerge as the catalyst for more redevelopment around the sporadically seedy 8 Mile boulevard.

Within a village-like setting, the development will offer more than a dozen stores, shops and restaurants; a supermarket; hundreds of apartments; senior housing, including assisted living; a Wayne County Community College District location; recreational and park space; and possibly a massive movie theater created within the historic State Fair Coliseum.

“We have been working very closely with the city Planning Department and when we’re ready … we’ll be working on all of these things simultaneously on different parts of the site,” said Ferguson, CEO of Lansing-based Ferguson Development.

"There wasn’t the interest in Detroit at that time. Now, it’s a different world.”

Rolled The Dice

 Interest in the project was ignited by the success of the adjacent Gateway Marketplace, which opened two years ago and has attracted  Detroit’s first Meijer Super Center and several other major outlets including Marshalls, Starbucks, Petco and Foot Locker.  

“We rolled the dice and made a good bid and proposal when no one else was interested in (the Fairgrounds) property,” said Ferguson, referring to a 2012 process that led to a $4.65 million purchase of the state land.

Magic Johnson/AP photo

The group of developers who made the purchase, beating out two other interested parties with less status and experience, is led by former Michigan State and NBA basketball star Earvin “Magic” Johnson. A third player on the development team is Marvin Beatty, vice president of public relations at the Greektown Casino.

Johnson and his company, Magic Plus, are still “very much a part” of the project, Ferguson said, though not the day-to-day details. Some of those duties are handled by the Redico real estate development firm in Southfield.

The original configuration for the redevelopment, represented by a site map made public in March, has changed substantially.

That prior drawing sketched out retail space in the northeast portion of the property, senior housing along Woodward, and apartments near State Fair Avenue.

A rollout of tenant announcements is expected in the coming months while local contractors and subcontractors are chosen to handle the construction, including a major investment in new streets, water lines and sewers. Some 700 to 1,000 temporary jobs will be created – all local workers.

The developers remain mum on many of the specifics, though the estimated 400,000 square feet of retail space now stands at 300,000 square feet. Original plans called for 500 apartments eventually; now the number is “in the hundreds.”

But the increased price tag, from $160 million to “at least” $250 million demonstrates that the project has not been downsized. For example, the idea of renovating the Coliseum into a movie theater is now labeled a “very real possibility.”

Financing In Flux

Financing for the overall investment remains in flux. Some city or state development incentives may be sought, though nothing as extensive as the monetary mix for Gateway, which benefited from more than $30 million from a city pension fund, the Detroit Economic Development Corporation and brownfield tax credits.

Many of the 20 fairgrounds buildings will be demolished. Again, specifics are not yet available although Ferguson said some obsolete structures “will not be saved, nor should they be.” Previous reports indicated that all but the Coliseum, the Joe Dumars Fieldhouse, the State Fair bandshell and the Dodge pavilion would likely be razed.

A neighborhood just south of the fairgrounds

The entire fairgrounds, as well as several individual buildings, are registered as state historic sites. Until all details are final, it’s unclear what role the state will play in deciding which structures stay and which are torn down.

The Michigan Land Bank, which approved the property sale two years ago, monitors the progress toward construction. As recently as Aug. 28, Land Bank officials participated in a discussion between the developers and city planners about the evolving site plan.

“The city is really in the driver seat on the site plan approval, although we are monitoring closely, and are pleased that the entities appear to be making progress,” said Katie Bach, a Land Bank spokesperson. “... There are a variety of milestones built into the development agreement, both prior to and after closing (on finances).”

Once the site of horse racing, auto racing, collegiate hockey, entertainment events and the nation’s oldest state fair, the fairgrounds has generated numerous failed plans for enhancements or redevelopment over the past two decades.

State officials have a lot riding on the success of the upcoming project as previous administrations invested $10 million to renovate the Coliseum as a hockey arena and several millions more to upgrade buildings and grounds. When the city slipped into municipal bankruptcy and the adjacent, battered neighborhoods continued to deteriorate, it appeared the fairgrounds might remain vacant for decades.

The $4.65 million winning bid for the once-iconic State Fair property, compared to about $2 million developers paid for the previously dilapidated Gateway site that is about one-fourth the size, was not encouraging.

But then two things happened almost simultaneously two years ago to light up the ambitious fairgrounds redevelopment plan like a Ferris wheel, according to Ferguson, who also serves on the MSU Board of Trustees.

“When (Mayor Mike) Duggan got elected that sent a great signal that Detroit is serious about economic development,” he said. “And when people saw the success of Meijer and everything else (at Gateway), that showed that Detroit was in play.”

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