20 Oct Sterling Group seeking to redevelop Joe Louis Arena site
A Detroit-based real estate company is nearing a deal to redevelop the site of the Joe Louis Arena currently being demolished along the Detroit River, Crain’s has learned.
Sterling Group, which was founded by TCF Bank Executive Chairman Gary Torgow in 1988 and is now run by his adult children, is the previously unknown developer working to get the site to which New York City-based Financial Guaranty Insurance Corp. has development rights, according to two sources familiar with the matter.
If it finalizes — the Detroit City Council is expected to begin consideration of it this week — it would be another high-profile deal for the Torgow family, and the latest chapter in the effort to reuse the site of the former Detroit Red Wings home.
Plans for property are not known, although a previous vision set forward in a 2014 bankruptcy court settlement called for a mixed-use redevelopment with residential, office and hotel space.
Mayor Mike Duggan’s office declined comment. Messages were sent to a Sterling Group executive late last week. Derek Donnelly, senior managing director for FGIC, declined comment when reached Friday morning. With a deal for the site looming, the Torgows are making more inroads in the area surrounding the 2.4 million-square-foot TCF Center, which was renamed in late August following a $33 million, 22-year naming rights deal that wiped Detroit’s former mayor’s name from the convention center.
It also from Adient plc across from what would become TCF Center and is working on finishing the abandoned headquarters project.
Sterling Group also owns the Fort Washington Plaza tower at 333 W. Fort St., the 455 Building at 455 W. Fort St. and other properties nearby.
A Sterling Group affiliate is the developer working on a new 20-story headquarters building downtown at Woodward Avenue and Elizabeth Street for Detroit-based TCF. In August, Torgow’s former bank, Chemical Bank, completed a merger with TCF Bank in a all-stock deal that creates the state’s largest bank with $47 billion in assets and $35 billion in deposits.
That was about a month after discussions between FGIC and an at that time unidentified local developer were revealed in the middle of July.
The road to the property’s redevelopment has been long.
FGIC subsidiary Gotham Motown Recovery LLC received until June 15, 2021, to submit a development plan for the property, which was abandoned when the Red Wings moved to Little Caesars Arena two years ago.
The deadline had been 5 p.m. Jan. 15, 2020, under terms of a mediated settlement reached between the Gotham Motown Recovery and the city in July 2018 after the former sued in federal court in February 2018 for more time. The original deadline was Nov. 21, 2017, under terms of a settlement of Detroit debts reached in federal bankruptcy court in October 2014 when the city was under emergency management.
The new agreement calls for demolition and remediation to be complete by June 15, 2020. The demolition is estimated at $13.2 million and has received brownfield financing. Exterior work began in June.
Bankruptcy court documents in 2014 said that the property was to be redeveloped with a hotel with at least 300 rooms and standing no more than 30 stories and a mix of office, retail, recreation and residential space.
Gotham was working with Detroit-based architecture firm SmithGroupJJR, which in September 2016 prepared a 29-page outline for what could be done with the Joe Louis Arena property. It called for re-establishing the street grid and creating a landmark development that connects with the Detroit riverfront. It also suggests ending the two north-south freeways through downtown, M-10 and I-375, farther north, either at Howard and Larned streets or about at I-75.
Several development mixtures are contemplated in the outline, including a 24-story residential tower, an expansion of Cobo Center and parking with about 2,000-4,000 spaces.
Today, it’s not known what precisely is being contemplated for the property, nor what Sterling Group would pursue.
The property’s complex nature and an evolving commercial real estate market has made it difficult to submit a redevelopment proposal, Gotham Motown has argued in the past.
One city official has called what surrounds the arena “an absolutely wicked entanglement of infrastructure” that makes redevelopment difficult.