Historic Train Depot in Lansing is Due for a Makeover

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A 113-year-old train depot on Michigan Avenue, just a few blocks from the state Capitol building, is coming back to life. Vacant since 2016, the Lansing property was the former location of Clara’s restaurant, and is being redeveloped by the Gillespie Group. A  national coffee retailer will occupy part of the depot, while the remaining 4,045 square feet may be repurposed as a restaurant, retail or office space. A new parking lot and drive thru will be added, along with a green space parklet. Construction is expected to begin in September and wrap up during summer 2022.

Sterling Group Pockets $36 Million for Joe Louis Parking Deck in Detroit

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Sterling Group’s quick sale of the Joe Louis Arena parking garage netted eight figures for the Detroit real estate company. Sterling Group purchased the property from the City of Detroit in a deal that became public in October 2019. The real estate company paid $2 million in cash to the city and reimbursed the city $12.1 million  for the demolition within the area. Detroit also saved $3 million on parking deck improvements, $4 million on remediation of the arena site, and about $7 million in tax-increment financing dollars.

Weekly Brief – June 7, 2021

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Last week I discussed how the pre-pandemic disputes over short-term rentals are bubbling up again.  The other land-use issue that I expect will come front and center as we return to some semblance of normalcy post-pandemic is cannabis-related property.

Communities are starting to see large-scale and capital-intensive cannabis development. The property taxes from these developments are, of course, enticing to communities. However, I suspect we will start to see some municipal disputes about cannabis uses in the next few years, as these uses continue to proliferate.

Already, we are seeing disputes relating to the use of property for caregiver grow operations. I expect these disputes to multiply.

However, I also expect to see cannabis-related property transactions to proliferate. If (or when) the federal government removes the remaining regulatory and legal hurdles to cannabis development, I would expect these developments to accelerate. However, I also expect major corporate investors to get into the cannabis market once the remaining legal hurdles are cleared. The impact of the acceleration of this segment of the market may, in my mind, counter-intuitively, drive prices down. As the business becomes more normalized, I expect the approved zoning for these uses to expand, which will have the impact of increasing the supply of properties that are approved for such uses.

(Shameless plug: My title company has extensive cannabis property experience. We have handled over $80 million in cannabis property transactions. We can issue title policies for cannabis-related properties, and we have dedicated escrow accounts for cannabis-related funds at a cannabis-friendly financial institution. If you need assistance in this area, email me at dnykanen@mwtmi.com)

Former Site of Detroit Country Day School Purchased

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The historic former Detroit Country Day School building has sold. The 38,500-square-foot building has sold to JCJ Development LLC which is registered to Jordan Jonna. JCJ Development will convert the original school building into a residence. In 2017, Detroit Country Day announced a $30 million campus expansion and vacated the building. The building received a $2.9 million purchase offer from the Troy-based Kensington Church in 2019. The church withdrew its offer after community protest.

 

 

Wholesaling Middlemen Descend on Neighborhoods

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States and cities in the U.S. are cracking down on a niche in house-flipping known as wholesaling. The wholesalers do not typically hold real-estate licenses which makes regulation difficult. Wholesalers negotiate with homeowners and then put the homes under contract and sell those contracts to home-flippers. A home that just needs a little upgrade is long gone in today’s market. Instead, wholesalers are targeting homes that aren’t on listing services and need major overhauls. Most are in poorer neighborhoods. There are allegations that some wholesalers mislead struggling homeowners about the value of their property and take advantage of the situation.

Second “First” Home Buyers Accelerate Home Prices In Southwest Michigan

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A beachfront house in New Buffalo will set a new record for Southwest Michigan.  It will be the fourth home in New Buffalo to sell for $4 million or more in the past year. The real estate boom in Southwest Michigan is not only at the upper end of the market. Along the 16-mile strip of shoreline towns from New Buffalo to Bridgman, home sales were up 48 percent in the first quarter of the year from the same time in 2020. Buyers aren’t necessarily buying vacation homes. They may keep their first residence in another city, but think of New Buffalo as “home” for now as they wait to see how things play out with the pandemic. New Buffalo is seeing an influx of buyers from Indiana and the Chicagoland areas.

Vacant Farmington Hills Property Flip Flops…Again

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The property at 30250 Grand River Avenue in Farmington Hills will flip flop, once again. Formerly an auto dealership, the property most recently housed a school, Steppingstone School for gifted children. The school moved on in 2018, leaving the building empty. A Farmington Hills developer will revive the property and bring it back to its auto dealership days. However, the lot will be used for online sales instead of in-person sales. The city needs to approve the site plan since the use is once again changing.

Short-term Home Rentals Create Debate

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Two Michigan bills that address short-term home rentals have created intense debate about who will determine how to regulate dwellings like Airbnb or vacation rentals. The Ann Arbor-based Michigan Municipal League and Lansing-based Michigan Association of Realtors are on opposite sides with each asking its constituents to email, call and write to their local legislators about the bills. Under the bills, a short-term rental would be a residential use of property. It would be a permitted use in all residential zones. It would not require a special use or conditional use permit, and it would not be a commercial use of property. Opponents of the bills call them a “cookie-cutter approach” to legislation that ignores the different needs of Michigan communities.

 

Weekly News Brief – May 31, 2021

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Now that the economy is slowly progressing back to normal, the issues facing real estate are also slowly getting back to normal.

This week we saw reports that one of the pre-pandemic greatest hits is returning back to the forefront. The Republican-controlled state legislature is moving forward on a bill that would ban local restrictions on short-term rentals. Prior to the COVID-19 pandemic, local governments fought short-term rentals with a ferocity that had not been seen since the first days of the legalization of marijuana.

However, the lack of travel during the COVID-19 pandemic brought these disputes to a halt. However, now that leisure travel is returning, these disputes are also returning. While I do not expect the current bill to pass in its current form, the tension between local governments, generally responsive to neighbors who oppose short-term rentals in residential zones, and the state legislature, who may be more responsive to the lobbying efforts of companies such as Airbnb and Vrbo.

 

Michigan Legislature May Nix Short-Term Rental Laws

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Bills in the Michigan legislature that have bipartisan support would nix local laws that ban or limit short-term rentals through zoning. The bills are controversial and have garnered heated debate. Proponents like Airbnb, realtors, and lawmakers from both parties say the proposed changes to state law are about personal property rights and do not prevent cities from regulating short-term rentals. Opponents, which include leaders from cities all over the state and hoteliers, say they do not support an outright ban on short-term rentals. They feel that local leaders should have the power to decide what rules are most effective for their communities.