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$36.6M Midtown apartment building secures funding, ready for 2020 construction

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First announced in 2017, the mixed-use, mixed-income project filled its last funding gap this week

A five-story rectangular building with silver and light brown cladding around regular intervals. The ground-floor is mostly glass and people walk around or bike outside.
Rendering of the Sugar Hill development at John R and Garfield streets.
McIntosh Poris Associates / Perkins + Will

A mixed-use apartment building in the Sugar Hill Arts District of Midtown is now ready for construction after a delay caused by financing challenges.

A joint venture by nonprofit developers Develop Detroit and Preservation of Affordable Housing Inc., the new building at John R and Garfield streets will bring 68 apartment units, 11,800 feet of ground-floor retail, and a 160-space parking structure.

About 20 percent of the apartments, 14 in total, will be reserved as affordable for those making between 50 to 60 percent of the area median income. The Sugar Hill development is across from the John D. Dingell VA Medical Center, and many of those units will be targeted to homeless veterans through the HUD-VASH voucher program.

The total development cost is estimated at $36.6 million. Construction is expected to begin in early 2020 and take around 18 months.

First announced in June 2017, Develop Detroit says that compiling the multi-layered financing package and escalating construction costs were the main reasons the project has been delayed until now.

According to Crain’s Detroit Business, the final $4 million in financing was secured this week through a Michigan Community Revitalization Program loan. There’s no less than nine funding sources for the project, with around $10.1 million coming from U.S. Department of Housing and Urban Development, $8.85 million from New Market Tax Credits, $7.3 million in developer equity, $6.25 million in state tax credits and loans, and a $4 million loan from PNC Bank.

An overhead view of the mostly rectangular development site. Across John R street is the John Dingell VA Center. City of Detroit

“There has been a delay in the start of construction, but not an overly long one given the complicated nature of this building and parking design,” Sean White, Develop Detroit’s director of fund development, wrote by email.

The original plan called for 84 apartment units and a 300-space parking garage for around the same cost. Developers were hoping to break ground in September 2018.

The design team was first lead by acclaimed architect Phil Freelon, but he died in July this year. McIntosh Poris Associates is the architect of record and Perkins + Will design architect—both were part of the original team.

While the project has been scaled back slightly, Develop Detroit says the overall vision remains the same. “Throughout the past two years, the development team has remained committed to the city of Detroit’s original vision for the site,” White wrote, “and that is what we plan to deliver.”