Ilitches renege on deal to purchase homeless shelter in Midtown

The Ilitches have come under a lot of scrutiny lately. The family, which owns Little Caesars Arena, has been facing growing criticism in local media for not building out the much-hyped District Detroit, but instead covering the area almost exclusively with surface parking lots.

And now, the Detroit News is reporting that Olympia Development has backed out of a deal to purchase the Neighborhood Service Organization’s Tumaini Center on Third Street just south of Martin Luther King, Jr. Boulevard. The nonprofit’s homeless shelter had plans to build a larger facility on the east side that was contingent on the sale of the Third Street facility.

From the Detroit News article:

For more than one year, the nonprofit Neighborhood Service Organization, NSO, and Olympia Development of Michigan, the real estate arm of the Ilitch family’s host of businesses, had a verbal agreement about the Tumaini Center at 3430 Third Street. The agreement was that Olympia Development would buy the building for $1.5 million. Both sides confirmed the potential deal in September 2017.

The building sale was a key part in the nonprofit’s funding plan to build a new center on Mack Avenue, just east of Gratiot. Late last year, the Ilitches began to waffle on the deal. Earlier this year, Olympia Development officially backed out, said Linda Little, NSO president and CEO.

The Ilitches are likely to face further criticisms of their business practices after reneging on a deal with a charity group.

Most recently, HBO got in the action with a critical segment on Real Sports with Bryant Gumbel. Olympia Entertainment, which declined to participate in the segment, responded with a defensive and disappointing statement.

Update: Crain’s Detroit Business reports that NSO has apparently found a buyer, MHT Housing Inc., for its Third Street homeless shelter. It was already partnering with MHT for its $20 million shelter and apartment complex on the east side, which they expect to break ground in June.

MHT Housing also recently co-developed affordable housing on Gratiot Avenue.