Another day, another development has to scale back because of rising construction costs.
This time it’s Lafayette West, the multi-building development set to bring a mix of units for sale and rent to a 5.2-acre site near Lafayette Park.
When it was first announced, the approximately $110 million project would consist of 373 units. Now, the project will cost slightly more ($113 million), but have 325 units with an increase in the ratio of condominiums to apartments. The number of parking spaces in the central structure has also been reduced from 413 to 291, and there will now only be 0.9 parking spots per unit.
There was also going to be an 12-story high-rise set amongst mid-rise buildings and townhomes—similar to the Mies van der Rohe–designed community across Rivard Street. Now all building types will be four-story mid-rises.
The new details came out in a mandatory annual update as part of the Community Benefits Agreement. Amin Irving, president and CEO of Ginosko Development, lead developer on the project, told Crain’s Detroit Business that the reason behind the changes is the “absurd” cost of construction in Detroit right now.
The document says the cost per residential unit has risen from $299,700 to $348,600.
Nonetheless, the developers are determined to complete the project. Site work is expected to continue through 2020 with heavy construction beginning in the fourth quarter this year. The whole project is now slated for a mid-2022 completion.
Ginsoko already demolished Shapero Hall, a vacant building on the site, in 2018.
Lafayette West is one of many developments in Detroit that have been scaled back or abandoned completely in the last couple years. As we wrote in January this year when mega-development the Mid announced revised plans...
Other residential developments facing similar challenges include the stalled Monroe Blocks downtown, small-scale Meijer on Jefferson Avenue that will no longer be mixed-use, scrapped plans from The Platform for luxury condos at Cass & York, Lafayette West high-rise at the site of the old Shapero Hall, Cambria Hotel project replacing luxury condos, and more.
Exactly when or if construction costs will level off is one of the biggest questions facing Detroit in the coming years.