Lafayette Building Demolition

[ghettopalmetto]

You still haven't answered the most basic questions. What is your #2? What is the business case for mothball/rehab in Detroit at this time? Ferchill wont touch it [[and he did his eval in 2007) . Quicken wont touch it. Umm...and I guess that is about it for interest in the building, so I'd basically just like to know when is the LB demo proper? 20 years? 30?

Well, first, you need to stop confusing a developer's motivation [[the ability to profit by engaging in a project in the present) versus an owner's motivation [[maintaining long-term value). In other words, just because John Ferchill can't make the numbers work in 2009, doesn't mean the building has zero value to the City of Detroit in the long-term.

You have foundations and a superstructure in place already, which cost a LOT of time and money to design and construct from scratch. Never mind the embodied energy in those components. Thus, there is no possible way that demolition will lead to redevelopment, as George Jackson likes to claim. If the numbers don't work for a repair and renovation, they're not going to work when you throw the costs of new foundations and superstructure into the mix [[as well as demolition costs)--at minimum, that's a solid 10% of the construction costs of a new building, which can easily break a project.

I seriously doubt that the Book-Cadillac--a far larger and more complex project--could be made to work under current conditions. But recognizing that we're in a financial trough, you wait. When market conditions improve, there may be a developer who can plug that $10 million gap with his own money. Tax increment financing may make more sense. You don't know, and this hasn't been considered by DEGC. All DEGC is looking at is this ONE blip in time. They're not one bit concerned about long-term value.

It doesn't help that the City of Detroit is one of the most neglectful landlords in the city. They haven't taken care of the Lafayette Building since day one, and now they're using their abuse of their own property as an excuse to spend good money on a bad long-term investment. It's shocking that they can morph their own laziness into still more laziness.

And the claims of redevelopment are specious, at best. If any one vacant lot is going to be redeveloped in Detroit, it's going to be the Hudson's site, due to its location and the fact that it already has paid-for foundations and parking on-site. Until that site is constructed upon, there is no hope for any of the other vacant lots. Adding one more to the mix isn't going to change a damned thing, other than make Detroit a far uglier place. NO SANE PERSON IS GOING TO LIVE OR OPEN A BUSINESS IN THUNDERDOME.

So, right now, the simple "#2 answer" is "you wait". You wait until market conditions change, and you find ways to create demand for space downtown. If DEGC wants to work on "economic growth", they need to be pushing rail transit downtown in order to lower the cost hurdles of building projects [[i.e. parking) downtown.

In the real world, you simply don't throw away millions of dollars at something that will never pay back the principle. That's called a "bad investment".

[Catman]

They are going to demo the Lafayette? Dang, the Book Cadillac just got their exterior cleaned and now it will be durty again! Awwww....geez! They have to clean ALL over again! Shoot!

[PQZ]

In other words, just because John Ferchill can't make the numbers work in 2009, doesn't mean the building has zero value to the City of Detroit in the long-term.

Ferchill could not make the numbers work in 2006 / 2007, when the market in Detroit was at its zenith, not in the trough of 2009. As time marches on and the building deteriorates even further, the project costs continue to trend upward, so even when the economy rebounds, the building will have an even larger gap. The calculus then becomes that the market has to rebound to a point higher than it has in the last 45 years, including the run of of 2005-2007 to compensate for the steadily increasing costs due to building deterioration.

The building has hada 15 consectuive points in time in which the building was not viable. That is not an anomoly, that is a strong trend. One can plot likely future trands from that size of a sample.

You have foundations and a superstructure in place already, which cost a LOT of time and money to design and construct from scratch. Never mind the embodied energy in those components. Thus, there is no possible way that demolition will lead to redevelopment, as George Jackson likes to claim.

That statement follows no rules of logic and is specisou at best. It completely ignores the fact that the foundations and superstructure in place are compromised and will require significant repair. Repair is not always cheaper than remove and replace. Any argument that presupposes either repair or replacement is ALWYS cheaper is fundamentally flawed If it was repair was always cheaper, no building ever would be replaced. Quite simply, outdated buildings often cost more to repiar than to replace. I've said it before and I'll say it again, the legislation that enabled historic tax credits identified the HIGHER costs of renovation over new build as the basis for creating the credit. It is the reason the the credit exists.

Tax increment financing may make more sense. You don't know, and this hasn't been considered by DEGC.

That is a completely false statement. The DDA is a tax increment finance district already - there is no tax increment to capture outside of what the DDA collects. The 2007 proforma Ferchill ran included mezzanine debt from the funds the DDA collects as well as sidewalk and other improvements from the DDA capital improvements fund. As Ferchill noted in the Crains article, in 2007 - in the hottest market in 45 years - using every tool available, the project did not work.
.

So, right now, the simple "#2 answer" is "you wait". You wait until market conditions change, and you find ways to create demand for space downtown. If DEGC wants to work on "economic growth", they need to be pushing rail transit downtown in order to lower the cost hurdles of building projects [[i.e. parking) downtown.

So, again we hit the rub. How much do you spend in mothballing the Lafayette for the next 10, 15, 20, 45 years until the market rebounds to a 90 year high?

Also, you may wish to consider that the DDA has already stepped up to the plate with financing for the Woodward light rail system, even fronting money to continue planning when no other sources were available. So yes, the DDA / DEGC recognize, fund, support, lobby and plan for transit. They play a key and very active role in the light rail effort.

Perhaps they should divert funds from the light rail to mothball the Lafayette?

[EastSider]

But recognizing that we're in a financial trough, you wait. When market conditions improve...

So, right now, the simple "#2 answer" is "you wait". You wait until market conditions change...

Here's the rub. This trough is not easing anytime soon. The easy money days when the BC project could barely squeak through aren't returning for years, and the carrying costs of the mothballing the building would take development money that could help small businesses open in the exisiting vacant retail spaces that blanket downtown.

How is downtown's economy helped by diverting tax dollars captured from existing empty retail spaces into a project to maintain an empty shell of a building?

[ghettopalmetto]

The building has hada 15 consectuive points in time in which the building was not viable. That is not an anomoly, that is a strong trend. One can plot likely future trands from that size of a sample.

What are you considering a "consecutive point in time"? Is that 15 consecutive days? Time is a continuum--no 15 discrete points can be consecutive. What was the statistical methodology used in this analysis?

It completely ignores the fact that the foundations and superstructure in place are compromised and will require significant repair.

Please cite the report provided to DEGC by its engineer. You are not legally qualified to make that statement.

Repair is not always cheaper than remove and replace.

But again, one never knows for sure until you actually study the issue objectively, instead of guessing. In my professional experience, renovation is almost always cheaper than to demolish and replace-in-kind, for the reasons I have cited. Perhaps DEGC is considering demolition and replacement with a White Castle? Let's see the numbers.

My question is, "Why now?" If a Lafayette renovation didn't work during the "top of the economy" [[Is that nationally or locally???), then why wasn't it demolished then? Why wait until the City has a $300+ million deficit? Why the lame excuses of "it's unsafe" and "it's detracting from the success of the Book-Cadillac"?

You keep repeating the same bullshit over and over that DEGC has been uttering since it demolished Hudsons in 1998. We want answers--not talking points.

[ghettopalmetto]

Here's the rub. This trough is not easing anytime soon. The easy money days when the BC project could barely squeak through aren't returning for years, and the carrying costs of the mothballing the building would take development money that could help small businesses open in the exisiting vacant retail spaces that blanket downtown.

How is downtown's economy helped by diverting tax dollars captured from existing empty retail spaces into a project to maintain an empty shell of a building?

That's a straw man argument, and you know it. The City of Detroit hasn't sunk dollar ONE into the Lafayette Building since it took possession. Hence, it's current condition.

[EastSider]

That's a straw man argument, and you know it. The City of Detroit hasn't sunk dollar ONE into the Lafayette Building since it took possession. Hence, it's current condition.

I'm not talking about past costs. I'm talking about next year's TIF money. Why should the owner of the Penobscot have some of his tax dollars diverted into propping up the Lafayette, when those same dollars could go instead to Clean Detroit, small business support, the rail project, etc?

What about the Ford Building or the Buhl or the Dime? How do any of those owners benefit?

[R8RBOB]

That's a straw man argument, and you know it. The City of Detroit hasn't sunk dollar ONE into the Lafayette Building since it took possession. Hence, it's current condition.

"Hence, it's current condition"

That made me chuckle because that statement negated 80 years of previous ownership as the reason the Lafayette is a ruin. The city has owned the building for 5 years and yet it is the reason why the building is ready for the wrecking ball. Incredible but thanks for the laugh. I needed it.

[Lorax]

"Hence, it's current condition"

That made me chuckle because that statement negated 60 years of previous ownership as the reason the Lafayette is a ruin. The city has owned the building for 5 years and yet it is the reason why the building is ready for the wrecking ball. Incredible but thanks for the laugh. I needed it.

What's your problem with that statement? It happens to be true. The Lafayette was a working, operational building for all of those years. When the city gets ahold of it, they won't even spend one dime on security, blocking up the windows, even basic maintenance would have preserved this building indefinitely.

Just because the city is fucked up doesn't make the argument any less true that if there was a plan in place to mothball buildings this thread wouldn't even exist.

[PQZ]

What are you considering a "consecutive point in time"? Is that 15 consecutive days? Time is a continuum--no 15 discrete points can be consecutive. What was the statistical methodology used in this analysis?

There have been 15 consecutive years since the building outlived its economic viability. My statistical methodology is that a fifteen year run included two recessions and longest perriod of sustained growth in the history of the US and the building had no economic viability. I cannot say for certain that the market will not amgically rebound to a level higher than its record level sometime in the next 20 years. Then again, I cannot prove that Elvis is dead because I have not seen his corpse with finger print records to prove his death.

My question is, "Why now?" If a Lafayette renovation didn't work during the "top of the economy" [[Is that nationally or locally???), then why wasn't it demolished then? Why wait until the City has a $300+ million deficit? Why the lame excuses of "it's unsafe" and "it's detracting from the success of the Book-Cadillac"?

During the "top of the economy" the DEGC was working diligently to try to renovate the building. The decision to demolish came after the failure of redevelopment efforts during a boom economy. The decision also comes indirectly as a result of a $300 million deficit. During such times it makes no sense to spend triple the money to mothball a building [over the cost of demolition] that has shown no potential in 15 years for rehabilitation.

[R8RBOB]

What's your problem with that statement? It happens to be true. The Lafayette was a working, operational building for all of those years. When the city gets ahold of it, they won't even spend one dime on security, blocking up the windows, even basic maintenance would have preserved this building indefinitely.

Just because the city is fucked up doesn't make the argument any less true that if there was a plan in place to mothball buildings this thread wouldn't even exist.

You really believe your previous post? If the Lafayette was a "working operational building for all of those years" then it would have never closed, right? C'mon let me see that spin you're good at!!!

[PQZ]

What's your problem with that statement? It happens to be true. The Lafayette was a working, operational building for all of those years. When the city gets ahold of it, they won't even spend one dime on security, blocking up the windows, even basic maintenance would have preserved this building indefinitely.

Just because the city is fucked up doesn't make the argument any less true that if there was a plan in place to mothball buildings this thread wouldn't even exist.

Of the 12 years the building was vacant, Howard Schawrtz controlled it for about 8 years. The other four the City spent its time reboarding the first floor as urban explorers, scrappers and graffitti artists continued to break in to it. It actaully received more attention under the CIty that it did when owned by Schwartz.

[Danny]

Adieu LaFayette Building, Hello parking lot.

[ghettopalmetto]

PQZ, it may very well be that the Lafayette Building is not viable and never will be. I really do question the timing and circumstances, though. DEGC isn't helping how it is perceived in the preservation community with the way this is being presented. Given its checkered past [["We HAVE to give public money to billionaire Mike Ilitch to demolish the Madison-Lenox so he can make another much-needed parking lot!") and the timing of this announcement right after the Tiger Stadium fiasco, how is anyone in their right mind supposed to believe this is an objective decision? From the outside, it looks like George Jackson is on a demolition spree.

Instead of George Jackson giving a bullshit statement like "The building is unsafe" [[which he is unqualified to make), why can't he come out and say:

"Look. We've been busting our asses for 7 years to renovate this building. We've had an architect and engineer conduct a thorough feasibility study. We've worked with X number of potential developers to arrange financing and make the numbers work, and it's just not going to happen right now. The City Council neglected to give the building historic status, which eliminated the possibility of tax credits that could have been used to finance a renovation. Here are our projections for a potential renovation in a future, and here's the basis and methodology of our analysis. You make look at the Book-Cadillac and wonder why we could make that project work, and not this one. Here are the reasons why: _________________. Regrettably, we have concluded that based on our objective analysis, demolition is the best option. We know there are buildings more dangerous, like the Packard Plant, that deserve demolition before the Lafayette, but _________________ is why we decided the Lafayette should be demolished now. Our intent is to redevelop this site as __________________ as soon as market conditions improve and the financial system grows more robust."

Instead, we get the same old excuses that are recycled [[yet again) from the rubble of Hudsons. Is the Lafayette Building also blocking out the sun, which would otherwise rain piles of cash on downtown Detroit? I don't see any other city demolishing as many vacant buildings as Detroit does. Not Philadelphia, not Cleveland, not Pittsburgh, not Baltimore.

Is it so difficult to be fair and honest with the taxpayers?

[Detroitnerd]

They don't like democratic processes. They don't like input from the people. They think the people are idiots. And so this is what you get: Obvious bullshit and stonewalling.

[buildingsofdetroit]

Drove by late last night and didn't look like they started demo yet.

[EastSider]

DEGC isn't helping how it is perceived in the preservation community with the way this is being presented.

What "preservation community?" A bunch of faceless screen names on this blog? Preservation Wayne, which will complain day and night about the DEGC but remain curiously silent when it comes to Wayne State demolitions? [[But then when you rely on charity for your office space, you don't bite the hand that feeds you!)

If this "community" is so strong, then they need to pony up the cash to buy some building downtown and have at it. I nominate you to be the project manager to see them bring, say, the Metropolitan Building back from the brink.

[bailey]

Instead of George Jackson giving a bullshit statement like "The building is unsafe" [[which he is unqualified to make), why can't he come out and say....:

Not to belabor the point, but if he came out and said verbatim what you wish he'd have said, would it be believed? Or would it just result in more sniping and claims of corruption and malfeasance?

[ghettopalmetto]

What "preservation community?" A bunch of faceless screen names on this blog? Preservation Wayne, which will complain day and night about the DEGC but remain curiously silent when it comes to Wayne State demolitions?

How about the National Trust, the pre-eminent preservation organization in the United States, which some years ago, put "The Historic Structures of Downtown Detroit" on its annual Most Endangered list? I guess they're just a bunch of faceless, ignorant assholes too, huh? I mean, it's not like the National Trust knows anything about renovating historic structures [[rolls eyes).

As much as I'd love to be a project manager on a huge historic renovation project, I do not have any fiduciary interest in any such work. Sorry to disappoint.

[EastSider]

How about the National Trust, the pre-eminent preservation organization in the United States, which some years ago, put "The Historic Structures of Downtown Detroit" on its annual Most Endangered list? I guess they're just a bunch of faceless, ignorant assholes too, huh? I mean, it's not like the National Trust knows anything about renovating historic structures [[rolls eyes).

As much as I'd love to be a project manager on a huge historic renovation project, I do not have any fiduciary interest in any such work. Sorry to disappoint.

How funny you had to turn toward a faceless, bureaucratic organization from outside of Detroit in response to me!

Would that be evidence of the truth of my criticism of a "Detroit preservation community?"

[ghettopalmetto]

How funny you had to turn toward a faceless, bureaucratic organization from outside of Detroit in response to me!

Would that be evidence of the truth of my criticism of a "Detroit preservation community?"

How funny that you can't even read what you wrote!

Would that be evidence of the truth in your laziness?

[PQZ]

George Jackson has made statements to that effect in numerous iarticle about this demo - as has Mr. Ferchill. You are choosing to ignore those statements.

A couple points of clarification:

1. The Packard Building is only partially owned by the City and they still have no legal right to tear it down. The special DDA funds expended for the Lafayette demo are outside of the DDA service area anyway. The proper question would be to ask why the Lafayette was prioritized for use of the special demo funds.

2. The Lafayette has state historic status which would enable it to use both federal and state tax credits - credits that were factored into the proformas Ferchill, Peebles, Quicken et al developed. The Council declined to designate it for local status which would have given the HDC oversight on issuing the demo permit.

3. The NTHPs designation of the Buildings of Downtown Detroit as endangered was an error in that it relied upon the truthfulness and accuracy of its local partners, to whit Preservation Wayne and Friends of the Book Cadillac. NTHP later expressed regret to the DDA and DEGC at the error of assuming the 100 Building Hit List to be factual. Royce Yeater indicated that the NTHP would not have made the designation had they knwn they were deliberately mislead by local sources.

[ghettopalmetto]

I am not ignoring Mr. Jackson's statements. In fact, this is what he wrote to Crains in April:

SOURCE: http://www.detroitmakeithere.com/art...FREE/904039972

The reality is the building is badly deteriorated. It has structural issues. The efficiency of the floor plan is problematic. In short, the costs of rehabilitating it are just too great to allow a viable business plan.

About which building was Mr. Jackson writing? Was it:

A. Hudsons
B. Madison-Lenox
C. Statler-Hilton
D. Lafayette Building
E. All of the above

Putting things in such specific terms as "badly", "problematic", "issues", "too great" are confusing to the general populace. To what extent is "badly"? What does he mean by "problematic" efficiency [[is he an architect now too?)? What are the structural "issues" that would need to be remediated? What's the spread in the "too great" cost?

There is no meat to this statement--it's all filler, and meaningless. The best way to earn credibility is to give specific responses.

Another way to earn credibility is to avoid statements like these regarding the people you purport you want to work with:

So it should be no surprise that I’m bothered by the strident claims of a small group of individuals who continually whine that the DEGC has no sense of history. Or worse, that we are involved in some kind of ‘conspiracy’ to rob Detroiters of their vintage buildings. With loud voices and well-placed calls to reporters, they always get good coverage whenever a blighted structure must be demolished — either for the safety of the community or the potential for redevelopment.

Yup. It's just those whiny preservationists and their well-placed calls. Why, then, does the National Trust report the following?

SOURCE: http://michiganmessenger.com/23677/d...eservationists

Royce Yeates, the Midwest director of the National Trust for Historic Preservation, has seen a pattern develop over the years that puts Detroit at the top of the list of cities where historic structures are most endangered. “The city, particularly the Detroit Economic Growth Corporation, continues to believe Detroit would be better without its history and we don’t understand why,” Yeates told Michigan Messenger in an interview.

Yeates said the city has exercised “unthoughtful demolitions” including the Madison Lennox Hotel in 2005 and recently Tiger Stadium and the Lafayette building, all demolished by Adamo.

“We are concerned and frustrated with a chronic pattern [of demolition] when there is absolutely no reason to move forward with demolition,” Yeates said. He criticized the quasi-public Detroit Economic Growth Corporation [[DEGC) which controls city development for razing historic buildings with no plans in place for new development.

“Empty ground is no attraction for development,” Yeates said.

With countless financial problems facing Detroit, Yeates said he understands that there is not a high demand for large buildings, even if they were reconstructed. But he doesn’t think a building should be torn down with no other plans for redevelopment. He said the city has “pockets of success,” namely the Midtown area where older buildings have been restored to create a new revitalized environment near Wayne State University’s campus.

He said preservationists had to fight for decades before cities caught on to the value of historic structures. According to Yeates “city after city after city” have reversed course on demolition.

But not Detroit.

“We don’t understand this pattern in Detroit. Most cities learned their lesson,” Yeates said. “They learned to quit tearing everything down around them.”

And then:

But DEGC officials disagree, arguing that empty ground is more attractive to developers.

Isn't it obvious to us all? The developers are just lined-up waiting for some good empty lots to open up!

Then there's Mr. Jackson's favorite terms: "safety" and "redevelopment of the site".

Please cite for us specific examples where injury was suffered to innocent persons as the result of DEGC allowing an existing structure to remain in place.

Please cite for us specific examples, the numerous redevelopment projects that have occurred on the site of demolished buildings in downtown Detroit.

[Novine]

"The NTHPs designation of the Buildings of Downtown Detroit as endangered was an error in that it relied upon the truthfulness and accuracy of its local partners, to whit Preservation Wayne and Friends of the Book Cadillac. NTHP later expressed regret to the DDA and DEGC at the error of assuming the 100 Building Hit List to be factual. Royce Yeater indicated that the NTHP would not have made the designation had they knwn they were deliberately mislead by local sources."

Apologized for what? Name one other downtown in America where so many buildings are potential demolition targets.

[buildingsofdetroit]

Was up at the Lafayette today, and the abatement crews were already at work. I asked one how long he thought it would take, and he ignored me. Friendly lad.