The Detroit Housing Commission this week voted to sell the 18-acre former Frederick Douglass public housing site to Bedrock for $23 million, subject to US Department of Housing and Urban Development approval. The deal also is subject to due diligence by Bedrock and is expected to close in 2018.
In collaboration with the DHC and the City of Detroit, Bedrock intends to form a partnership with a national mixed-income housing developer and a local affordable housing developer, both to be named later. Together, they plan to develop more than 700 units of rental and for sale housing units on the site. Executing a final project will require partnership with the city, the DHC and likely MHSDA and MEDC; and include use of LIHTC, City of Detroit affordable housing grant funds and infrastructure investments, all of which will be determined as part of the submittal to the City Council and HUD.
Over the next several years, Bedrock plans to develop up to 3,500 residential units in the city. They have committed that 20 percent of their portfolio will be affordable housing for those at or below 80 percent of the Area Median Income. This commitment to affordable housing includes both new construction like 124 Alfred City Modern in nearby Brush Park which will be dedicated to seniors whose incomes are 30 percent to 60 percent of the AMI, and preservation of existing affordable housing like the 236-unit Cathedral Towers apartments in Midtown. For the Frederick Douglass site redevelopment, Bedrock has agreed that over 20 percent of the total units will be affordable housing, and has also agreed to offer many of the new units to households earning as little as 30 percent AMI, or about $14,500 per year.
“The Housing Commission looks forward to achieving the goal of both creating additional affordable housing in the greater downtown consistent with last year’s DouglassTransformation Plan and generating resources to be used to improve our existing housing stock, support our current residents and improve the neighborhoods. Using gains in one area of the city to support needs in other areas of the city is what we’ve all been working to accomplish,” said Richard Hosey, chair of the Detroit Housing Commission board.
The sale proceeds will be invested in resident services across the DHC’s existing housing portfolio and at the Douglass-adjacent Brewster Homes and renovations of DHC properties. The DHC plans to create a subsidiary and form partnerships with affordable housing owners and developers to extend affordability terms and make capital improvements in neighborhood affordable housing developments where their low-income housing tax credits are at risk of expiring. Last year, a Bedrock-led team was selected to redevelop the site through a Choice Neighborhoods grant application and DHC retained the right to sell the site. Although Detroit was not awarded a Choice grant last year, DHC and the city plan to evaluate other DHC public housing and eligible rental-assisted properties for the Choice Neighborhoods program in the next round. ”We are pleased that the DHC will become a partner to the city as we identify ways of preserving existing neighborhood affordable housing,” said Arthur Jemison, city housing director. “The city and DHC plan to identify eligible neighborhood properties for future pursuit of the US HUD Choice Neighborhoods Grant program.”