Bedrock and General Motors will be seeking tax breaks and other public subsidies worth $548 million over 30 years for their $2.2 billion Renaissance Center redevelopment and east riverfront buildout, yet anticipate only a 1% return on their investment in the project.
Those and other financial details for the project were unveiled Tuesday night, Sept. 15, during the project’s latest Community Benefits meeting.
The total value of the subsidies request, which is subject to approval by Detroit City Council, breaks down as:
- A $300 million capture of various state-level taxes over 30 years through a “Transformational Brownfield.”
- A “Renaissance Zone” designation, worth about $134 million in tax breaks over 30 years.
- A commercial property tax break, known as a “PA 210,” worth just over $39 million over a dozen years.
- $75 million in cash contributions from the Downtown Development Authority or DDA
However, the development is expected to still result in $301 million in additional tax payments for the city over those 30 years.
That positive financial outcome for Detroit would be the result of the development partners — Bedrock and GM — utilizing the city’s new “PILOT” program, known as payment in lieu of taxes, and how the “Renaissance Zone” designation will be structured so that tax payments from the RenCen property that ordinarily go toward the quasi-public Downtown Development Authority will instead get redirected toward the city.
The complex details of the project’s financing plan was presented by David Howell, senior vice president of real estate for the Detroit Economic Growth Corp. The RenCen portion of the plan would cost about $1.6 billion and the riverfront buildout an additional $600 million.
Howell said that even with the hundreds of millions in subsidies, the overall project barely makes financial sense.
“The return is just 1%,” he said. “We pressure tested the numbers, confirmed that it’s a 1% return, and I said, ‘Why are you doing this? You’re contributing 74% of the equity at $1.7B, and you’re getting a 1% return on it.’
“And the answer was philanthropy. We just care about the city — we want to do something big.”
The development would be done in phases and demolish the two 39-story office towers closest to the riverfront and the multistory concrete podium that currently connects all five towers. The remaining towers — including the 72-story center tower that is now a Marriott — would then be converted into a mix of housing, hotel rooms and modernized office space.
The project also would develop the approximately 30 acres of riverfront to the east of the RenCen as a public park and amenity-filled attraction.
The anticipated $2.2 billion in costs breaks down as a $1.66 billion equity contribution from the developers, $505 million in debt and a $75 million cash contribution from the Downtown Development Authority, known as the DDA.
The DDA approved the $75 million last fall to reimburse Bedrock $20 million for the cost of demolishing the RenCen’s “podium” that connects the five original towers, plus $55 million for the cost of developing an elaborate riverfront civic space around the complex.
Bedrock and GM first announced their RenCen redevelopment plan in late 2024, but the plan had been in a holding pattern until this summer, when the state Legislature lifted the cap on the Transformational Brownfield program, doubling the amount available for large-scale projects statewide.
The redevelopment plan calls for:
- Demolishing the multistory concrete-heavy podium that connects the five original 1970s towers.
- Razing two of the five towers that are closest to the riverfront.
- Creating a new riverfront park and attraction, possibly with a marina, on the approximately 30 acres of land outside and to the east of the complex.
- Turning the 72-floor center tower — currently a Marriott hotel — into a mix of 858 hotel rooms and 200 apartments, with a new public observation deck at the top.
- Converting the 39-floor Tower 100 from office space to apartments.
- Renovating the 39-floor Tower 200, but keeping it office space.
- Building two nearby residential buildings on the east riverfront.
The developers also said Tuesday that they plan to build 934 new units of housing in the overall redevelopment, with 205 of the units reserved as affordable housing for those earning no more than 80% of the area median income.
The Renaissance Center was conceived by Henry Ford II in the aftermath of the 1967 Detroit uprising and opened in 1977.
There were 50 investors in the RenCen’s construction, the biggest being Ford Motor Co., and the total final cost of the project was ultimately calculated at $357 million, according to Free Press archives. The Free Press was among that group of original investors, contributing $450,000.
A November 2024 report from city council’s Legislative Policy Division found that no tax breaks or other subsidies were involved in building the RenCen between 1973 and 1977. GM bought the complex in 1996.
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl