Detroit City Council on Tuesday approved a resolution to use federal pandemic recovery dollars to help fund a project to turn a long vacant high-rise — the Lee Plaza on West Grand Boulevard — into senior housing.
The city’s housing and revitalization department requested approval to spend $7 million in American Rescue Plan Act dollars to address a funding gap to renovate the 15-story historic tower where 117 units are slated to be set aside as housing for income-eligible seniors.
The initial phase of the roughly $60 million project led by Detroit-based developers Roxbury Group and Ethos Development Partners will include housing for seniors. An individual would have to make $28,000 or less to qualify.
The construction is expected to begin next year and wrap up in 2024.
The $7 million in federal relief dollars creates an “important stake in the ground” for the redevelopment and is crucial to move the project forward, David Di Rita, principal of the Roxbury Group, said during a City Council committee meeting last week.
Last year, the City of Detroit received more than $826 million in American Rescue Plan Act, or ARPA, dollars — the fifth largest amount among American cities. Of that, $400 million was to address budget shortfalls and the remaining $426 million was for community investments. So far, the city has announced two efforts backed by these dollars — a jobs and workforce training and home repair program.
The Lee Plaza project is the first building construction or redevelopment funded by ARPA dollars in Detroit.
The city has said it plans to use some of the windfall of funds for blight remediation, foreclosure and homelessness prevention outreach, down payment assistance and vacant property cleaning.
Di Rita told the Free Press on Tuesday that a funding gap had been identified for some time and the federal dollars “saved the day.”
The city and developers are working to secure federal housing vouchers that will allow tenants to pay 30% of their income on rent and utilities. The units are expected to remain affordable for 45 years.
The project also received a key $25 million in low income housing tax credits from the Michigan State Housing Development Authority.
The next phase of the project — estimated to cost $20 million — will include restoring 60 to 70 units at market rate targeted to wrap up in 2025.
“We would like to make sure that people of all different types of incomes are living with each other,” Donald Rencher, the city’s group executive of housing, planning and development, said during a City Council committee meeting last week.
The developers also are looking to restore 7,000 square feet in main floor space.
“I’m confident that by the time we’re done restoring this jewel, people will be very interested in utilizing those spaces, whether for events or retail or other purposes,” Di Rita said.
Lee Plaza, located at 2240 West Grand Blvd. in the Northwest Goldberg neighborhood, was built in 1928 as a luxury apartment hotel and closed down in the late 1990s. The tower is currently listed in the National Register of Historic Places.
In 2019, the developers signed a $350,000 agreement with the city to purchase the building.
Free Press staff writer JC Reindl contributed to this report.