Henry Ford teams with Pistons owner, MSU on $2.5B development

Henry Ford Health Systems and Detroit Pistons owner Tom Gores are leading a $2.5 billion plan to transform New Center into a “vibrant, walkable community” with a new hospital, housing units and amenities. 

The project, announced Wednesday during a press conference at the Pistons Performance Center, would be anchored by a new hospital and medical research facility across the street from Henry Ford Health’s existing hospital on West Grand Boulevard. Gores’ Platinum Equity firm also plans to acquire Henry Ford Health’s administrative headquarters and redevelop the building into 550 units of residential housing and retail space alongside new parks and basketball courts. 

“I have been with Henry Ford for over four decades, and I have attended some amazing groundbreakings or ribbon cuttings. Nothing comes close to this,” said Henry Ford Health CEO Rob Riney. 

Details on how the project will be financed were not revealed Wednesday, but officials said it will likely entail multiple sources of public and private funds. The projects are expected to trigger Detroit’s community benefits ordinance, which requires developers of large-scale projects to commit to public investments negotiated with a neighborhood advisory council. 

Dr. Adnan Munkarah, executive vice president and chief clinical officer at Henry Ford Health, said the development partners will consider combining the projects to seek transformational brownfield funding. The state program allows developers to capture a portion of tax increases generated from large projects to reimburse expenses, so long as they prove the project has a “transformational” impact on the local community.

Riney used words like “transformative,” “revitalized” and “state-of-the-art” to describe the plans, which include a partnership with Michigan State University to develop a new research institute. Construction on the hospital project is expected to start next year and finish within the next five to six years. 

“If you see the vision of what has been pulled together here, this is not the building of a hospital,” said Mayor Mike Duggan, who also took part in the announcement. “This is the building of a world-class medical institution in an academic setting tied into the community.”

Pistons Vice Chairman Arn Tellem said 20% of the 550 residential units, a total of 110, are expected to qualify as “affordable” housing, which would meet a city requirement to receive public subsidies. Tellem said rental rates and unit sizes haven’t been determined yet. He also said the total cost of housing and amenities envisioned by Gores’ team hasn’t been finalized. 

“Public financing is customary with projects this big, but we’re still looking at all the options with more details to come in the future,” Tellem said. “This will have a huge impact. This will be a destination. This is only going to be a catalyst for more development in the surrounding areas, and it’s really going to extend this development into the neighborhoods of Detroit.” 

Tellem spoke on behalf of Gores during the presentation. He said Gores sees the Pistons organization as a “community asset that can inspire people and affect change.”

A video presentation played during the press conference framed the project as the latest in a line of community investments dating back to Gores’ acquisition of the Pistons in 2011. This includes moving the basketball team to downtown Detroit from Bloomfield Hills, partnering with Wayne State University on a new arena for its teams and the Pistons’ NBA G League affiliate, completion of the Pistons Performance Center as well as the donation of community basketball courts and creation of a $20 million community center in Rouge Park.

“This is a great American city that we all love,” Tellem said. “We’re all rowing in the same boat here. No one is doing this independently. We’re all trying to do our part to add to this revitalization.” 

The project drew comparisons to the $1.5 billion District Detroit vision proposed for the north end of downtown Detroit by Olympia Development and Stephen Ross’ Related Companies. District Detroit developers also are seeking transformational brownfield funding. Duggan joked that his economic development team were looking forward to a break after working on District Detroit “down the street.”

The mayor, who previously worked as CEO of the Detroit Medical Center, also touted the new announcement as “truly visionary.” 

“We’re going to need folks to work in these expanding programs, people of all incomes,” Duggan said. 

The new hospital, to be located south of West Grand Boulevard and west of the Lodge Freeway, would have a larger emergency department and private rooms for patients. The legacy hospital would remain in operation but with a smaller clinical footprint, connected by underground tunnels and pedestrian bridges. Plans also call for a new multi-level parking structure. 

The Health Alliance Plan building at 2850 W. Grand Blvd. would be torn down to make room for a new “tower” building housing the emergency department, surgical intervention and intensive care units. HAP has some administrative offices within the building that will relocate, but most of HAP’s operation is now based in Troy. Munkarah said the new tower could be as large as the iconic Fisher Building a few blocks away. 

Munkarah said the number of hospital beds will not increase from the current number of 877, but the rooms will have more space and only have one patient in each. 

“From a patient privacy perspective, from a safety perspective, from a conflict perspective, from a care perspective, it makes sense not to mix people,” Munkarah said. “This is where we need to go because it’s important for patient care … We are looking at what is being built around the nation. We are really looking at the hospital not of tomorrow or the day after, but the hospital of 15 to 30 years from now.”