By R.J. King – Article on (Photograph by David Lewinski)

By embracing basic business principles like capital management, board oversight, and long-term planning, Detroit’s flourishing cultural district is marching past $2 billion in redevelopment.

For months, Detroit’s Midtown district had been rife with rumors that the Detroit Red Wings were planning to build a new hockey arena in the region’s main cultural center. In certain areas, particularly near freeway exits and those bordering large parcels, land prices were rising, and the speculation was curtailing efforts — many with an ambitious green sensibility — to build upon Midtown’s strength as one of the region’s most impressive areas for growth.

With more than 100 Midtown projects in development or under construction, including the restoration of the historic Garden Theatre and the revival of the Sugar Hill Arts District, land speculation is the last thing the community needs.

“You wouldn’t think, given the economy, that land prices would be a problem, but they were in some areas,” says Scott Lowell, who with his wife, Carolyn Howard, has built up housing and hospitality companies that include nine rehabbed apartment buildings in Midtown. They also run the Bronx Bar and the Traffic Jam & Snug (Carolyn’s brother, Paul Howard, is a partner in the Bronx, while all three own Cliff Bell’s in downtown Detroit).

One notable Midtown site said to be in play for an arena was a large parcel set between the Masonic Temple and the MotorCity Casino (both owned by the Red Wings’ principals, Mike and Marian Ilitch) — on land that has long been slated for urban renewal. In fact, the former Jeffries East housing project at the Lodge and Temple has been demolished and is now being redeveloped into a $39-million, 180-unit housing project slated to open in late 2010.

The project is part of $2 billion in new and redeveloped projects in Midtown since 2000, placing it on par with the 15-year restoration of downtown Detroit. Midtown has been doing so well that city officials now point to it as a beacon of renewal. “I know some Detroit residents like to say downtown has been redeveloped at the expense of the neighborhoods, but Midtown and other areas of the city are receiving attention,” says George W. Jackson Jr., president and CEO of the Detroit Economic Growth Corp., a quasi-public development agency.

Like Washington, D.C., where economic recessions are largely offset by steady government employment, Midtown benefits from two main anchors — the Detroit Medical Center and Wayne State University — which collectively employ around 15,000 workers and educate more than 30,000 students. Nearby, Henry Ford Hospital, the Detroit Institute of Arts, the College for Creative Studies, and numerous other institutions stand as major contributors to the district in terms of employment, visitors, and patronage.

It is that economic stability that has helped spare Midtown the full effects of the current economic recession. While housing prices are down (like most everywhere else), Midtown, bounded by the Fisher and Lodge freeways, along with I-94 and I-75, has benefited from a large concentration of rental housing, which is especially popular among students and graduates just entering the job market. The variety of housing also stands out — from $600,000 condominiums to historic lofts to studio apartments to dormitories recently constructed by Wayne State.

That, in turn, drives demand for restaurants, storefronts, entertainment, services, and cultural activities. But Midtown is no flash in the pan. “People like to think of Midtown as an overnight success, but the real groundwork began in the early 1990s,” says Ernie Zachary, president of the Midtown architectural and urban-planning firm Zachary & Associates. “And since that early momentum, the development hasn’t stopped. In fact, it’s only gotten better.”

Business owners say part of Midtown’s success stems from Detroit’s standing as one of the nation’s most democratic cities in the country. Why? The city was built for 2 million residents, but now has less than half that population. The loss of tax revenue, combined with the fact that city services are still required across more than 140 square miles, has put a major strain on the municipality’s overall economic health.

As a result, neighborhood-redevelopment efforts often flow up to the respective city agencies, instead of filtering from the top down. “When I came back to Midtown after college (in 1987), I saw all the parts were here,” Lowell says. “They just needed to be put together. The city has many challenges, but part of what makes Detroit great is that residents can have their say. Plus, if you want to learn how to do development, Detroit’s your city.”

What makes Midtown and other districts like it stand out — think New Center, Lafayette Park, southwest Detroit — is a strong, central planning agency that works much like a corporation, with regular board and committee meetings, financial reviews, a planning department, and a multitude of other services.

In the case of Midtown, the nonprofit University Cultural Center Association assesses grants, works with foundations, originates lending partnerships, organizes community events (like the former Detroit Festival of Arts, and its replacement, Midsummer Nights in Midtown), and acts as a developer, whether on its own or in partnership with the private sector.

It also has the stamina to wait out delays caused by red tape. For example, the Inn on Ferry Street, a 40-unit bed-and-breakfast set in four historic Victorian mansions and two carriage houses just north of the DIA, took more than a decade to develop. “They were slated to be torn [down] for parking lots,” Zachary says, “but now [they] stand as a symbol of what perseverance can do.”

Sue Mosey, president of the UCCA since 1988, says the Inn on Ferry Street and other projects like it often require a plethora of resources in terms of assembling multi-tiered financial packages, tapping historic tax credits, or working with various federal, state, and local governmental departments. “It’s tough for any developer to see a project through, especially historic redevelopment,” she says. “Where we have been successful is by building up relationships across a broad spectrum of people and agencies and sharing those with everyone who’s here, or is looking to move in.”

For example, Mosey spearheaded the drive in the late 1990s to designate some 300 buildings in Midtown as historic structures. The move helped bring stability to the district and allowed developers to sell historic tax credits to help fund redevelopment efforts. As the buildings began undergoing restoration, Mosey and the UCCA were there at every step of the way as advocates, financiers, and community partners.

Such fortitude wasn’t lost on those entering the neighborhood. “There’s no other place I know like Midtown where you can go and get all your questions answered as it relates to permits, façade grants, or dealing with the city,” says Ryan Cooley, owner of O’Connor Real Estate on Michigan Avenue in southwest Detroit. Along with his brother, Phillip, and chef Brian Perrone, Cooley is also co-owner of neighboring Slows Bar B Q.

Slows, meanwhile, is planning to open a catering kitchen, smokehouse, carryout operation, and private dining room at Cass and Alexandrine next year in Midtown. The 6,000-square-foot facility will include two large smokers to meet rising demand for pulled pork, ribs, and brisket, while allowing the partners to branch out into corporate hospitality (their kitchen on Michigan Avenue can’t be expanded).

Nearby, developers George Stewart and Michael Byrd are working to redevelop the block north of the Max M. Fisher Music Center on Woodward, from Selden to Alexandrine. Seeking to recapture the block’s illustrious past, the pair is hard at work restoring the Garden Theatre. Designed in 1912 by C. Howard Crane (most noted for the State and the Fox), the Garden was the architect’s first neighborhood theater.

Long closed, the Garden Theatre is slated to reopen next year as a 600-person entertainment venue for corporate events, concerts, and social gatherings. Already, a construction crew is adding a 320-space parking deck behind the facility, along with three levels of commercial space fronting Woodward.

On the block, the former Blue Moon restaurant is expected to be reopened under another name and operator, while Zakoor’s Novelty is slated for demolition, with a planned six-story structure (two levels of commercial space, four floors of residential) to take its place. Zachary expects the $20-million project, which has been in the planning stages for nearly a decade, to be completed by the end of 2011.

But despite all of its progress, Midtown must still adapt quickly to changing trends. While historic tax credits have long been a favored investment, the downturn in the real-estate market has cooled demand nationally. That’s affected some projects in Midtown, but the UCCA has helped identify other investment sources, including federal stimulus funds and energy grants.

For the latter, a geothermal project is planned in the district that could provide tax credits of up to 30 percent for property owners. The project would help supply heating and cooling to surrounding buildings near the Museum of Contemporary Art Detroit, including the neighboring Sugar Hill Arts District at Woodward and Forest, where new and renovated housing is under way, complemented by new retail offerings and galleries.

Large development is also part of the mix. The Detroit Medical Center will soon start work on a pediatric clinic across from Children’s Hospital, while the former Newberry building across from the Karmanos Cancer Institute will be converted into residences. Wayne State, meanwhile, recently completed an expansion of its engineering center, along with a medical library, while additions are being planned for its chemistry building and law school.

In turn, the Detroit Science Center recently finished work on a university prep school for math and science, while Henry Ford Hospital completed a three-year, $310-million expansion in July that includes the state’s largest intensive-care unit. Meanwhile, Lowell and urban finance consultant Corey Leon have started work on restoring the historic Forest Arms, a 1905 apartment building that was struck by fire last year. The brick-and-stone structure at Forest and Second is slated to reopen in 2012, following a $9-million renovation that will include 74 one- and two-bedroom apartments, as well as commercial space.

Soon after the fire destroyed the roof and top floor, the city planned to demolish it. “But we were able to stop the demolition and save the building,” Lowell says. “With the renovation, we’ll add solar panels on the roof that will provide heat and hot water for the residences. It’s a great selling point.”

An early advocate of conservation, the UCCA, in conjunction with the city and a host of partners, is installing a 2-square-mile greenway reserved for pedestrians and carbon-free transit (a twist on traditional ring roads at large shopping malls), while a large community garden for restaurants and residents was recently installed by the UCCA at Second and Willis.

A green alley program, meanwhile, will be initiated off Second Avenue between Canfield and Prentis, just one block west of the Whitney. The effort includes native plants, energy-efficient lighting, a waste-and-recycling center available for monthly lease, storm-water collection, and recycled and permeable pavers.

Over time, the program may also be expanded to other alleys.

Seizing upon the strength of many organizations — often by necessity — the UCCA-assembled alley team includes the nonprofit organization Green Garage, the Kresge Foundation, DTE Energy, the Americana Foundation, as well as neighboring businesses such as Motor City Brewing Works.

“Midtown will continue to grow and thrive,” says Bud Liebler, owner of the Whitney restaurant and president of Detroit-based PR firm the Liebler Group. “It’s one of the places, like Ann Arbor, that you can point to and say it’s vibrant and growing.”

To be sure, development will advance even more now that the Red Wings have notified the city that they intend to renegotiate their lease at Joe Louis Arena. “One thing that makes the UCCA stand out is their long-term planning,” Zachary says. “There’s no scramble at the end of the year to shore up their finances or reassign their staff. Instead, they have the unique ability to focus on the big picture while managing the day-to-day needs of a growing community.”