$80 million project is most ambitious planned for downtown Royal Oak

By DOUG HENZE
Of The Daily Oakland Press

When it comes to major loft space in the city’s downtown, the recently built Skylofts stand alone.
But that’s about to change in a big way. About 30 planned projects are expected to bring more than 800 new condominium units – many of them lofts – to the city’s skyline within the next several years.

“The market has just skyrocketed,” said Jerry Dettloff, Royal Oak’s downtown manager. “From a local economy standpoint, that’s a great thing for us. We’re building up the density in the downtown area, putting the main ingredient into that and that’s people, who will be there to support the shops and entertainment venues.”

Known for more than 15 years as the site of metro Detroit’s hottest nightspots, Royal Oak always lacked the downtown living boasted by large, successful cities such as New York, Boston and Chicago. Royal Oak Partners, a company set up by Chicago-based Morningside Equities Group, changed that with its 70-unit Skylofts at Main and Fifth streets, where residents began moving in late last year.

“They’re the pioneers,” Dettloff said. With little room for outward expansion, the only option for Morningside in creating downtown living space was to go up.

Now, other developers – targeting empty-nesters and young professionals with no children who are seeking an urban lifestyle – are following the developer’s blueprint, with plans to invest hundreds of millions of dollars in Royal Oak.

Palatine, Ill.,-based Joseph Freed & Associates has offered the most ambitious plan, with an $80 million-plus retail/office/residential project called Main North Lofts. To be built on five acres at the northeast corner of Main Street and 11 Mile Road, the development would ultimately consist of three nine-story towers with 265 residential units, about 88,000 square feet of retail space and about 27,000 square feet of office space.

“We’re really going to create an upscale atmosphere and extend downtown Royal Oak, which kind of stops at 11 Mile,” said Jim Colella, director of sales and marketing for Freed. “Royal Oak is just on an upward curve. It’s just beginning.”

Freed, which opened its Main North sales office three weeks ago, already has sold 54 units, Colella said. The company is partnering with MJM Group LLC on the project.

Although the developers haven’t received final city approval yet, they expect to start construction of the first phase of Main North in mid-November. Retail spaces would be ready by November 2005 and the lofts would be available by first-quarter 2006.

The first phase would consist of the North Tower, just north of the Main Art Theatre, and the East Tower. The South Tower would be built if and when the theater decides to relocate from the land it leases from Freed.

Main North units will range from 1,000 square feet to 2,500 square feet and sell for $270,000 to $750,000 in the North Tower. Information isn’t yet available for the other towers.

The first phase of Main North, which will require demolition of the Oak Ridge Market, also will bring about 500 public and private parking spaces to the downtown.

“Royal Oak is the kind of community that draws from the entire metro area and beyond,” Colella said, when asked why his company chose to make such a substantial investment in the downtown. “There’s diversity, there’s shopping, there’s access to 696. That’s where the activity is. You can walk right out your front door and be at a restaurant, rather than having to get in your car.”

Freed is well aware of the many competitors operating under the same assumptions, Colella said. But the company believes there’s room enough for everyone, he said.

“People are saying, ‘Boy, there’s a lot of competition in Royal Oak right now,’ and we say, ‘Bring it on,’ ” Colella said. “We talk to the competition and the competition talks to us and everybody is doing well. The more people who see other people moving in, that starts the ball rolling.”

One of Freed’s competitors, Mark DeMaria, said people in the Chicago market were concerned about oversaturation in the mid-1990s, but opportunity there remains. DeMaria is a principal with Royal Oak-based Denali Development Group, which plans to construct The Metro Lofts, a 30-unit, four-story building on the southeast corner of Main Street and Harrison Ave.

“There’s not that much housing in (downtown) Royal Oak,” DeMaria said. “I think there’s going to be a huge demand. I don’t think it stops.”

Denali, which expects to break ground next week on the $10 million project, will offer lofts ranging from 1,300 square feet to 5,100 square feet and selling for $320,000 to $820,000. Selling points include a 1,500-square-foot community rooftop garden, and patios ranging from 400 square feet to 680 square feet.

Denali, which expects the units to be ready by spring 2005, has sold 19 units since July 17 and projects it will sell out by sometime in October.

The Metro Lofts will try to set itself apart from the crowd with an urban industrial look that will include interior brick walls, exposed steel joists, galvanized steel ceilings and concrete floors.

“It will look like a vintage, industrial-style warehouse that you would find in the industrial areas like SoHo (in New York City),” DeMaria said.

“Me and my partner traveled to many different cities – Boston, New York, Chicago – all the major downtowns where lofts are very prevalent. We took a lot of the best of what we saw from everywhere and really tried to incorporate it into this project.”

Because the building will be new rather than a converted warehouse, it will have a more efficient heating and cooling system, high-speed Internet access and security cameras that tie into cable television, DeMaria said.

Freed and Denali are only two of the players in the new Royal Oak loft/condo market. Joining in the fray are:

(#1) Chrysos Development & Management Co., which plans to put 92 condos plus ground-level retail at Washington and Fifth streets – a project known as The Fifth;

(#2) 610 South LLC, which already has started construction of its 18-unit Troy Street Lofts near the intersection of Troy and Sixth streets;

(#3) Morningside, which has plans to expand the Skylofts concept to a second project called Skylofts Market Square at 11 Mile and Curry roads at the current site of Select Inns Kitchenettes.

Also in the planning stages, just outside the downtown, is Southfield-based Schostak Bros. & Co.’s Gateway Plaza, a mixed-use development at the intersection of Main and the I-696 service drive.

Dettloff said he has faith that all the loft/condo developments planned for Royal Oak can co-exist.

“I don’t think developers want to invest their time and money into projects theydidn’t think there was demand for,” he said.

“If I were a developer, I certainly wouldn’t put up anything on a whim. Yeah, realistically, they can survive.”