Inn fighting 

Plans by the Ilitch organization to demolish the long-vacant Madison-Lenox hotel are facing pointed questions from downtown preservationists and an investigation from the city agency that oversees the fates of historic buildings.

Detroit’s Historic District Commission has had the building under a “demolition by neglect investigation” since June 2001. The process could lead to civil action if the building’s owner, Ilitch Holdings, fails to repair the structure.

Meanwhile, the city’s Downtown Development Authority has loaned Ilitch Holdings $700,000 to tear down the hotel, which sits in the 15-year-old Madison-Harmonie Historic District.

The Madison-Lenox was built circa 1900. Aside from a short-lived club called 246 that operated on its first floor during the 1990s, it has been vacant for 30 years.

Friends of the Book-Cadillac (FOBC), a preservation group that brokered a deal last year to save the historic Book-Cadillac Hotel, claims that Ilitch Holdings has rebuffed a potential developer and has failed to complete due diligence necessary to justify demolition. FOBC says due diligence would involve proving to the Historic District Commission that the hotel has deteriorated beyond salvation.

A city ordinance requires owners of historically designated properties to get a demolition permit from the commission. If there were opposition, the matter would receive a public hearing. The demolition is planned for next spring, but Ilitch Holdings has yet to apply for a permit. The firm would initially replace the building with a parking lot.

Kristine Kidorf, historic preservation specialist for the commission, explains that the neglect “investigation” is a monitoring process designed to encourage owners to properly maintain their buildings.

“We make a list of the exterior problems and give it to the commission,” she says. “The owner is invited to talk to the commission. Based on that, the commission determines whether the building’s being demolished by neglect.”

Ultimately, the commission can ask a court for permission to make the needed repairs itself, then put a lien on the property to recoup the expenses. The commission is currently seeking court approval to do that to a home in the Boston-Edison district.

Kidorf says the Madison-Lenox is one of 80 buildings on the commission’s list of monitored sites.

FOBC representatives met with Ilitch Holdings’ general counsel Jay Bielfield in August to propose a plan to redevelop the property. FOBC member Francis Grunow attended that meeting, and says his group was told that Ilitch Holdings would take the plan seriously if a developer could be found. Grunow says they found an interested developer, but that Ilitch Holdings has not responded. Grunow would not reveal the name of the developer.

On the other hand, Bielfield says a developer hired by Ilitch Holdings to assess the building recommended demolition. He would not identify who that developer was. Bielfield offered little additional information, saying Ilitch Holdings believes the building must be razed.

“The city is cooperating with the Ilitches on demolishing the building,” says Walter Watkins, Detroit’s chief development officer. “We’ve heard the dissent, but we feel it’s one of Detroit’s lingering problems, that problem being not acting on these older buildings for such a long period of time that they become uneconomical to develop. We respectfully disagree with the Friends of the Book-Cadillac, because we’ve talked to developers who say it’s not feasible.”

Asked what developers the city has consulted, Watkins indicated that the city is deferring to Ilitch Holdings.

“I saw some figures, but we have not really gone through an analysis [of the cost of preserving the building],” Watkins says. “They [Ilitch] are the owners, and they have told us it’s not economically feasible. We tend to believe their assertion.”

Still, the Ilitches are sending mixed messages. In a Sept. 9 letter to the commission, Ilitch Holdings indicated it was pursuing a “dual path on whether to rehabilitate or demolish” the Madison-Lenox.

Fred Beal, an estimator for Ann Arbor-based J.C. Development Inc., and developer Jon Carlson surveyed the property for Ilitch Holdings almost two years ago. Beal advised the Ilitches that the $700,000 city demolition loan could be used to stabilize the structure. He says he has not been able to get a return phone call from them since.

“Can the building be saved, structurally?” Beal asks. “The answer is certainly yes. Almost any structure can be saved if you put enough money into it. The second question is, can the building be saved at a cost that suggests you can afford to save it, which means will you be profitable? The answer is yes.”

An FOBC report that updates a 1996 study by Zachary and Associates projects that a parking lot would generate $207,460 in annual revenue. A renovated hotel, they project, could generate $5 million annually.

“It’s a wild-ass guess,” says Blair McGowan, FOBC member and president and developer of St. Andrew’s Hall. McGowan helped to come up with the formula to make the projections. “That’s the truth. When people do these kinds of things, they take guesses. They try to make them educated guesses, but they’re just guesses.”

McGowan says those guesses are based on current occupancy rates for hotels, and on commercial activity.

“When you have a specific hotel, you fudge [projections] up or down, based on what you think is real,” he says. “In this case, you fudge it up because you have the Opera House and the stadiums nearby.”

Grunow says FOBC hasn’t given up on saving the Madison-Lenox.

“This building has to go through a public review process,” says Grunow. “They [Ilitches] haven’t gone before the commission. We’ve gone before the commission. It’s our belief that the commission would deny the [demolition] request at this time, based on our findings, and based on the fact that the property owner has not done due diligence. The last thing that is public record says that the building is renovatable.”

Calls to Ilitch Holdings to find out what has been done on the question of due diligence — that is, steps taken to apply for the permit and prove that the building should come down — were not returned by press time.

“If the FOBC wants to save it, pay us the fair amount for the property and they can save it,” Bielfield says.

“The friends have about $500 in our bank account, so that’s not an option,” Grunow counters. “We’re not a multimillion-dollar organization like Ilitch Holdings. ...

“We’re working on identifying a developer that could possibly purchase and develop it.”

Bielfield says the parking lot is a short-term plan.

“It’s a redevelopment plan,” he says. “We’re not keeping it as a parking lot, long-term. We’ll study what’s best for the use of that property, and then we’ll build something long-term in its place.”

“Show us the plan,” says Grunow. “Short-term parking lots as responses, how often does that lead to anything? Maybe they have a plan for the site. Show us the plan. Show us the use. Show us the benefit for the city of Detroit. Show us the study that says parking is the greatest need for the area.”

Khary Kimani Turner is a Metro Times staff writer. E-mail

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