Owners of the Riverfront Towers apartments in Detroit are poised to cash in on a recent real estate trend and convert at least two of its three skyscrapers to condos.
The towers, located just west of Joe Louis Arena, might go condo early next year. Philanthropist Max Fisher and disgraced businessman A. Alfred Taubman own the property, which has been home to such luminaries as Rosa Parks and the late Coleman A. Young.
Key to the plan is a request to have the Detroit City Council designate the property a Neighborhood Enterprise Zone. Rehabilitated properties with such a designation get the taxable value of the parcel frozen for 12 years. In other words, the appraised value of the property prior to any improvements will stick for a decade and a deuce.
The trade-off for the city is that condo owners provide a more stable tax base than renters, who tend to move more often. For condo buyers, the frozen taxes, in combination with current low mortgage rates, can make ownership financially attractive.
“The Neighborhood Enterprise Zone tax abatement makes it more affordable for individual ownership,” says Roz Gietzen, assistant vice president of National City Mortgage Services. “If a developer converts to condo and gets the abatement, that coupled with the mortgage programs [available], makes it as affordable as paying rent.”
Owners of the Towers have the opportunity to cash in quickly while avoiding the hassles that come with maintaining an apartment building.
The council is scheduled to consider the enterprise-zone request Nov. 26.
But attempts to lure renters away have already begun.
The Millender Center recently sent a flier to Riverfront tenants telling them that, if they aren’t interested in buying a condo, there is another option: They can always continue to rent at — where else — the Millender Center!
If it proceeds, turning River-front into condos would follow a trend toward apartment-complex conversion along the Detroit River. Already making the change have been River Park Condominiums on McDougall, and the Rivertown Lofts, which made a partial switch and now offers purchase/lease options. (Rivertown is in an enterprize zone; River Park Place is not.)
“There’s momentum in the rebirth of Detroit that’s clearly gaining steam,” says Peter Cummings, a representative of Ram Development, the Florida company that would convert the Riverfront Towers. “And there’s a new generation of people who are just intrigued by the city. Riverfront apartments would be a first opportunity for a home ownership opportunity in the [immediate] downtown area.”
Cummings says asking prices will range from just under $100,000 to $300,000 for one- to three-bedroom units. We can only guess that the choice for tenants will be to buy or, uh, say bye.Send comments to [email protected]