Construction on no fewer than three hotels that are part of overall developments totaling at least $466 million have been slowed as a result of COVID. In addition, a $75 million hotel has halted construction as it attempts to secure more financing.
The biggest of them all, a proposed boutique 228-room Thompson Hotel in the $377 million development known as The Mid, has had its construction start date pushed back until at least June 2021, making the project about two years behind its initially announced schedule.
Representatives of the developer for the Midtown site north of Detroit’s Whole Foods were not made available for an interview, but instead offered the following statement:
“The Mid’s sponsor has been working on activating this site for the past two years with more than $27 million invested in the proposed development and we look forward to reengaging when we experience more market stability. We, too, are frustrated by the pause but remain bullish on Detroit and the commitments we have made and remain eager to break ground on this shovel-ready project in the spring/summer of 2021.”
In addition, construction on the planned 227-room, $45 million The Godfrey hotel in Corktown has been bumped back about six months, said Randy Wertheimer, president and CEO of Farmington Hills-based Hunter Pasteur Homes, which is working on the seven-story planned building at 1401 Michigan Ave. with Chicago-based Oxford Capital Group.
Wertheimer said construction was to begin by the end of the year, and while the design and entitlement process is expected to be done by then, construction is likely to begin this summer instead.
“We have 40 percent equity in the bank,” Wertheimer said. “At the time, it was easy getting a loan for 60 percent of our cost. That was the easy part of the deal. But because of COVID, the lending market now longer exists for hospitality today. Once the vaccine exists, we feel we’ll be the only hotel in the country with 40 percent equity.”
The $46 million AC Hotel by Marriott, which is being developed by Di Rita’s The Roxbury Group, is now expected to begin construction in the first half of next year, as opposed to the end of the year, as most recently planned, he said.
“We are still moving forward,” Di Rita said. He declined to comment on the two hotels his company has up and running: The David Whitney Building’s Aloft Detroit and The Element at the Metropolitan Building, both downtown.
“We do have to get to the other side of the current environment to move forward on that,” Di Rita said.
Construction at the $75 million Temple Detroit hotel at 640 Temple St. halted for three months as a result of Gov. Gretchen Whitmer’s executive order pausing all nonessential commercial building, prompting cost overruns that require an additional layer of financing that is currently being finalized, according to a source familiar with the matter. Construction stopped while that financing is being secured but is expected to resume in a couple weeks.
The project is being developed by Byzantine Holdings LLC, which includes Christos Moisides, executive member of Detroit-based 400 Monroe Associates LLC; Gretchen Valade, granddaughter of Hamilton Carhartt, who founded Dearborn-based workwear brand Carhartt Inc. in 1889; and David Sutherland, partner with the Wakefield, Sutherland & Lubera PLC law firm in Grosse Pointe Farms.