New Beginnings

A greenway runs through it. A river runs by it. Freeways cross it.

Institutional, business, and residential development border it. Remnants of its industrial past are still vital in manufacturing plants on its periphery.

It is Detroit's common ground, the place where working people can still have a home with a yard and live in a neighborhood, with access to schools, churches, convenience shopping, as well as health care and professional businesses.

Among the vacant and deteriorating residential structures, new homes are emerging. Many in old neighborhoods are resilient in the face of overwhelming challenges. There is a sense of place here. And hope. People care about this place. They are ready for their community to rise again. Others are ready to return to the area they called home or where they want to live – when new housing is available. The area is on the cusp of market-rate housing and busy retail districts along Gratiot and Mack avenues.

There is plenty of openness – not so much vacancy as space to rebuild a critical component of Detroit's urban core--and there are several active community development agencies looking for investment partners.

The Near East Side of Detroit is a region poised for revival.

Defining opportunities for revitalization

A study conducted for the Community Foundation of Southeast Michigan analyzed the challenges and opportunities in the Near Eastside. While it examined existing research, the study also conducted focus interviews with more than 200 community stakeholders – including residents, employers, and non-profit leaders in the areas. It reveals a more thorough understanding of the demographic and physical neighborhood characteristics, development under way, and housing marketing trends. It notes the challenges, but also the opportunities to build on assets. This new body of knowledge reveals promising investment opportunities.

Much is known about the development in Midtown, Downtown Detroit and East Riverfront. Less is known about the grassroots activity among community development and faith-based organizations within the heart of the Near East Side. The business, cultural, and medical institutions in Midtown and the General Motors/riverfront renaissance are visible evidence of upscale potential.

Freeway and major avenues like Gratiot, Mack, and Jefferson, make the Near East Side an excellent location. It boasts easy access to the riverfront, as well as the health and cultural assets of the city.

Most of the area is residential, with pockets of light industrial remaining along Mt. Elliott and I-75. Commercial presence in the area is found along Gratiot, in Midtown, and on the riverfront, but other than scattered convenience stores there is relatively little else in the area.

The density of housing, mostly north of Gratiot Avenue, has remained about the same since 1990, suggesting that the residential capacity is relatively stable, according to the Community Foundation study. Also, the quality of the housing stock varies tremendously from neighborhood to neighborhood, even on individual blocks. About 29 percent of the housing units are owner-occupied. The average home value is less than $40,000, with historic home values much higher. And there has been an increase in the number of sales and the average sales price. In 2001, 24 homes sold for an average price of $30,599 whereas in 2006 165 homes sold for an average of $45,044, the study notes.

In some neighborhoods, the majority of housing stock is sound and is viewed as an asset. These neighborhoods, attractive to new residents, contain single-family and multi-family households. Other areas have greater vacancy and the housing stock is older and in need of repair. However, there still is potential for aggressive home repair assistance and infill housing.

Seizing development opportunities

To understand the Near East Side, one needs to examine its local assets: schools, churches, neighborhoods and parks. It is as it always was – a cluster of neighborhoods for common folk. Gratiot Woods is an example of those neighborhoods. Situated on the northern point of Gratiot at I-94, it is a stable neighborhood that has had more than $5 million in private and non-profit investment in recent years, largely through the work of the Detroit Catholic Pastoral Alliance, which sponsors a community development corporation in the area.

The vision of the Alliance is to recreate the neighborhood with an updated concept of "a true urban experience," says Christopher Bray, director of Housing and Development for the Detroit Catholic Pastoral Alliance. The group is promoting residential density through different types of housing – single-family infill units, townhouses, mixed use live/work condos, and high rise senior apartments. This, he says, will create a diverse community of people.

The Alliance, which owns 150 lots in the area, has renovated 16 homes and built 16 new infill homes, inspiring homeowners to invest in home improvement. In its second phase of development, it is offering 15 single family homes, 15 townhouses, and 30 loft condominiums for $135,000 to $150,000.

"Once we get to that pricing level and are able to sell those units, a market-rate developer is able come in and make some money on a development," Bray says.

The city's vision concurs. "You do affordable, then what happens, you have a neighborhood that's coming back (and) there may be an opportunity for market rate," says Christopher Lee, a city planner. "Market rate is going to be hard – you can't do it right now. We’re building houses in neighborhoods that haven’t seen them in 40 years. To do that is really a stimulation just to see that happening. Some may want to move into their own neighborhoods that they used to live in years ago."

He says that the city's Planning Department is conducting a study to determine the amount of money leaving the city in terms of discretionary expenditures, such as buying clothing or furniture, to show the real market potential of Detroit.

Community development options

Investors need to look at Gratiot and other main streets, and then identify active community development corporations, says Harriet Saperstein, retired president of HP Devco, the Highland Park development corporation. "There are very active CDCs (in the area) that know what they're doing and have been working with the community to build affordable housing," she says. "Affordable housing has people living in them who have to spend their money on groceries and clothes and other kinds of things that bring retail back."

Gratiot serves as a kind of retail spine, projecting out from downtown. Its new pavement almost suggests that it's a new community somewhere several miles away. The Alliance envisions mixed-use, live-work development in its area. The agency, which works out of a 10,000-square feet renovated nightclub building, is already developing an existing building into retail space and upper lofts. It plans three other new buildings along Gratiot.

As non-profits prepare the market for commercial residential development, the Alliance also believes it can help create a retail market. Franchise businesses, including Domino's Pizza, are exploring opportunities in the area. Also, an independent coffee shop/bakery may be locating there.

 "We envision this whole Gratiot corridor to be thriving with commercial development," Bray says. The Alliance is currently developing the adjacent Corsi building into lofts and retail space and plans three new mixed-use developments along Gratiot, with a total investment of $13 million.

"In an area that doesn't have much commercial development at all, generally office space tends to be a nice transition toward more retail-oriented development," Bray says. "It might need a higher mix of office space first with the goal of trying to achieve more retail amenities."

Vacancy is opportunity

It's easy to dismiss the area by listing its deficiencies – vacant tracts of land, dilapidated housing, abandoned factories and businesses. Space is also an opportunity, as the Community Foundation reported. There is a great deal of vacant land as the result of aggressive cleaning of abandoned and deteriorated properties over the past 20 years. The City of Detroit maintains a listing of land under public ownership. Also, the Wayne County Land Bank Authority manages tax-reverted properties and helps redevelop them.

Saperstein points out the area's strengths, such as bargain-priced real estate and resources like Neighborhood Enterprise Zones and the Michigan Interfaith Trust Fund. "You have some of the most undervalued property that can be found in Detroit in general," she says. "I would like people to be investors, not speculators. Investors look at what they're doing – not how quickly they can turn it over to someone else who actually does the development. An investor is concerned with development, not just making money."

Faygo Plant and Offices

Corsi Building

Gratiot Woods Homes

Leland Lofts

Directions to the Near East Side

From the North:
Take I-75 S toward DETROIT. Take the I-75 exit- EXIT 51B- toward TOLEDO. Take the GRATIOT AVE / M-3 exit- EXIT 51B- on the LEFT. Take the GRATIOT AVE NORTH / M-3 ramp. Turn SLIGHT LEFT onto GRATIOT AVE / MI-3. End at Mack Ave & Gratiot Ave and arrive in the Near East Side.

From the East:
Take I-94 W toward DETROIT. Take the GRATIOT AVE / M-3 exit- EXIT 219. Turn RIGHT onto MI-3 / GRATIOT AVE. End at Mack Ave & Gratiot Ave and arrive in the Near East Side.

From the South:
Take I-75 N toward DETROIT. Take the GRATIOT AVE / M-3 exit- EXIT 51B- on the LEFT. Take the GRATIOT AVE NORTH / M-3 ramp. Turn SLIGHT LEFT onto GRATIOT AVE / MI-3. End at Mack Ave & Gratiot Ave and arrive in the Near East Side.

From the West:
Take I-94 E toward DETROIT. Merge onto I-96 E / JEFFRIES FWY via EXIT 213B toward CANADA. Merge onto I-75 N via the exit on the LEFT toward FLINT. Take the GRATIOT AVE / M-3 exit- EXIT 51B- on the LEFT. Take the GRATIOT AVE NORTH / M-3 ramp. Turn SLIGHT LEFT onto GRATIOT AVE / MI-3. End at Mack Ave & Gratiot Ave and arrive in the Near East Side.