RESOLUTION AUTHORIZING THE
DEMOLITION/CLEARANCE COSTS FOR THE J.L. HUDSON BUILDING
BY COUNCIL MEMBERS CLEVELAND, COCKREL, EVERETT, HILL, HOOD, SCOTT AND TINSLEY-WILLIAMS:

WHEREAS, on or about December 5, 1995, the Detroit City Council (“Council”) approved an ordinance to amend and modify the City of Detroit Downtown Development Authority Tax Increment Financing Plan and Development Plan for Development Area No. 1 (the “Plan”); and

WHEREAS, said amending ordinance added the Land Assemblage Program (the “Program”) to the Plan; and

WHEREAS, under the Program the City of Detroit Downtown Development Authority (the “DDA”) was authorized to acquire land within the DDA's Development Area No. 1 and assemble same into attractive parcels of developable size; and

WHEREAS, the Program prohibits the DDA from using any of the $30,000,000 of tax increment funds appropriated for it for demolition and clearance until the DDA had submitted to Council, for its review and approval, the specific Program project which identities the real property to be demolished and cleared; and

WHEREAS, both the City of Detroit and the DDA agree that the demolition and clearing of said property, combined with available parcels in the area, will provide a strong incentive for major developers who are looking to participate in the resurgence of Detroit; now, therefore, be it

RESOLVED, by the City Council of the City of Detroit as follows:

  1. That the demolition and clearing of the J.L. Hudson Building, located at 1206 Woodward in the City of Detroit, is in the best interest of the City of Detroit and constitutes a public purpose.
  2. That this resolution supersedes the resolution adopted by the City Council on Wednesday, January 29, 1997, pertaining to the J.L. Hudson Building.
  3. That the DDA's request for demolishing and clearing the J.L. Hudson Building, together with all related costs thereof, is hereby approved and deemed authorized activities under the Plan.
Exhibit A
Downtown Development Authority
January 21, 1997
Honorable Council Members:

Re: Implementation of DDA's Assemblage Program

The City of Detroit Downtown Development Authority (the “DDA”) considers the latest events–1) the purchase of the Renaissance Center by General Motors and relocation of its Corporate Headquarters to downtown Detroit, 2) passage of the Wayne County Proposal S related to the County take to support the development of the Stadia Complex, and 3) passage of the State Proposal E related to the development of three casino facilities in the City of Detroit – to be of great economic development importance and impact for the City of Detroit.

As a consequence, the DDA, working in close relationship with the Greater Downtown Partnership, Inc. (GDPI), is ready to proceed with implementation of Phase I of its Land Assemblage Program, as described in its Tax Increment Plan and Development Plan for Development Area No. 1 (the “Plan”), last amended by the DDA and approved by City Council on November 13, 1996.

Section 407.9.2 of the Plan (“Land Assemblage”), among other things, states that “prior to expending any portion of the $30.0 million on demolition/clearance costs, the Authority shall present to the City Council of the City of Detroit for its review and approval the Land Assemblage Plan which identifies the real property to be demolished.” Since the DDA is now prepared to use a portion of its $30.0 million allocation for the Land Assemblage Progress, we have detailed below the activities related to Phase I of the of the DDA Land Assemblage Program:

Scope
City Council has authorized the transfer of the J.L. Hudson's property located at 1206 Woodward from the city of Detroit to the DDA. DDA proposes the demolition of that building to create a development site that may be expeditiously used to connect the Hudson's site with the Kern Block and the old Crowley sites and be made available for development.

Process
• DDA and the City of Detroit Planning and Development Department are in the process of executing the City Council approved approved transfer agreement for the J.L. Hudson's property.
• DDA to enter into contractual agreement(s) with consultant(s) and construction and/or demolition company re a) environmental assessment(s), b) environmental remediation, and c) demolition.

Cost Estimates
• Environmental assessment/remediation estimated at $3.0 to $4.0 million. Possible contribution from the State Department of Environmental Quality of $1.25 million.
• Demolition/Site Clearance Contingencies and other soft costs estimated at S9.0 to $11.0 million.
• Total estimated cost of $12.0 to $15.0 million with a concentrated effort by DDA and GDPI to keep the cost closer to S12.0 million. Timing J.L. Hudson building demolition and site clearance would require approximately 12 to 14 months from the time the demolition process commences.

Temporary site Disposition
The site will be graded, seeded and become temporary green space, with the end goal to be marketed and developed within a reasonable time frame. It will not be used for parking purposes. Attached please find a resolution for your review and approval.

If you have any questions, please call me.

Respectfully submitted,

ART PAPAPANOS

Adopted as follows:
Yeas—Council Members Cleveland, Cockrel, Everett, Hill, Hood, Scott, and Tinsley-Williams—7.
Nays—Council Member Ravitz and President Mahaffey—2.
†WAIVER OF RECONSIDERATION (No. 10) per motions before adjournment.

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