A proposal going before the Southfield City Council on Monday would transform the shuttered Northland Center into perhaps the state's largest mixed-use apartment development, sparing the mall and the former J.L. Hudson's department store from demolition.
In all, across two phases, Bloomfield Hills-based Contour Companies LLC's ambitious vision for 97 acres of the 120-acre site would bring 2,885 apartments, lofts and townhouses across three different components. It would also converting the old Hudson's store into 337,000 square feet of food, home furnishing and entertainment space akin to Ponce City Market in a former Sears Corp. catalogue facility in Atlanta.
Bruce Kopytek, chief architect for Contour Companies, told the Southfield Planning Commission late last month that where other developers planned to demolish the mall, his company sees value in keeping it.
"Other proposals had put forth the idea of demolishing the shopping center and saving the Hudson store, but in our opinion there was attractiveness to the original shopping center," he said. "It would be nice to restore this building, it was a pioneer when it opened and really was a national news story at the time."
Northland Center was the largest shopping mall in the world when it opened in 1954 at what the Detroit Historical Society says was a cost of about $30 million. It was enclosed two decades later. Its mix of other amenities, including things like auditoriums, art, fountains and landscaping, were models for malls across the country, the historical society says.
Contour — which is registered to David Dedvukaj — is proposing building 1,339 new workforce apartments in 14 five-story buildings, with six of those containing 95,000 square feet of first-floor commercial space along Greenfield Road consisting of things like restaurants, doctor offices and other uses.
In addition, the existing Northland Center's first-floor retail spaces would be converted into 254 residences such as live-work units or artist lofts, Kopytek said last month.
And the former Hudson's store would be turned into Hudson City Market, rounding out the first phase of the project.
The second phase along Northwestern Highway and on J. L. Hudson Drive would bring an additional 1,292 units, Kopytek said during the planning commission meeting. City Council documents say the second phase includes some townhomes, although the precise number is not known. Another component of the plan involves turning the power plant into a community clubhouse and keeping the water tower; some of the artwork from the mall is expected to be saved, as well.
Mayor Kenson Siver said Sunday that it's possible the second phase of housing would ultimately become something else, contingent upon how the 45-acre first phase goes. Other uses could be hotel and/or office space.
On Monday, Contour is seeking a four-year commercial rehabilitation district tax abatement on the property, which the city bought for $2.4 million in 2015 and has been working on finding a reuse for ever since.
Siver said Contour is paying $11.1 million for its 97 acres in a sale approved by City Council Oct. 5. He said the deal is expected to be finalized in January. Construction would begin in the spring. They have made a $500,000 deposit and spent more than $800,000 on things like engineering, architecture and consulting services, Siver said. The city said also said Sunday that Contour would pay for "the cost of demolishing the J.C. Penney building, later mall additions and the 1974 enclosure of the free-standing structures."
"They are very, very deep into this," Siver said. "You don't put down that kind of money, you don't spend that much on their dime in engineering, architectural, consulting work if you're just going to (walk away from the project)."
In addition to the tax abatement, the city expects brownfield financing to be part of the financing stack, Siver said.
"Contour is a highly credible development team with an outstanding opportunistic outlook," said Kevin Dillon, a senior managing director in the Southfield office of multifamily real estate broker Berkadia who is not involved in the deal, said Saturday. "They've been very successful with all the developments they've done so far."
The shopping center, once anchored by Hudson's, J.C. Penney and Target, closed and saw its first wrecking ball in 2017.
David Dedvukaj told Crain's on Sunday that his family's multifamily real estate business started with his father, Pete, in New York about 30 years ago and the family moved to this area in the mid 1990s.
"The majority of our work has been in the Southeast," the younger Dedvukaj said. "This project gives us a chance to come home."
He said Contour has apartment developments in the works in Northville and Lake Orion, but none as large as the Northland vision.
"A project this scale, there's not many, but in the last five years alone we have close to 10,000 units of developments and redevelopments," he said.
Dedvukaj said Joseph Nathan, former Compuware Corp. president and COO, is now Contour's CFO.
The current vision for the Northland Center site would result in the largest apartment development in the state.
According to CoStar Group Inc., a Washington, D.C.-based real estate information service, there are only two apartment complexes in Michigan with 2,000 or more units:
- The Harbours Apartments in Clinton Township, which has 2,388 units built in 1989. It is owned by Bloomfield Hills-based Edward Rose & Sons across 49.6 acres.
- The Somerset Park apartments in Troy, which has 2,226 units across 250 acres north of Maple Road and east of Coolidge Highway. In 2015, the 48-building complex sold for $216 million to New Jersey-based the Solomon Organization LLC.
The Northland development would have 2,885 residences, beating out The Harbours unit total by more than 500.
Even before the COVID-19 pandemic, malls in metro Detroit — and around the country — had faced a dire retail climate.
For example, New York City-based Green Street Advisors, said in a spring report that more than 50 percent of the country's some 1,000 or so malls' department stores could close by the end of next year, CNBC reported. Three-fifths of them have department stores.
Locally, some malls, such as Northland Center and Summit Place Mall in Waterford Township, had shuttered entirely.
Others, like Lakeside Mall in Sterling Heights ($26.5 million to Miami-based Out of the Box Ventures) and a portion of Eastland Center in Harper Woods ($3.125 million to Great Neck, N.Y.-based Kohan Retail Investment Group), were struggling, selling to new owners with a variety of plans.
Even once-prominent malls like Fairlane Town Center in Dearborn, which is under the new management of Fort Worth-based The Woodmont Co. and defaulted on its $135.7 million loan, and The Mall at Partridge Creek in Clinton Township have faced severe challenges, with the latter's owner being in default on a $725 million note it used to purchase the property and others in 2014.
Summit Place, which is on the Waterford/Pontiac border, has been torn down and awaits users as part of a $63 million plan by Southfield-based Ari-El Enterprises Inc. to redevelop it as the Oakland County Business Center. His company bought the property for $3.7 million.
Siver said there have been myriad uses proposed for the 120-acre, but none have come to fruition.
He said a plan for what the Southfield Sun reported in August 2019 as 10.4 acres of Greenfield land that involved a retail development by Bloomfield Hills-based AF Jonna Development LLC fell apart earlier this year. That was around the time that discussions with Contour began, Siver said.
"When the deal collapsed, (City Administrator) Fred Zorn suggested they look at developing what Arkan Jonna and his partners walked away from," Siver said. "They said, 'Yeah, we are very interested.' They said, 'We can do more than 10 acres. How about 33 acres? Anyhow, today they are taking 97 acres. Not only are they developing our vision, but they are exceeding it."
In addition, a plan for medical office space for Acension Providence ultimately fell through, although about five acres of the site has been reserved for a parking lot, Siver said.
The Southfield Sun also reported in August 2019 that Northland Renaissance Place Development was to pay $8 million for about 80 acres of the site that would be turned into "a medical campus, housing, retail and a medical marijuana facility." An email was sent to Adam Jahnke, an attorney who registered the entity, on Sunday morning.
Among the other suitors that never panned out: Costco Wholesale Corp. (NASDAQ: COST), which was considering a Costco Business Center location at the property, and Emagine Entertainment Inc., which toured the property, according to Siver. An email was sent to Emagine Founder and Chairman Paul Glantz on Sunday morning seeking comment.
"The city purchased Northland because we wanted to control the destiny of this very strategic and historic property," City Council President Lloyd Crews said in a statement. "We turned away factories, light manufacturing, medical marijuana, big-box retail, warehouses and logistics centers and held out for development that would grow our tax base and population. This redevelopment will provide our community and residents something that we can all enjoy and be proud of for years to come. I truly believe that this mixed-use redevelopment will also serve as a model for other communities across the country."
In an interview, Siver added: "It was worth the wait as we went through a lot of ideas and proposals. It paid off to keep selling our vision."
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