Wayne County strikes deal to sell Guardian Building neighbor

Wayne County is close to selling the squat building hugging the eastern wall of the iconic Guardian Building in downtown Detroit.

The vacant, 30,000-square-foot building on Woodward Avenue between Campus Martius Park and the riverfront has been seen as an obstacle in the county’s financial recovery, which includes offloading unused space.

Pending Wayne County Commission approval, Zaid Elia of Birmingham-based Elia Group plans to buy the glass-covered building at 511 Woodward Ave. for $4.65 million. It neighbors Wayne County’s municipal offices in the 40-story, also county-owned Guardian Building.

Wayne County officials said the tentative deal would include a move of the Downtown Detroit Partnership from its current headquarters at One Campus Martius, which is also home to Quicken Loans Inc. The DDP operates parks and oversees programs aimed at improving downtown.

The building’s renewal would feature a welcome center on its ground floor for the county and city, with involvement from both the county and DDP. Downtown hasn’t had a welcome center since Detroit Experience Factory’s closed this spring, and County Executive Warren Evans said to his knowledge the county hasn’t operated an official one in recent memory.

Elia plans to invest more than $9 million in the Woodward building built in 1972. The total comprises the purchase price and a substantial redevelopment that would include remaking its distinctive exterior.

“We intend to completely modify the glass, change the entire façade of the building, make it more modern, approachable, exciting and unique in the sense that it’s the only building that’s not a high rise in that area and that gives us the unique opportunity to stand out,” Elia said.

The potential buy is part of Elia’s strategy to invest in “landmark” locations in Detroit. He bought the Mercier Building on Fort Street, which houses the Anchor Bar. Elia also owns the Ford Building downtown, and the restaurants Fountain Detroit and Parc in Campus Martius Park with developer partner Matthew Shiffman and 220 Merrill in Birmingham.

He hasn’t yet signed on an architect or general contractor for the incoming project. Other redevelopment decisions have yet to be made — whether Elia Group would expand the building, for example.

Either a retail tenant or a restaurant operated by Elia’s Iconic Collection brand would take a spot on the ground floor next to the welcome center, he said. He would place office tenants in the three upper floors.

DDP CEO Eric Larson said his organization is “committed” to the potential deal that would include moving its operations.

The 40-employee DDP currently resides in 10,000 square feet in the Dan Gilbert-owned One Campus Martius building, formerly the Compuware Building. The DDP subleases from a Compuware spin-off company, not directly from Dan Gilbert’s real estate firm Bedrock LLC, Larson said. The partnership oversees various planning strategies and programs, including the Business Improvement Zone that provides cleaning, safety and lighting services.

He said there’s no firm schedule for moving, as the DDP has around a year left on its sublease term.

“We are very pleased and honored we could potentially do this partnership,” he told Crain’s. The DDP is “continuing to build on its strategy to be closer to the community we serve.”

The tentative deal with Elia Group isn’t the first time the building has publicly neared a sale in recent years.

Under previous county Executive Robert Ficano, the Detroit-based developer Roxbury Group had considered a $1.8 million deal for the building. Wayne County’s economic troubles and an incoming administration scuttled the plan.

In the new, tentative deal, the rest of the $4.65 million sale price would go to the county’s general fund, after payback of approximately $2 million on bonds.

Wayne County’s bond rating has been improving as it reaches a “more normal” operating environment, analytics firm S&P Global Inc. said in June. The rebound has been credited to cost-cutting measures led by Evans, including a consent agreement and recovery plan, and better fiscal and operational management. The county was released from state oversight in 2016.

The 511 Woodward Ave. building has been vacant at least since Evans took office, county spokesman Jim Martinez said.

“It’s been sitting there generating no revenue by way of sales, no action by way of use of the building,” Evans said. “This is just another small milestone in the whole recovery plan that we’ve followed almost to a T so I think we’re doing much better.”

A large chunk of the puzzle will be getting construction underway on its $533 million criminal justice complex at East Warren Avenue near the I-75 service drive. It would replace the long-scrapped “fail jail” site on Gratiot Avenue.