Warren Mayor Jim Fouts speaks in front of the City Council about the proposed development.

Warren Mayor Jim Fouts speaks in front of the City Council about the proposed development.

Photo by Brian Louwers

Officials present plan for development in Warren

By: Brian Louwers | Warren Weekly | Published July 16, 2021


WARREN — Developers, financial advisers and administration officials, including Mayor Jim Fouts, appeared before the City Council on July 15 to present plans for the long discussed and anticipated Warren Town Center development.

The proposed plans call for an initial $30 million in bonds to leverage another $140 million in investments from developers in the Civic Center north of 12 Mile Road, adjacent to City Hall and across Van Dyke Avenue from the General Motors Technical Center. Warren’s Downtown Development Authority would supply the land and bond for initial “gap funding” to start the project.

“We have a chance to fulfill a dream of Warren leaders for 55 years,” Fouts said, adding that while he and council members have “often agreed to disagree” about many things, he hoped they would support a development he called a “game changer” for Warren.

But already, not all of the city’s elected officials shared the mayor’s enthusiasm about the plan after members of the administration, the development team and city advisors presented their case for moving forward with the project at this time.  

During his presentation, Tom Bommarito, director of Warren’s Department of Community, Economic and Downtown Development, told council members that the city's investment would be paid back over 20 years with new business tax dollars from developers, captured through the DDA, and by additional transformational brownfield redevelopment credits through the Michigan Economic Development Corporation.

“This plan will not cost Warren taxpayers money,” Bommarito said. “First and foremost, all Downtown Development Authority dollars come from the business taxes in the district. There are no residential taxes that go to the Downtown Development Authority.”

The city's assembled development team includes Gibbs Planning Group, Flaherty & Collins Properties, Acquest Realty Advisors, Inc. and Acquest Development. Plante Moran and MFCI were brought in as advisors to review the proposed financials and the city’s process for selecting the development team.

Robert Gibbs, founder and director of the Gibbs Planning Group, described the plan as a "small town" development creation in scale.

“It is the future of shopping centers and retail today,” Gibbs told council members. “I hate to call it a shopping center, but the better retailers and the better developers today want to build safe, walkable mainstreets where they can out-compete the internet and out-compete the big-box retail because it’s a safe place where people can go and enjoy themselves and have friends.”

The proposed commercial development would include 60,000 square feet of space, with 20-25 retail units, including a grocery store, and an initial phase of 250 one-, two- and three-bedroom residential units, with rent ranging from $1,100 to $2,500 a month.

Developer David Flaherty, CEO and principal of Flaherty & Collins Properties, appeared before the council with Brian Prince, the company’s vice president of development, principal and the lead developer for the Warren Town Center project. 

Flaherty said his company isn’t the largest developer in the country but is perhaps the largest in “highly specialized” mixed-use urban developments, built with public-private partnerships.
“We know what we can do. We know what it takes to get things done,” Flaherty said. “We’ve done it again and again, and that holds true here in Warren, as well. We know what it takes to make this happen and that is what we will be able to do. It’s not just pretty pictures and fluff and an idea. We’ve done it time and time again.”

Prince told council members that the vision for the space around City Hall, on the east side of Van Dyke, adjacent to the City Square splash pad and skating rink, would be to create “an activated plaza, streetscape, where everyone can feel comfortable to come.”

“We want the live, work and play environment. We think this would be huge,” Prince said. “Having the GM Tech Center across the street, TACOM, Cadillac, a number of other businesses that I think will benefit from this development being here, and really activate this 24-7, not just at a lunch hour. We want this to be an active area for the city in the evening, as well.”

A 210-room Marriott "Tribute" hotel was proposed with a 5,000-square-foot ballroom and a reflecting pool, a restaurant with outdoor dining and a rooftop terrace with a bar overlooking the city. The hotel portion would be developed by Acquest, with Barton Malow as the builder and Rabun Architects. 

Joe Perez, principal with Plante Moran, said the firm vetted the development team, examined the plan and ran the numbers at the request of the city. 

“Based on all of our due diligence and our review of that project and all of their numbers, we are sort of giving our thumbs up, that it is in line with the current development environment, in line with what other developers would do,” Perez said. 

He added that the calculations in the development budget were reviewed, relative to the financial projections, to make sure that the development incentives that were being provided by the city of warren were in line, and that, “They very much are.”

Perez said Plante Moran aided in the development of the letter of intent and the proposed development agreement for the project based on their review.  

“We made sure that there’s appropriate protections in there for the city and that essentially, on paper, what they’ve said they’re going to deliver, they have to deliver, that the guarantees that they said they’re going to provide, that they’re in place in the documents,” Perez said.  

John Axe, of the Clark Hill law firm, the city’s bond counsel, said he was confident that the development would generate the funds projected to service the bonds.

“The good news is that interest rates today are much lower than they have been in, actually in anyone’s experience in this room,” Axe said. “That is a real advantage in the marketplace. We’re able to retire the bonds at a lot lower interest rate. It gives you a bigger cushion, I guess you could say, in the financing. We believe this particular project as it’s being proposed will not only do what we think it will do, it will probably do better than we think it would have six months or a year ago because of the interest rates.”

Steven Burke, president and a financial advisor with MFCI, said, “Historically, if we were to issue bonds today, we may be issuing bonds at the lowest rates ever on the  municipal markets. It’s certainly a great time to be a borrower, maybe less so a saver in this environment.”

City Council members were told an approval of the plan this summer could put shovels in the ground this time next year, with an expected project completion in 2 1/2 to 3 years, and that the "classic public-private partnership" would generate an estimated $250 million annual economic impact, at no cost to residential taxpayers.

“We believe that now is the time,” Bommarito said. “We believe every administration has moved this down the path. We’ve worked on this long and hard.

“We’ve had consultants help us through the process. Interest rates are at all-time lows. There are some costs that are going out of line right now, but because the interest rates are staying low, these numbers still work.”

Bommarito added, “If we don’t act now, between the inflation costs and interest rates eventually going up, this deal will fall apart on its own. 

“We’re excited about this. We feel this is truly transformational for Warren,” Bommarito said. 

Reached for comment on the plan on July 20, Warren City Council President Pat Green questioned whether the project would qualify for state brownfield redevelopment credits. He also said the plan lacked a public purpose.

“I’m still against it, and I’m not against the downtown. I think it’s a beautiful project. The statute requires a public purpose, and this is not a public purpose,” Green said. “This is $30 million in taxpayers’ money going to a private corporation to develop it.

“They’re trying to sell us on it, but that’s not something we’re allowed to do,” Green said.

In a statement about the proposed development, Warren City Treasurer Lorie Barnwell said that no women and no younger people sit on the city’s DDA board. Barnwell said while she has been an advocate for a downtown development, she would like to see something that appeals to residents across the city, as well as businesses and out-of-town guests. She also pointed to other areas of Warren, as well as the city’s parks and roads, currently in need of added investments, repair or renovation. 

“Residents can feel that the downtown is just another added feature that they can’t enjoy,” Barnwell said. “That’s why the city must partner with the developers and GM to push for another good anchor that will include everyone. We have so much untapped potential and so many projects that could be done on south Van Dyke and by the Chicago and Mound area. Let’s also see some plans to create downtown districts in those places.”

Barnwell’s concerns echoed those of some of the residents who spoke after the presentation.    

Bommarito said the city has been working on development elsewhere, along Van Dyke where the Civic Center South and new Burnette Branch Library were built north of Nine Mile Road, where a new fire station is also planned.

“I think we could do a whole project on what’s going on in the south end. I don’t think that’s an either or proposal,” Bommarito said. 

The downtown development deal, he said, took nearly four years to piece together. He said it’s the right project in the right place, adjacent to Warren’s existing municipal facilities, to add something that will attract new residents, particularly well-paid young professionals and “empty nesters.” He said it would also help stem the flow of $7 million in economic “leakage” that leaves Warren, as residents go elsewhere for entertainment and higher-end shopping and dining.

“Instead of that leakage we talked about, we’ll have people from other cities in Macomb County coming to spend money in our downtown,” Bommarito said. 

 It was not immediately clear when the plan would be considered by the council. The next regular meetings were scheduled for July 27 and Aug. 10. 

“We have no plan to put it on the agenda at this point. The first presentation of the project was just a week ago,” Warren City Council Secretary Mindy Moore said on July 21. “There are many issues to be considered and examined, and we do not want to rush a project with such a large commitment of captured funds.

“We need to ensure any project in the Civic Center benefits all residents in Warren, not just those that can afford to stay in a five-star hotel, lease a $2,500/month apartment, eat in fine dining restaurants and buy Shinola watches,” Moore said.