Developers present new South Main Street plans, including hotel

By: Victoria Mitchell | Royal Oak Review | Published January 31, 2017

 The Royal Oak City Commission extended planning time Jan. 23 for two developments envisioned on the city-owned parking lots south of the downtown.

The Royal Oak City Commission extended planning time Jan. 23 for two developments envisioned on the city-owned parking lots south of the downtown.

Photo by Victoria Mitchell

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ROYAL OAK — City commissioners unanimously extended an exclusivity agreement Jan. 23 to develop city-owned property on South Main Street.

The commission voted to grant a third extension to Burton-Katzman LLC for an additional 120 days, and listened to changes from an original concept for the city-owned properties located at 600 and 700 S. Main St.

“Due to increased interest from office tenants and a hotel tenant, they have decided to change the footprint of the project,” said Todd Fenton, Royal Oak economic development manager.

Fenton explained that the plan originally included mixed-use developments, including office, residential, retail and an interior parking deck.

“That has been taken out,” he said. “Their current proposal is a boutique hotel with retail in the first floor adjacent to an 80,000-square-foot office building with attached parking.”

Burton-Katzman Development Partner John Pavone said what really drove the change in the design was the market asking for more square footage in office space, and recent interest by a hotelier.

“The moral of the story is, the only way to accommodate large floor plates was to move the office from the southern property to the northern property, and then the hotel fits perfect on the southern property,” he said, adding that the two building uses would share parking well.

Pavone said he is confident the newly revealed plans would be the highest and best use of the property.

“We’ve taken about a year’s time now … to sort of market this project to the user community,” he said.

Pavone said interest has been strong from a tenant looking for about 55,000 square feet of space, and from Cambria Hotels.

The proposed plan also includes adding and replacing parking on the lots that the project would inhabit.

City Commissioner Jeremy Mahrle said there is a lot he likes about the project, including attracting larger tenants looking for bigger spaces.

“The only sort of hesitation I have at all — besides this being a third agreement and speaking just for myself, maybe the last extension here — the only other hesitation I really have is the parking issue,” he said. “I’m not entirely convinced that what you’re adding is going to be enough to offset the demand for what you’re building.”

Mahrle said he understands this is early on in the process and nothing has been officially proposed.

The development team said it will be conducting a parking study and would further explore the zoning requirements when it first appears before the Planning Commission.

“I think this time around, you guys have done some market research, you got some feedback from your original plan, you guys have the capability to adapt, you have some — at least for me — some evidence in front of us that you’re not just shifting and fishing, that you’re getting close to something being completed here,” Mayor Michael Fournier told the development team.

Fenton said he hopes to be back in front of the commission with a vetted development plan sometime in the next couple of months.

If the project receives approval, nothing could be started on the property until after Arts, Beats & Eats, because the property serves as the festival’s main-stage area.

Early on in the process, Burton-Katzman officials agreed that they would work with the city and festival producer Jon Witz to keep the property available for the 2017 Labor Day event.

An exclusivity agreement with Burton-Katzman was extended in July 2016, followed by a second extension in October 2016.

On Jan. 25, 2016, the City Commission granted Burton-Katzman’s request to be designated the preferred developer of the two properties for a period of six months.

The development team’s credentials include many nearby projects, including the 325 building on Old Woodward Avenue in downtown Birmingham, which houses Fleming’s Steakhouse and Google on the main floor, with office space above and a multimillion-dollar residential penthouse on the top floor.

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