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Business

Big business as usual

Overlooking the little guy in Detroit's comeback.

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Published 1/12/2000

Chris Jaszczak says that he couldn’t be more pleased with the new development in downtown Detroit. He only wishes that the powers that be would include him in their plans rather than trying to buy him out and send him on his way.

In 1987, Jaszczak founded 1515 Broadway, a small award-winning theater between John R and Grand Circus Park. But the long-time arts enthusiast has been feeling a little uneasy about its future. Last summer, he says, the Greater Downtown Partnership, Inc. offered to buy his 6,000-square-foot building for an undisclosed amount and tear it down. The Partnership is a nonprofit made up of CEOs, bankers, millionaire entrepreneurs and Archer appointees charged with brokering real estate deals for the city’s Campus Martius district, which includes 1515 Broadway.

"They offered about a quarter of what others have offered," says Jaszczak, who says he has no intention of selling. He asked if the Partnership would lend him the money to refurbish the building’s exterior and allow him to pay back the loan with interest.

"I never heard from them again," says Jaszczak.

Jaszczak’s is not the only small business the Partnership tried to buy out or turned down for a loan. Other small entrepreneurs say they sought funding from the Partnership and the city to improve their businesses, but were told that no money is available. Yet it is small businesses that often give downtowns and commercial districts their flair and personality.

Meanwhile, hundreds of millions of public dollars are tied up in large developments such as Comerica Park, Compuware and the casinos.

Though downtown merchants say they welcome these projects, some fear that after years of commitment to the city – even during Detroit’s toughest economic times – they will be neglected or driven out.

Michael Simmons owns Simmons and Clark Jewelers, three doors north of 1515 Broadway. He says that the Partnership offered to buy his building last summer for an undisclosed amount. He was dumbfounded when the real estate group told him that they intended to replace his business with retail.

"We are retail," says Simmons, whose grandfather established the landmark jewelry store in 1925.

If Simmons did sell, the Partnership said he could lease back the building – which has been in his family for three generations – for two years.

"I love what they are doing," says Simmons about the new development the Partnership spurred downtown. "But I’m disappointed in the way they deal with people."

The Partnership did not return Metro Times’ phone calls.

Simmons points to the cracked sidewalk on his side of the street. On the other side of Broadway, the Detroit Opera House has been restored to all its glory with newly laid sidewalks, as well as lampposts and landscaping.

"Why would you do one side and not the other?" asks Simmons.

"It’s a matter of trying to prioritize," says Greg Bowens, press secretary for Mayor Archer. "I’m sure they are somewhere in terms of their sidewalks being done."

Ray Parker has been a Detroit real estate broker for more than a decade and owns the Hartz Building on Broadway, two doors from Jaszczak’s place. He suspects that the Partnership did not offer to buy his building because Parker is knowledgeable about real estate. He estimates that the buildings on his block are each worth at least $500,000.

"I was not going to fall for anything or entertain a conversation for the kind of prices they were offering my neighbors," he says.

Parker wants to convert the Hartz Building from offices to lofts, but says that is too costly to do on his own.

"The (building) codes are stiff and it makes it cost-prohibitive to do renovation without assistance from the city," he says.

Parker turned to the city and development groups for help, but was told that there isn’t money available for residential building.

"We don’t have the money to subsidize wholesale loft development," says Bowens. "Maybe we will eventually, but we don’t right now."

Bowens says the city put its money where it will have the biggest impact.

"What can I tell you, you have to go where you are going to get the most bang for your dollar."

George Petkoski says that he did not bother asking the city for financial assistance to do a downtown loft development.

"It was just understood that there won’t be any so why waste time on trying to get funds?" he says.

Petkoski owns the Wright Kay Building on Woodward and John R, where his firm, Petkoski Architects, is located.

He doesn’t fault the city for pumping money into large projects, but says it wouldn’t take much to subsidize smaller ones.

"You would be amazed at how little money it would take to solve our problems," says Petkoski. "They think they need to dump millions here too and they really don’t and that is a misconception on their part."

Bob Slattery, president of Midtown Development, is successfully converting apartment buildings into lofts near Wayne State University.

"I have done five or six projects and am just now getting credibility," he says.

Slattery says that the banks, city and Partnership pursue projects that will be completed within a relatively short time and have a big impact.

"They want big impact and less risk," he says.

The risk downtown is greater than near WSU where buildings are smaller and require less work, says Slattery. Buildings taller than three stories have to meet stiff city codes and are much more costly.

"On the surface it doesn’t seem fair, but it’s complicated," he says.

Slattery advises single building owners, such as those on Broadway, to approach the Partnership as a unified development project.

"It is a stronger project when you have more units," he says.

Linda Bade is the president of Detroit Downtown Inc., an association of 200 downtown businesses. Bade says that some businesses complained that they can’t get assistance from the city or groups like the Partnership.

"We are aware that they have significant difficulties and we think the first step is to bring the right people together and try and satisfy their concerns," she says. "I have great sympathy for them and understand their concerns and frustrations and feel it is our role to be a catalyst for change."

Bade says she will begin organizing a meeting with major development groups, the city and small downtown merchants this week.

Maybe then, longtime business owners will be able to get a piece of the pie – or at least a decent sidewalk.

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