Coronavirus Crisis Complicates Ferndale’s DOT Parking Deck Project
(Crystal A. Proxmire, April 14, 2020)
Ferndale, MI – The Development on Troy, aka the DOT, faces a new round of problems in the wake of the coronavirus outbreak.
The $20 million project was expected to include street level retail as well as office and retail space with the goal of increasing revenue and bringing more people to the downtown during the daytime. But like many projects across the country, plans for the dot are changing.
Construction on the DOT has been stopped since March 23 because of the Governor’s “Stay Home Stay Safe Order.” While some construction activities have continued through the state, projects deemed “non-essential” are on pause.
But that’s not the only challenge for the project.
At the Monday April 13 city council meeting, City Manager Joe Gacioch presented information updating the public on several budget-related items including the DOT.
“The COVID-19 impacts have had immediate impacts and turned this project upside down,” Gacioch said. “Our developer Versa has lost their bank loan term sheet, and a few of their investors have walked, mainly, anecdotally, because cash is king right now.
“They want liquidity with an unknown market. So with that being said my focus is to complete this project and focus on getting a parking development open.”
In order to make that happen, the city is temporarily putting the mixed-use features – the office, retail and residential – on hold, and the city will need to use a loan from the general fund to complete the parking portion of the deck while they renegotiate the terms with Versa for the full project.
In an email Tuesday morning, Gacioch said “At this time, I have asked for a $2 million loan, many of these expenses would have otherwise been shared with the developer as part of the office construction. Honestly, the final picture is uncertain until construction resumes and we better understand the impacts of COVID-19 on actual construction costs. This is new ground for everyone involved in this project, it will take some time to sort through.”
The funds would be repaid from the city’s parking fund which brings in revenue from parking fees and tickets. In February the City approved a $1 million change order to help advance the project when city administrators realized that some of the design work for the fourth floor had not been completed or included in the planning. The $2 million includes the remaining costs associated with that change.
When the deck opens, it will include the decorative façade, the streetscaping, and the alley improvements. But it will not, for now, include the upper floors seen in the renderings. The timeline is unknown. In ideal circumstances it could be completed in under six weeks, however there are a number of factors likely to delay the work, including the large number of construction projects that have been disrupted, unknowns in the supply chain for materials, the likelihood of labor force issues and adjustments for social distancing. (Note: This story has been updated to include the factors that could impact the timeline)
“This is extremely disappointing,” said Mayor Melanie Piana. “I said I would never approve a stand-alone parking deck, and sort of here we are. The priority is getting it open, getting it functional, so we can be part of the recovery process now of supporting our Downtown business community. And as I said at our last meeting, we’re hitting the pause button on a lot of investments.”
But the city remains determined. “We’re still in the game,” Mayor Piana said, adding that the DOT will, eventually, “get us towards our goals of more people living and working in our downtown.”
“The mixed use development remains to be a core component of how we approach development, codified within our ordinances, and so we will continue to focus on the office and the residential and the street level retail with this developer moving forward,” City Manager Gacioch said. “It’s not a question of if, it’s just when… We will get there.”