By John Gallagher
Detroit Free Press
DETROIT (AP) - The real estate world moves in mysterious ways. Case in point: The former Kmart headquarters on Big Beaver Road in Troy, a modernist landmark and symbol of Oakland County's growth in the 1970s, remains vacant some 13 years after Kmart moved out. That's despite a great location and a rising real estate market.
What can explain it? The site is big - some 40 acres - so it will take a substantial project to swallow it all. And any new development is likely to first require the demolition of the sprawling old Kmart headquarters at considerable expense.
And the owner of the site, developer Nate Forbes, wants to take care that whatever happens there doesn't detract from the Somerset Collection mall across the street, which he co-owns.
"There are no major updates to announce other than they are still thoughtfully considering the right development for the space and location," a spokesman for Forbes told the Detroit Free Press.
Even so, one might think that a redevelopment might have taken shape before now. Troy's real estate market has done quite well in recent years, with office vacancy rates tumbling and new upscale restaurants popping up along Big Beaver.
And both the local and the national real estate markets have enjoyed rising prices for several years coming out of the Great Recession of a decade ago.
Today's high construction costs may be delaying things. Reportedly there have been discussions of a high-end hotel, restaurants and a bridge across Coolidge Road into the Somerset Mall. But nothing is public.
Admittedly, development projects generally take longer than we might expect. Major projects take the longest of all. The complex and lengthy process of lining up permits, arranging financing, overcoming objections by neighbors or nitpicking by local officials - all this means it's a rare project that gets done as quickly as hoped.
But the Kmart site, like the Packard Plant or Uniroyal site in Detroit, both still waiting for renewal decades after their prior use ended, remind us some development deals are even tougher than others.
The story of the complex dates to the late 1960s when the Detroit architecture firm Smith, Hinchman & Grylls designed it for the company.
Kmart was the successor to the old S.S. Kresge chain of discount stores that helped define how generations of American families shopped. Kmart, as the renamed company was called from 1977, became for a long time America's leading retailer. It based several thousand workers at the new headquarters.
Consisting of several interlocking modernist towers in a chocolate-brown hue, the complex became known as Fort Kresge. The decor included a tapestry by Picasso and a signed Andy Warhol poster. It was a forerunner of much more to come in Oakland County. Much of the rest of Big Beaver Road, including Somerset Mall, developed nearby.
But in 2006, after Kmart purchased Sears and moved its headquarters to Chicago, it left the building vacant. It's been empty ever since.
The complex was sold a couple of times, once for a reported $40 million or so and later for a much reduced price. A bunch of ideas have been floated to reuse it. But so far nothing has clicked.
Developers in 2007 unveiled renderings for the Pavilions of Troy, a $300-million walkable, outdoor-oriented mix of shopping, offices, residences and entertainment. There would have been a public ice skating rink, a 3,000-seat theater, restaurants, a grocery store and parking.
Public officials hailed it as just what Troy needed. The state approved tax credits to support it. But the project never survived the nationwide real estate bust and Great Recession that devastated Michigan's economy for years.
Along the way, the City of Troy has been tinkering with zoning and other steps to encourage new development along Big Beaver.
Glenn Lapin, economic development specialist with City of Troy, said the city is waiting patiently to see what Forbes comes up with.
"We talk to the owners and they've said over the past couple of years that they've been working on something for the site but nothing has come forth as of yet," Lapin told me. "I know that they're looking at something fitting. But they have not told us that it's anything specific that's being proposed."
He added, "I would guess, given the 40 acres, you'll see some sort of mixed-use development over there. I think that's what we would like to see."
I'm sure the site will find a new user at some point. The fact that a prime location has remained vacant for more than a dozen years just goes to show what I said at the beginning of this article - real estate moves in mysterious ways.
But as one Troy official told me several years ago, the 40-acre site remains prime real estate. Sooner or later, it should find a new upscale use.
"It's the corner of Main & Main," that official told me. "It's a fantastic site. It will get developed. It's just a question of how."
And when.
Published: Tue, Oct 29, 2019
