Vacant since 1993, auto plant will transform into housing with state funding

A project that will convert a sprawling, blighted auto plant into housing has landed state support.

The Michigan Strategic Fund awarded the Fisher Lofts 21 project an $8.5 million loan, a $1.5 million grant and an $8.7 million tax break during its Tuesday board meeting.

The state money supports the $154 million redevelopment of Detroit’s Fisher Body Plant 21, a historic auto factory that’s been vacant for more than 30 years.

David Howell, vice president of real estate and development service at the Detroit Economic Growth Corporation, said the project activates a building that’s “been a symbol of decay and blight” for too long.

“For years, residents and visitors to our great city have driven past this iconic structure, seen from both I-75 and I-94, sitting in ruins and covered with graffiti,” he told the Michigan Strategic Fund board.

The developer Fisher Lofts 21 LLC, which is comprised of Jackson Asset Management, Lewand Development and Hosey Development, plans to transform 500,000 square feet of the auto plant into 433 apartments, retail space, co-working space and more than 700 parking spaces. At least 20% of the units will have below market-rate rents.

The Fisher Body Plant is considered by the state “one of the largest blights still standing” in the city of Detroit.

It opened in 1919 on Piquette Avenue, which later became a bustling industrial district where automakers such as Ford, Studebaker and Cadillac had assembly plants. General Motors took over the six-story plant in 1926, and it ended up producing parts for aircraft during World War II as Detroit become the “arsenal of democracy.” After the war, the plant assembled bodies for Cadillac limos until General Motors discontinued the Fisher Body division in 1984.

Fisher Body Plant 21 was then sold to a paint company and later abandoned in 1993.

It stood empty for decades, becoming an eyesore with broken windows and covered in graffiti. The city of Detroit took ownership of the building in 2000. It had planned to demolish the plant until the Fisher Lofts 21 development team proposed its vision for the building in 2022.

“This project will redevelop one of the final reminders of Detroit’s challenges into a celebration of its automotive history and the possibility of the future,” said Brittney Hoszkiw, deputy group executive of economic development with the city of Detroit.

In the past two years, the project has secured significant state and local support.

The city is backing the project with tax breaks totaling $39 million, including a Neighborhood Enterprise Zone tax exemption valued at $25 million, an Obsolete Property Rehabilitation Act tax exemption worth $1.4 million and local Brownfield tax capture valued at $12.6 million.

The City of Detroit also committed $6.9 million and Wayne County committed $2.5 million to the project.

Additionally, the development was awarded a $5 million grant through the Detroit Economic Growth Corporation, a $5 million grant through a state budget allocation and a $1 million remediation grant from the Michigan Department of Environment, Great Lakes and Energy. It was also given a Federal Historic Tax Credit Equity of $24 million and a New Market Tax Credit Equity of $3.6 million.

Howell said this project is " one of the more complex capital structures” the Detroit Economic Growth Corporation has seen in several years.

“That said, how the private and public sectors rolled up their sleeves to make this project a reality is a textbook example of a true public-private partnership that could easily serve as a case study in any MBA real estate finance class,” he said.

Related: Michigan boosts funding to turn historic Detroit auto plant into housing

The Fisher Lofts project is one of several redevelopments in Detroit’s Milwaukee Junction neighborhood, including a $40 million project to convert a former Studebaker sales center into affordable housing and turning a former Cadillac plant into lofts.

An Australian company is also planning to turn a vacant six-story auto factory on Piquette Avenue – near the historic Ford Piquette Plant where Henry Ford invented the Model T – into a $210 million electric vehicle battery assembly plant.

Howell says Fisher Lofts, expected to open in 2027, will anchor the transformation of the neighborhood.

“It is also a sign that development is robustly moving outside the city’s core, and that neighborhood development in the city of Detroit is alive and well,” he said.