THE NEW GILDED AGE (Part 2)
THE NEW GILDED AGE (Part 2)
An Interview with Mark Bodnar of Lakeshore Development on the Progress of a Pivotal $6 Million Investment in Downtown Saginaw
13th February, 2014 0
The two buildings that stand at the corner of East Genesee and Washington Avenue that are now known as the Bancroft/Eddy Complex are in many ways architectural crown jewels, symbolic of commerce, that in addition to the Temple Theatre, Castle Museum, and Hoyt Library, are two of the most important buildings in the City of Saginaw.
For decades the Bancroft was Saginaw’s largest and most prestigious hotel – it’s Crystal Ballroom serving as the region’s premier site for hosting an event; and the Eddy Building sitting kitty-corner from the Bancroft, served as one of the area’s most prestigious office and retail addresses.
Back in 1982 both of these eminent structures underwent conversion into low-income units for the elderly and handicapped and became HUD properties, with tenants receiving housing vouchers, along with a slew of problematic controversy that soon quickly ensued.
Today, however, thanks to the efforts of Lakeshore Management, based out of Cleveland, Ohio, both the Bancroft & Eddy buildings are poised at the precipice of a true renaissance in Downtown Saginaw. With an investment that is anticipated to hit the $6 million dollar mark, the Eddy Building has been completely restored and now has 12 tenants occupying the 30 units available for lease. Replete with modern appliances, granite countertops, and hardwood floors, the Eddy now stands as one of the premier housing developments in Saginaw County, offering reasonable rates and some of the finest rental units one will find throughout the entire Great Lakes Bay region.
With the Bancroft still undergoing restoration and a Coffee Shop & Wine & Martini Bar set to open in late Spring of early Summer, both of these developments are pivotal to the renaissance that has been on-going in Downtown Saginaw, which includes the renovation of The Temple Theatre, the new First Merit Event Park, and the recently opened Michigan Works building. This comes in addition to the headquarters of the Saginaw Community Foundation and the former GM/Wickes Tower, which is now home to a number of businesses and non-profit organizations; and is also accompanied by the opening of the new Central Michigan University Medical School.
Recently I had the opportunity to sit down with Mark Bodnar of Lakeshore Management and one of the principle partners involved with the Bancroft & Eddy restoration projects to discuss his vision for the Downtown Saginaw area, the genesis of these ambitious projects, and how the current arc of his considerable efforts with the revitalization of downtown Saginaw is tracking.
Despite the setbacks presented by this harsh winter weather, his mood was upbeat, his tone positive, and his insights equally intriguing as they were valuable.
Review: I suppose a good place to begin would be with your own background. How long have you been involved with Lakeshore and what prompted your interest in real estate development and rehabilitation?
Bodnar: Well, the owner of the these two projects is a Michigan company called the Bancroft Project Saginaw that is owned by several different members, which my wife and I are two of the members. I have been involved with developing apartments and commercial real estate for the last 25 years, mainly focusing upon apartment buildings. Our specialty is turning low income and distressed apartments into market grade dwellings, eliminating the ‘low income’ component from the equation. Over the last 25 years we’ve tackled projects in Ohio, Indiana, Michigan, and Kentucky, along with a few other places. But I would say over that expanse of time we’ve probably developed anywhere from fifteen to twenty projects.
Review: Is the Bancroft & Eddy Buildings your most elaborate or involved restoration projects to date?
Bodnar: They aren’t the largest or the most expensive, but by far they have been the most complex, difficult and challenging – all of those things, actually. These are definitely not easy projects, but they have been immensely rewarding.
Review: What is it about these buildings that appealed to you and why did you want to get involved with turning these buildings around?
Bodnar: Honestly, I didn’t know much about Saginaw apart from driving past it down I-75 as a kid when I was returning home to Cleveland. But someone told us about these buildings when we were visiting one of our properties down in Kalamazoo, so one day when I was on my way back to Cleveland, I decided to stop and take a look at them. We immediately fell in love with both the Bancroft & Eddy Buildings because of their historical significance. They’re both sitting on the most prominent corner in the city of Saginaw and we were amazed at the potential of these two under-utilized structures.
I would say they are two of the top five buildings in all of Saginaw, so we fell in love with them first and then thought taking them on would be right down our alley because we specialize in turning around distressed properties. After we got into it a little more, we started to really like the City of Saginaw as well. It’s an amazing town and the people are unbelievably helpful. Saginaw has a small town feel and citizens within the city are really positive about the change and optimistic and passionate about seeing these buildings turned around.
Elected and city officials have been really helpful. With a lot of cities that we go into, the local elected officials can be difficult to deal with; but in Saginaw, it’s been a very positive experience. Of course you have pessimistic people as well as optimistic people in any town that feel it will never change, but being from Cleveland, I’ve seen and heard similar arguments, especially with the Warehouse District. Twenty years ago people in Cleveland thought the downtown was lost and now today it has completely turned around.
We viewed Saginaw as a small Cleveland. 20 years ago nobody would consider living downtown, even though people would work there. Now today you probably have 10,000 to 15,000 people living in downtown Cleveland and it’s a very vibrant area.
With Saginaw we couldn’t believe that this amazing entertainment district existed with the Dow Event Center and the Temple Theatre and all the museums, with people coming into the city yet almost no restaurants around to accommodate them. It is the strangest thing and we never saw a city like this. You have maybe 10,000 people working at the two hospitals and the band and ATT&T downtown, so we thought that some of these people must want to live downtown, and all we needed to do was build them a good product and get some restaurants open and the whole area could be transformed into a very cool place to live.
Review: What has been the most challenging component involved with these restoration projects?
Bodnar: That’s a good question because the challenges happen on a daily basis. You have a lot of moving pieces involved with these projects such as historic tax credits coupled with a revitalization grant we are trying to get from Michigan and the City of Saginaw. Both have been receptive and great to work with, but parking is also not an easy issue to address. So the sum total of all these moving pieces and dealing with a historic renovation is not like the usual projects that we take on. Everybody is looking over our shoulders to make sure things are done correct historically on the renovations, so there really isn’t one major thing that’s a challenge – it’s all these moving pieces that we are trying to get together. It has not been an easy project, but it has been a very rewarding one. We just got the chandeliers cleaned and restored in the Bancroft Ballroom and are almost finishing with the painting of it. The terrazzo still needs to be polished, but are coming along good with that as well.
Review: Initially you were looking at a $3 million dollar investment with these projects and then it went up to $5 million. Is it going to be higher yet?
Bodnar: These projects never come in at what you originally think they will. First its $3 million, then $4 million, then $5 million. But I think when all is said and done we’ll have about $6 million into both buildings.
Review: What are some of the qualities that you feel distinguish these apartments and dwelling units and how is the leasing going with the Eddy Building, which opened a couple months ago?
Bodnar: The leasing is going really well. The Eddy Building opened with 30 units and the first tenants moved in around the 15th of December. Considering the way the weather has been, we were overwhelmed at the response and number of people calling to inquire. Currently we have 12 occupied units out of the 30 available in the Eddy, which I consider unbelievable at this time of year. We have two physicians living there that work at the local hospital, and a person from WNEM TV-5 that just moved in, as well as a manager at ATT&T. I’m 100% confident that these projects will be a total success. Honestly, in the back of my mind back at the beginning of this project, I was asking whether it was going to work because of all the negative things you hear about Saginaw, but based on this initial response, I am honestly overwhelmed.
Review: Initially I know that you hoped to have things rolling and opened last summer. How is the schedule going? When do you anticipate the Martini Bar opening at the Bancroft and will you also feature a restaurant there?
Bodnar: Things are moving along nicely and I’m always overly optimistic, which is why I initially thought we’d have both buildings open by the Fall of 2013. But we realized quickly there was no way that was going to happen. We’re still waiting on city and state approval on certain items, but our initial projection on opening was based without considering the many hurdles we would have to surmount. We’re back on track with everything and I’m hoping that the Bancroft will be open sometime in the early summer and ready to occupy.
As for the Martini Bar, we’re looking at a mid-April opening on that, or perhaps the beginning of May. Electricians are working on it, as are plumbers, and we are building the bar area right now. The liquor license has been approved and we’re getting all the pieces put together in the Bancroft and hoping to get it launched soon.
We’ll also have the Common Grounds Coffee & Crepes shop and then the Bancroft Wine & Martini Bar, which will be two separate businesses with separate entrances. The Martini bar will feature an extensive line of appetizers, but not full dinners; and focus on smaller plate items. The coffee house will probably open first. And then at the Eddy building we will have two retail spaces available. The Bancroft will have 3 other available retail spaces, in addition to the Coffee Shop and Martini Bar.
Review: Downtown Saginaw is definitely a destination area, especially given the strength of the Dow Event Center, the Temple, the Castle Museum, and the new First Merit Event Park. But how long do you feel it will take to recoup your investment on these properties?
Bodnar: It’s hard to say. That’s a good question. It’s going to be years and is a long-term investment. You never really recoup your investment on these properties until you sell them someday; but I’d say it would take probably 10 years to recoup what we’ve put into them.
Review: What do you feel is the biggest misconception that people harbor about this project?
Bodnar: A lot of people that don’t work in the downtown Saginaw area have this misconception that it’s a dangerous area, which is simply not the case. Downtown Saginaw is extremely safe. If you get maybe two miles out of the downtown area there could be some issues, but that’s true with any major town.
I believe once you get more people down there the safer it will become. The best way to have a safe city is to have people on the streets. A lot of people don’t realize the quality that we are putting into these units. There are a lot of apartments available in Saginaw County, but I’ve not seen anything that comes close to the quality of what we are doing at the Bancroft & Eddy. Plus our units are very affordable.
We have several different sized apartments and all of them feature granite countertops and hardwood flooring. For the 1-bedroom units we have those starting at $700.00 per month, but we also have a special offer whereby anybody that works in the downtown area will get a discount if they are employed by one of the many different businesses in the downtown area. So if you’re working at a hospital or are a medical student, you can get the 1-bedroom at around $600 per month, which includes heat. The two bedrooms are around $800.00 per month; but again, if you’re a preferred employer or work for a preferred employer, the rent comes in lower. Actually if somebody works anywhere in Saginaw County, we are making them a preferred employer and offering them a discount to get them living down there, so the 2-bedrooms would come in closer to $700 or $750 per month.
Review: Are there any other thoughts that you have about any topic we might not have touched upon?
Bodnar: I think that the city has been outstanding throughout all of this and it’s been good working with them. The Building Department and former Mayor Branch, as well as the new City Manager have all been very helpful.
The only thing that I believe is a risk for the city of Saginaw is that a lot of buildings in downtown Saginaw have been neglected over the years because the city has not been in a position to really enforce a lot of the existing building codes. People didn’t have money to do anything to improve their properties, but I believe now is the time for the city to start identifying those buildings by taking a half mile circle; or possibly go from the Dow up Washington Avenue to the river and address this issue.
This needs to be done across the board, because you can’t pick favorites. But these building codes need to be enforced upon everyone, because by doing that you force property owners to step up to the plate; and those not willing to take a swing need to be replaced by putting somebody else into the game. I believe this is their window of opportunity and if it doesn’t happen now, all this great stuff that is going on in downtown Saginaw is not going to happen.
I do find it encouraging that David Strouse has stepped up to the plate and is working on a renovation project. All of this is incredibly encouraging. Great things are happening in Downtown Saginaw and I am proud and excited to be part of it.
For leasing information on the Bancroft & Eddy Buildings please phone 989-776-9000. You can also go to www.bancroftrentals.com for more information.
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THE NEW GILDED AGE (Part 2)