THIS IS THE beachhead. Look south and you can see Comerica Park, the new downtown ballpark built for the Detroit Tigers, and Ford Field, home of the Detroit Lions, rise over the far side of the Fisher Freeway. On the corner of Woodward Avenue, the 143-year-old St. John's Episcopal Church, its gothic spires blackened with age and auto exhaust, holds its own against the coliseums and casinos that symbolize downtown Detroit's latest renaissance.
Now turn east and see the vast expanse of empty lots pock-marked by the wrecks of homes built in the Gilded Age of the late 19th century and abandoned as Detroit's fortunes hit bottom in the last decades of the 20th.
But look north to the rows of tidy three-story townhomes designed for a new generation of urban home buyers. With 10-foot ceilings on the open main level and two-car garages, the 2,000-square-foot homes are selling for more than $300,000. And here, at the corner of Woodward and the Fisher Freeway, are models of a different sort. Smaller, with bay windows and skylights, and selling for less than $200,000, these town-homes appeal to a buyer Detroit hasn't known for a while—sophisticated, night-life loving, and urban-crawling singles and couples.
This is Woodward Place, the beachhead from which Crosswinds Communities plans to resurrect Brush Park, the 11 devastated city blocks closest to Detroit's newest downtown entertainment delights. Crosswinds envisions 700 to 800 units in Brush Park.
“The Thanksgiving Day parade comes right down Woodward,” says Spencer Roed, Cross-winds' senior vice president, over the din of street and freeway traffic. “You can sit on your porch and listen to a Tigers game or a Springsteen concert.”
For Bernie Glieberman, Crosswinds' founder and president, rebuilding Detroit has become an enduring mission. With three corporate giants—General Motors, Compuware, and EDS—having relocated downtown, bringing with them 15,000 jobs, Glieberman looks to draw on Detroiters and suburbanites to fill Brush Park and his other in-town developments. More than that, his successful formula for developing downtown properties has reinforced his conviction that housing, priced and positioned correctly, can play a pivotal role in revitalizing the city he obviously loves.
Development Driven Persuading someone to leave the suburbs—where Detroiters have been moving, migrating, and fleeing for 50 years—for the city isn't an easy sell. But Crosswinds, which is based in exurban Novi, Mich., thinks it has hit on a winning strategy: Tie new housing to the best the city can offer—culture, arts, nightlife, shopping—and make it affordable. And the company is not the only one watching eagerly to see if the strategy succeeds.
“Bernie's been arguing about how narrow the market is in Detroit,” says Alex Krieger, chairman of Harvard University's department of urban planning and design, which offers a graduate seminar on Detroit, underwritten by Glieberman. “There's a national trend toward singles, newlyweds, and empty-nesters. There are people like that in Detroit as well.”
“It's about linking and knitting together,” says community activist Sue Mosey, president of the nonprofit Detroit booster group, University Cultural Center Association.
The return to Detroit is part of the evolution of Bernie Glieberman as a developer and Crosswinds as the vehicle for his substantial energy. In the past five years, the company has quickened its pace in urban and suburban infill. At the same time, Crosswinds has moved into other states. And Glieberman, sole owner, has started to turn parts of the operation over to younger subordinates and concentrate on the part of the business he enjoys best—doing the deal.
“It's extremely satisfying,” Glieberman says. “I'm not a detail person. I'm the person who comes up with the plans. I feel I can be very productive in developing land for my company and for other builders. On the other hand, there are people in my company who are experts in technology and processes—areas where I'm at my weakest.”
Although Crosswinds has developed a reputation for its urban and suburban infill, the bulk of the business remains standard suburban fare—developing and building townhomes, condos, single-family and mixed use developments, and master planned communities around Michigan and a half-dozen other states, including California, Arizona, and Florida.
Crosswinds also develops and builds commercial real estate and owns the Affordable Mortgage Co. The company reports that revenues have increased steadily from $159 million in 2000 to a projected $277 million in 2004, according to Roed, even as unit production has slowed. Deliveries totaled 1,045 in 2003, compared to 1,435 the year before.
The company's largest project by far is Brambleton, a 2,000-acre master planned community in Loudoun County, Va., three miles from Washington, D.C.'s Dulles Airport. Plans call for 6,200 homes, a 450,000-square-foot town center, and 2 million square feet of office and light industrial construction.
It's a world away from fast-growing Loudoun County—the scene of recent skirmishes in the slow-growth and no-growth wars—to Brush Park in Detroit, which has experienced only shrinkage and decay for two generations.
But Crosswinds was able to bring something to Brush Park that no one else could.
“When we entered [negotiations] for Brush Park, we were the only ones not requesting a subsidy,” Glieberman says.
“Bernie was the only one able to take this on,” agrees Walter Watkins Jr., Detroit's chief development officer. “The fact that he needed no financing was important to us. To have a well-capitalized developer building in the city makes it more likely to have a project completed.”
And Crosswinds' precedent has had an effect on those who have followed, Watkins says. “We're starting to turn the corner where not every situation has to be subsidized by the city.”
Kid In A Candy Store Every Saturday morning, Glieberman and his vice president of land acquisition, Dick Schram, meet for breakfast with a couple other business pals. Then they climb into Schram's 2003 Lexus and, following an itinerary that Schram has compiled, spend the rest of the day looking at land in the seven counties surrounding Detroit. They've been taking this weekly joyride for 20 years.
“We average 250 miles a Saturday,” Schram says. “Our record is 334.” When it comes to land, he says, “Bernie is like a kid in a candy store.”
Despite Detroit's decline, the growth of its exurbia shows no sign of slowing.
The city was a very different place when Bernie Glieberman was born 64 years ago. He was raised in a middle-class house on the city's northwest side. His father, a builder and developer, died when Bernie was 17. Still in high school, he wanted to join the family business.
“My father's business partners said I could work as long as I went to college. So I took [business and accounting] classes at the Detroit Institute of Technology in the morning and went to the office in the afternoon.”
At 21, he had become full partner in another Detroit real estate investment firm. Ten years later, he bought out his partners and established what became Crosswinds Communities. The company name comes from a series of developments Glieberman built in the early 1970s. There were so many Crosswinds communities around metro Detroit that it made sense to call the whole operation Crosswinds Communities, he says.
The company has grown from 20 employees to 200. And at the center is Glieberman, the largest independent home builder and developer in Michigan, who is often showered, dressed, and in the office by 3 a.m.
“I like to be in the office by 5:30,” he says. “But sometimes I wake up and can't get back to sleep.”
“He's loaded with energy,” says Schram, who has known Glieberman for 40 years and joined Crosswinds 14 years ago.
Roed, at 36 one of the younger executives, joined Crosswinds in 1996 and watched the company's transformation. “It was an entrepreneurial company that was turning into a more corporate company,” he says. “Everybody was reporting to Bernie.”
The product mix has changed along with the company's leadership structure. “Five years ago we had one or two projects out of state. Today we have many,” Glieberman says. “Five years ago we were doing mostly affordable and first-time homes. Now we develop master planned communities for first-time and move-up buyers.”
The company's expansion means more travel and often, moving quickly. The day a reporter was scheduled to interview Glieberman in his Novi office, he found Glieberman had flown to St. Louis to perform due diligence on a deal. Glieberman managed to make the “face-to-face” interview—via a speakerphone in Dick Schram's office.
When he's not scouting new markets, Gleiberman is looking ahead to more projects in Detroit. “We're going to be concentrating on reuse and mixed-use, taking old shopping centers and brownfields and doing more land development for smaller builders.”
Wooden Water Lines There's no doubt that building on green-fields is easier and more profitable, Glieberman says. Sales on the Detroit properties are “steady,” Roed says, “not overwhelming.”
But Glieberman is committed, and he says he wants his top people to be, too. Roed says, “He told us, ‘I grew up in Detroit and I want to build Detroit and we can do it. You can't not want to build in Detroit because it hurts your bonuses.'”
Buyers are aided by a 56 percent state property tax credit from the state of Michigan—Brush Park is in a so-called Neighborhood Enterprise Zone, or NEZ. “That's a huge amount in Detroit,” Roed says.
And while Detroit's newspapers are reporting that Detroit had the third-highest home construction rate in the seven-county metro area in 2003, with 872 new permits issued, the city tore down almost twice that number in the same year.
Glieberman says there's less competition than in the suburbs, but the work requires more staffing.
“Forty-thousand properties were turned over to the city by the state,” Roed says. “Most have tax and title issues.”
In addition to title work, there's the problem of ancient infrastructure. The Victorian water lines under Brush Park were made of wood. “The city put in a whole new underground system,” Glieberman says. And the ground was contaminated. “We spent $400,000 to haul out bad soil.”
Site security is mandatory on an in-town project, and getting supplies and trades downtown from the suburbs adds cost. And, Glieberman says, “You'd better get the neighborhoods to buy in—there are certain expectations they're going to have. You can't just say ‘You're lucky I'm here.' They don't know how hard it is and they think you're going to make a lot of money. They want you to listen to them.”
Glieberman found his allies. One is Kate Beebe, president of the Greater Downtown Partnership, a nonprofit planning group. “What Bernie's done is provide lessons for those who have come after,” she says. “Bernie's a visionary guided by some real commitment to Detroit. He has an energy level that makes him keep pushing to get it done.”
“He's doing what he thinks will sell,” says Harvard's Alex Krieger. “But he's also willing to consider things that might not sell quite yet.”
A few miles north of Brush Park on Woodward Avenue, Crosswinds is building Lofts at New Center, two-story residences whose exteriors exude a 1940s feel. The homes have two-car garages, and the interiors have the brick walls and exposed ceilings of lofts. The company scaled plans back from three stories to maintain the $150,000 price point, Roed says.
And along the Detroit River, on the city's far east side, 90 acres have been prepared with paved streets, street lights, and an underground system that the city installed for $25 million for the 300 single-family homes that Cross-winds has started to build in its Jefferson Village. The development abuts a new strip shopping center on Jefferson Avenue, home to the largest Farmer Jack supermarket in the state. Crossroads is looking at the supermarket as the beachhead from which home buyers will jump into Jefferson Village.
It's nothing compared to the delights of downtown, but the river has its own attractions, and brand new single-family homes selling between $170,000 and $250,000 is almost unknown in the city.
It's a city that has explored the meaning of hitting bottom, but a place that has never lost Bernie Glieberman's affection.
“I'm doing this because I grew up in Detroit, and I think that at a certain time making money isn't the most important thing,” Glieberman says. “I want the accomplishment of getting the city rolling again.”
Better than New Crosswinds' contract for developing Brush Park included rehabilitating 11 original structures. It would be nearly impossible to imagine the original condition of what are now the elegant Brownstones on the street know simply as John R. if a number of red-bricked hulks of 1880s-era residences—windows boarded, roofs collapsed—didn't still dot the area.
The company invested $2.5 million to restore the Romanesque-style row houses, with their brick arches, broad center gable, elaborate molding, and turret bays. The six luxury homes, which by a master stroke of the original architect are connected only in the front, are selling between $400,000 and $450,000.
Inside, the three-level, 2,700-square-foot layout is new and includes three bedrooms, two and a half baths, and a 400-foot bonus room. The back of the building houses a covered two-car garage. On the third floor is a deck that looks down on a private courtyard. The word is that some of the drug dealers who used to scramble inside through the building's basement windows have returned to marvel at the transformation.
For city boosters, such renovations make the area more than just an urban renewal project. “It lends an authenticity to the neighborhood,” says Sue Mosey, president of the University Cultural Center Association.
And it turns out that projects such as the Brownstones on John R. are good business.
“One of the things we've learned from restoration,” Glieberman says, “is you get more money from a restored residence than a new one.”
Learn more about markets featured in this article: Detroit, MI.