Ferndale Looking At Slimmed-Down Office Space For ‘The dot’ Parking Garage

By: Mike Koury | Woodward Talk | Published April 18, 2018

FERNDALE — The city of Ferndale has had the Development on Troy, a mixed-use parking development at 221 W. Troy St., in the works for close to two years, and the city administration delivered an update on progress on “The dot” to the City Council April 9.

During the regular council meeting, Assistant City Manager Joe Gacioch reported to the council on the city’s efforts involving requests for qualifications from private developers to develop the residential, office and retail space of the building.

As it stands now, The dot would have 397 parking spaces, street-level retail space amounting to 12,000 to 16,000 square feet, approximately 40,000 square feet of office space, and a stand-alone residential development with 24-28 units. According to Gacioch’s presentation, the city expects to issue up to $20 million in bonds for the project.

Gacioch said the city gave the developers a couple of months to submit designs for the RFQs, with a deadline in December. He said the deadline for the proposals was in January. The proposals were reviewed through March, and the developers also provided alternative concepts for the planned unit development.

“What we heard is that there was a resistance to build the office (space) without a certain percentage of pre-lease requirements,” he said.

“There was less interest in building the office. What we heard is, they don’t believe there is financing available to pursue the office, because you would have to go and get a certain percent — a high percentage of pre-leased.”

Because of the developers’ lack of interest in the office space, Gacioch said their suggestion would be to add more units, increase the square footage of residential on the site and increase the height to support the units.

“What we heard is, access to financing to support development from the developer community was more accessible in support of residential,” he said.

Gacioch also said there was consistent interest in controlling the retail space on West Troy, but it was understood that city officials desire to carry quality retail, and they prefer local retail.

The assistant city manager said the city’s goals for office space remain to diversify the downtown economy, add new jobs to the downtown and add to the daytime parking demand. Taking into consideration all the city has heard from developers, Gacioch said the city wants to remain flexible.

To that end, Gacioch presented a new version of the PUD called “PUD Slim,” which would scale back the office space from 40,000 square feet to 20,000 and would increase the number of retail units.

Mayor Dave Coulter said at the meeting that he didn’t think the city could get anybody who wanted to build the office space, or at least 40,000 square feet of it.

“I suspect part of it is because Ferndale is not a proven office market,” he said. “They’re used to building in Troy, they’re used to building in Farmington Hills and Southfield. They’re not used to building office space in Ferndale, so even though the experts say there’s a demand for it and you can sell it, it just hasn’t been their experience.”

Coulter later told the Woodward Talk that the PUD Slim is what the council is considering, but it has to go back to the Planning Commission.

“Because there’s still some work to do on it, I think the Planning Commission has to weigh in again, but yes, that’s the direction that we’re going in,” he said.

With this new PUD, Coulter said it would add a little more residential — he wasn’t sure how much — and it would take the space of some office.

“Less office with the ability to add the office as the market allows,” he said. “There wasn’t enough interest in the full 40,000 square feet, so we’re being told that the 20,000 would be more attractive.”