Ilitches bet big on land near MotorCity Casino Hotel

The Ilitch organization is on another land-buying spree, this time in an area just beyond the 45 blocks of Detroit it already plans to develop into an entertainment, retail and residential district.

The focus is the desolate area around the MotorCity Casino Hotel on West Grand River, just a few blocks west of downtown. The Ilitches have spent more than $10 million in at least 15 different sales since 2011, according to Detroit News research. The total footprint of the properties rivals the 650,000-square-foot new home of the Detroit Red Wings, which is being built six blocks away from MotorCity.

MotorCity Casino Hotel is owned by Marian Ilitch. She and her husband Mike co-founded Little Caesars Pizza, the international franchise based downtown. Mike Ilitch owns the Red Wings and Detroit Tigers.

The Ilitches have never publicly disclosed the Grand River area purchases, nor their plans for the land. The organization’s real estate unit, Olympia Development of Michigan, had no comment when contacted.

“The Ilitches once again appear to be playing the long game with these investments. And land development is often about the long game,” said John Mogk, a Wayne State University law professor who closely follows urban planning issues.

Public records show the Ilitches paid handsome prices for empty warehouses, small businesses and vacant lots around MotorCity. The acquisitions are just past the area that’s being targeted for $200 million of development surrounding the new arena.

The ownership of the parcels was determined using Detroit property tax records and records from the Wayne County Register of Deeds and Michigan Department of Licensing and Regulatory Affairs. The News also relied on data and mapping services from CoStar Realty Information Inc., a private commercial real estate information service, and Loveland Technologies, a private firm that tracks property ownership.

The area of land-buying activity is clustered around West Grand River and is bordered by the Interstate 75 to the south, Martin Luther King Drive to the north, the Lodge Freeway to the west and Fourth Street to the east.

The Ilitches have bought at least 57 parcels in that area, records show. To be clear, 57 parcels doesn’t mean 57 separate sales. A parcel is the measure used in legal records to keep track of property. A parcel has defined borders. Dozens of parcels can be part of one property sale, particularly when the building or area that is purchased is fairly large. That’s the case in many of these sales.

Among the Ilitch purchases around MotorCity:

■In January, $2.8 million was paid for property that includes the home to Advance Plumbing & Heating Supply. The West Grand River business is across the street from the MotorCity near the Lodge Freeway. The plumbing and heating business opened 95 years ago and is still run by the Moss family.

The business has struggled for years, said Jeff Moss, the third-generation owner. “My father used to carry a gun (in the store). But he never wanted to give up on Detroit and neither did I,” Moss said. With money from the sale of the West Grand River property, the family bought a building in Midtown at Cass and Parsons that will allow Advance Plumbing & Heating to have a showroom and stay in the city.

■ In 2011, $766,000 was paid for the property where the once legendary Carl’s Chop House stood at 3020 West Grand River. The restaurant closed before the Ilitches bought the property, which includes the parking lot. The building has been demolished.

■In December 2013, a three-story empty warehouse at 1040-1050 Spruce was bought for $650,000.

■In November 2014, the former Mitch’s Bar, a 5,000-square-foot West Grand River building a few blocks from MotorCity, went for $1.6 million.

Information culled from public documents and private databases show many of the purchases happened after the 2013 announcement that the new Red Wings arena will be built six blocks east of MotorCity. That announcement increased real estate activity not only by the Ilitches, but also by other buyers.

An empty lot on West Grand River and Fifth, for example, is under contract to be sold after being purchased by a local investor about a year ago, said Gary Smith, a commercial real estate broker for Marcus & Millichap, who is involved in the sale. The 1/3- acre lot was listed for $650,000.

“The Ilitch activity certainly has sparked lots of interest,” Smith said. “There’s a lot of potential for retail, housing and they have already demolished one building they purchased,” he said.

It’s likely the Ilitches are waiting to see how the 45-block development surrounding the new arena plays out before details emerge about plans for the West Grand River property, according to several people who follow Detroit development. The overall plan for those 45 blocks is called District Detroit. The Grand River area purchases are in some cases a half block away from that targeted District Detroit, which is expected to attract hundreds of new residents as well as plenty of retailers and other businesses.

“Investors, developers, they buy land where there is not current demand, but speculate that in four, five, seven years, there will be much demand. You anticipate what may be the future use of the land,” Mogk said.

The number of sales and the total amount paid by the Ilitches is not clear because many properties in the West Grand River area have been bought through limited liability corporations. Various records show at least two of those entities are linked to Ilitch Holdings. But there are other purchases in the area that may be connected to the company that are not yet known publicly.

Since the late 1980s, the Ilitches have invested more than $1 billion downtown. To accumulate the blocks of land needed to build the sports/entertainment venue, the Ilitch organization spent years secretly buying 56 properties from dozens of private owners in the Cass Corridor neighborhood. Records show the Ilitch organization spent nearly $50 million to buy all of the land.

“The Ilitches are patient money,” said Jeffrey Bell, a senior vice president at CB Richard Ellis, a commercial real estate service. “They may be paying good prices, but once it becomes clear that major development could take place, those prices for the property will go higher.”

Mogk and Bell said the West Grand River area properties may be used as an interim parking area for the other new developments in District Detroit.

“It may take a while, a few years at least, before it’s clear what that best use of that land may be,” Mogk said.

laguilar@detroitnews.com

Twitter: LouisAguilar_DN

Detroit News Staff Writer Christine MacDonald contributed.