Detroit Regional Chamber > Chamber > Detroit Council Approves $3 Billion Henry Ford Health Hospital Expansion in New Center, Community Benefits

Detroit Council Approves $3 Billion Henry Ford Health Hospital Expansion in New Center, Community Benefits

February 28, 2024

Photo credit: The Detroit News

The Detroit City Council has approved a community benefits agreement and rezoning for parts of New Center to accommodate the Future of Health, a $3 billion development and collaboration among Henry Ford Health, the Detroit Pistons, and Michigan State University.

The Detroit Regional Chamber is pleased with the Detroit City Council’s support of the project. The Chamber’s Vice President of Racial Justice and Economic Equity, Marnita Harris, testified before the City Council in favor of the project and its tax incentives.

RELATED: Detroit Regional Chamber Statement on Future of Health Development

Learn more about City Council’s approval and the project in The Detroit News article below.

The Detroit News
Sarah Rahal
Feb. 27, 2024

After weeks of contentious debate, the Detroit City Council approved Tuesday community benefits and rezoning parts of New Center to accommodate the Henry Ford Health $3 billion hospital expansion.

The nine-member council voted 6-3 after a four-hour debate. Council members Mary Waters, Angela Whitfield-Calloway, and Gabriela Santiago-Romero voted against the community benefits and the rezoning of the projects, saying the benefits proposed weren’t sufficient.

The expansion, announced in February last year and expanded in September, includes five components: a new research center with Michigan State University, a 400-private room patient tower, a commercial corridor with two new residential buildings and a 1,500-space parking garage.

The developers are Henry Ford Health, Michigan State University, Detroit Pistons owner Tom Gores is producing the commercial corridor and the Gilbert Family Foundation have separately partnered to bring a stroke and neurofibromatosis research center.

Developers will receive an estimated $231.7 million in tax revenue reimbursement over the next 35 years, with $117 million of that from property tax, according to the plan.

The developer investment will be $773 million for the joint Henry Ford/Michigan State University Research Center, three residential/commercial projects and a six-story parking garage. Henry Ford has not sought any tax breaks for its portion of the $2.2 billion expansion.

The brownfield plan builds on the health system’s development of the Henry Ford Pistons Performance Center on Second Avenue, completed in 2019. The existing 877-bed hospital on West Grand Boulevard will remain.

Three dozen development team members attended City Council meetings hoping to see the projects approval.

The developers issued a joint statement directly after the project’s approval saying they are long-standing Michigan community stewards that are working toward a “historic partnership.”

“Today’s approvals lay the groundwork to execute the reimagination of our shared campus, creating meaningful economic opportunity and redefining what health and well-being means for the City of Detroit,” according to the statement.

“We appreciate our engagement with members of City Council, Mayor Mike Duggan and his team, and the committed impact area residents of the Neighborhood Advisory Committee for understanding the importance of this vision and working together to deliver a community benefits package that will enhance our shared neighborhood and the broader city we serve.  The Future of Health in Detroit is ours to shape, and we’ll do it together.”

Arn Tellem, vice chairman of the Detroit Pistons, said in 2017 the Pistons were the second developer to go through the CBO process. He advocated for the project’s passage Tuesday saying they are returning customers in this development “to be in a position to further transform our neighborhood in a positive way.”

“And it will leave Detroit in a better place providing the finest medical care and access for Detroiters,” Tellem told the council. “It will expand the zone of development and investment from the urban core to the neighborhoods that will have a ripple effect.”

Developers spent the last six months working with a special board that requires resident input in areas impacted by major private developments under Detroit’s unique Community Benefits Ordinance.

The special nine-member Neighborhood Advisory Council, known as NAC, was made entirely of residents who live in an “impact zone” surrounding the planned expansion. They submitted 155 recommendations as part of the Community Benefits Agreement, whereas developers initially proposed 80 benefits.

The Community Benefit Agreement

The developers said they have made commitments to affordable housing, home repair, and rental assistance as a part of the Community Benefits Agreement that was approved by the Neighborhood Advisory Council by a 6-2 vote.

Developers, according to the Transformational Brownfield Plan, estimate their benefits agreement totals $604 million. This total includes the $90 million cost of the research center; $10 million for the construction of a 1,500-space parking garage; $55 million on infrastructure improvements like roads, crosswalks, and streetscape improvements; and $30 million on rehabbing five acres of greenspace around the hospital.

The majority of the benefits package cost is $310 million for uncompensated care for under-insured residents within a 3-mile radius they’re calling a Community Health Fund.

As part of new development being built by Pistons’ Gores, the benefit package sets aside 133 of the 662 residential units (20%) for “affordable housing” at varying levels of income.

“We’re delivering housing here to prevent displacement,” said Richard Haddad, on behalf of the Pistons. “We’ve heard the commenters talk about how this is just a project for us to get rich… the projected rate of return on this project is 4.5% that’s not what this is about for the Pistons. This is about us coming together, with our partners in the neighborhood, to invest in this city.”

Developers slotted $2 million to a home repair fund, to be administered by an experienced nonprofit in the neighborhoods surrounding the developments including New Center, New Center Commons, Virginia Park, Virginia Park Community, Tech Town, Elijah McCoy, Piety Hill, LaSalle Gardens and NW Goldberg. Developers promise $500,000 to a rental assistance fund for qualifying renters in the impact area.

The developers will conduct a feasibility study identifying the potential redevelopment plans for the Fairbanks School and “hold a public community meeting to directly inform the redevelopment plans.” They promise $1.3 million to curate a site plan for Fairbanks within a year of the group’s approval that focuses on housing, healthcare, careers, education or community building.

Developers have also promised $100 million on “business spend” to procure small businesses. There’s also $300,000 in microgrants spread over 15 years to support organizations within the Impact Area. A panel of community members will nominate organizations for consideration and the funds shall be granted by developers.

The hospital will provide a “dedicated community health worker to provide engagement with impact area senior citizens to educate, coordinate community resources and assist seniors in navigating the healthcare system.”

They’ve also slotted $3.75 million for 50 tuition-free scholarships to Michigan State University to qualifying seniors at University Prep and Northwestern High School – one from each school over a period of 10 years.

Medical resources have also been promised to Northwestern High School. Developers will also dedicate research and direct care resources to address infant/mother mortality issues, which will report to the city’s Civil Rights and Inclusion Office twice a year.

JoAnne Adams, who served as a leader on the NAC, said she feels this CBA lacks three critical components: protection from displacement, a community investment fund and a rehab plan for the abandoned Fairbanks School. And “we need stronger language,” she said.

“It doesn’t give me confidence this CBA will materialize,” she told the council. “Please do more to make this more equitable.”