Michigan Business & Economy

Detroit is going through a hotel boom

Michigan Public | By Stateside Staff

Published April 14, 2015 at 3:40 PM EDT

The Eddystone, which will be developed if the plan is approved, and the Park Avenue, which would be torn down.

Listen to our conversation with John Gallagher.

There's a hotel boom happening in downtown Detroit. Once-abandoned buildings are now gleaming new hotels, or will be soon. But will these plans give Detroit too many hotel rooms or not enough? And there have been lengthy discussions over the two hotels near the new Red Wings arena site just north of downtown.

The Ilitch family, owners of the Red Wings, Tigers and Olympia Entertainment, have created a plan for creating a new arena, but the Detroit City Council still must approve it. The current plan calls for the Ilitches to refurbish the Eddystone hotel and tear down the Park Avenue next to it, but the agreement is still lacking some details.

"The Council's sticking point seems to be, as of this week, that they want an absolute, iron-clad agreement that the Eddystone will in fact be redeveloped," Detroit Free Press writer John Gallagher says.

Gallagher also believes part of the delay may come from the Council's desire to show they have some power in the development as well.

"Some of it is the Council wanting to flex its muscles and have a say in this process and not just be given a plan," Gallagher says.

The development calls for a lot of public money up front, according to Gallagher, and in turn the Ilitches would spend $200 million to develop the rest of the district with housing, restaurants and entertainment venues.

Gallagher says that this delay isn't likely to tank the project and he expects it to be resolved in a few weeks.

And this new deal is just one of various new hotel projects in the city.

Gallagher's recent story in the Free Press details the Detroit hotel scene, showcasing many of the boutique hotels with 100 to 150 rooms coming to the area.

These hotels still need guests, though, and Gallagher says Detroit needs to continue to focus on creating a more vibrant market for people to visit, or conventions or trade shows.

In order to fill rooms, you have to have more than the auto show, Gallagher says, and with recent attention on the issue, "Detroit is lining up to really pick up its convention business to be one of the major ones in the Midwest."