A $54-million project to build upscale condominiums at the edge of downtown Detroit has been canceled, unable to get financing, and the Plan B is to put a hotel there.
Announced in late 2016, The Ashton Detroit was to be an 11-story building of 83 luxury condos at 600 W. Lafayette, featuring floor-to-ceiling windows and an indoor swimming pool. It was to open this year.
But after failing to meet lenders' requirements to pre-sell at least 50% of the condos to get construction financing, The Ashton's development team decided to change gears and build a 154-room hotel on the site instead, said Eric Means of The Means Group, one of the project's local developers.
"Condo financing is very difficult," he said Friday. "We decided to make a shift and respond to the market."
The Ashton sold reservations for about 30% of the planned condos, including one $899,000 unit, Means said. The roster of would-be buyers included business executives and other high net-worth individuals.
"So people were responding to that type of product," Means said.
Still, most lenders insisted on seeing 50% pre-sales before financing construction. The project had alternative financing options, he said, but at unrealistically high interest rates.
"It really wasn't worth doing," Means said.
Those who placed condo reservations were refunded their $1,000 deposits, he said.
"I'm sure there was a lot of disappointment," Means said.
He characterized the condo project's main problem as financing and not its location at the less dense western edge of downtown. The site is not on the Detroit River, although upper-level condos would have had sight lines to the riverfront.
"I think wholeheartedly that if the financing had been in place, we would have sold the units," he said.
The newly announced $47-million hotel, to be called "The Ashton at the Cambria," is to have 154 rooms and fill a future 150,000-square-foot building that would be built on the surface parking lot next to the site's existing Walker-Roehrig Building. The Walker-Roehrig Building would be redeveloped with mostly retail and office space and connect to the new hotel.
The Cambria hotel project is being developed with Choice Hotels International, which owns the Cambria Hotels brand aimed at business travelers. Other partners include Troy-based Koucar Management.
Groundbreaking is slated for June with the goal of opening the hotel for the next North American International Auto Show, set to happen in June 2020. Nightly rates would be about $180, Means said.
Detroit has been experiencing a mini boom in hotels, including the newly opened Shinola Hotel and .
Existing office tenants in the Walker-Roehrig building would be allowed to stay, Means said.
