May 10, 2007 --For years, the suburbs stole business from downtown Detroit. Now, the $82-million Fort Shelby Hotel renovation announced Wednesday might steal a little right back.

The announcement that developers have closed on the financial package for the planned Hilton Doubletree led to intense speculation about where the hotel will find customers.

"A lot of that demand is going to have to be captured from the suburban markets," said Chuck Skelton, an Ann Arbor-based hotel consultant.

That may be a challenge, at least in Michigan's current economic doldrums. For both 2005 and 2006, occupancy rates at metro Detroit hotels ran a sluggish 59%, barely enough to break even, Skelton said.

But Detroit economic development officials have long believed that new business hotels downtown, like the Fort Shelby and the nearby Book-Cadillac Hotel renovation, would help to capture more convention business for Cobo Center, thus generating new demand.

"This could help convention business immensely," said George Jackson, the city's chief development officer and president of the Detroit Economic Growth Corp.

The last hotel in the Fort Shelby building ceased operating in the early 1980s, and the building has been vacant for the past decade.

But in an astonishing turnaround from years of abandonment, downtown soon will have five new hotels in the works at the same time -- three 400-room casino hotels, the 455-room Book-Cadillac and the 204-room Fort Shelby. That will roughly double downtown's inventory of hotel rooms.

Jackson said the Fort Shelby project also would boost the outlook for the often-bleak west side of downtown. Most of the new development of recent years, including Comerica Park and Ford Field, has taken place on or east of Woodward Avenue. With the Book-Cadillac and Fort Shelby projects, "that's a shot in the arm for west of Woodward," he said.

Detroit-based developer Emmett Moten, who leads the Fort Shelby project, said Wednesday the project is to consist of 204 suites, 38,000 square feet of conference meeting space, 63 upscale rental apartments and a destination bar and restaurant.

Construction is scheduled to begin in the next 30 days and, if completed on schedule, the hotel should be open by early 2009.

"It's been a long process but truly worth the effort," said Moten, who has been working on pulling together the financing for six years.

Mayor Kwame Kilpatrick said in a prepared statement: "The $82-million restoration of the Fort Shelby Hotel is another example of the exciting economic development projects taking place in our great city." The project team includes MCP Investments, of which Moten is a partner; Chevron USA; the General Retirement System of the City of Detroit; the U.S. Department of Housing and Urban Development; ShoreBank, and Hilton Hotels.

The Fort Shelby is the latest in a string of projects downtown. The $180-million Book-Cadillac Hotel restoration is under way and should be completed by late 2008. Two of the three permanent casino-hotel complexes -- MGM Grand and MotorCity -- are to be finished later this year, with the Greektown Casino expansion about a year later.

Meanwhile, developers are taking orders for planned condominium complexes on the Detroit riverfront, and construction is nearing completion on the first phase of the planned RiverWalk promenade.

"Continuous improvement is probably going to be our mantra for some time," Jackson said.

The Fort Shelby began life as a 10-story hotel in 1916. Then, in 1927, architect Albert Kahn designed the 21-story tower and fully integrated the two structures into one.

As Detroit's fortunes declined following World War II, the Fort Shelby gradually lost business. It operated as the Pick-Fort Shelby from the 1950s through the early '70s, and later as the Shelby Hotel, but closed in the early '80s.

Moten has a colorful history in Detroit development circles. A native of Alabama raised in New Orleans, he came to Detroit to work in Mayor Coleman Young's administration. As Young's chief of development, he played a role in numerous projects, including creation of both the General Motors Poletown factory and the Detroit People Mover.

He shared top billing in several controversies, including when the City of Detroit racked up tens of millions of dollars in overruns to acquire land for the east-side Chrysler plant.

"Those were stressful times, but they were good times," Moten said. "The bottom line was, people just came together and rallied and we all did it together."

Contact JOHN GALLAGHER at 313-222-5173 or [email protected].

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Copyright (c) 2007, Detroit Free Press

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