Commercial Deals: Salvation Army Complex

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The vacant former Salvation Army Denby Center for Children & Family Services in northwest Detroit has again changed ownership.

 

The Salvation Army Eastern Michigan Division left the multi-building property in 2016, consolidating services for homeless women and children there to other facilities.

 

An entity of Southfield-based IDG Holdings LLC bought the sprawling campus on nearly four acres in 2017 for $515,000 and has now sold it to ARI Management LLC, registered in Southfield, for $1.8 million under a land contract.

The deal closed Jan. 2, according to city property records.

The Denby Center property, mostly enclosed by fencing, has approximately 92,000 square feet of buildings. The most distinctive is the original mansion with an added gymnasium and cafeteria. It's at 20775 Pembroke Ave., just south of Eight Mile Road.

ARI Management plans housing and services for homeless veterans there, according to city of Detroit zoning board documents from mid-2018.

The company is registered in Southfield to Ieshula Ishakis. More specific plans for the complex were not immediately clear.

 

Multiple messages were left to reach Ishakis. A member of the buying entity also declined to comment through IDG managing partner Jack Echterling.

 

The IDG entity bought the Denby Center in May 2017 from Salvation Army as an opportunity at an "incredible price," Echterling said.

 

"It was in excellent condition," he said. "We were looking for a (joint venture) partner to operate an adult living center or to sell it."

 

Over its time of ownership IDG spent an estimated $250,000 on maintenance and upkeep, including on plumbing after a pipe burst, on electrical work and on carpet removal to reveal terrazz, Echterling said.

 

During that time several parties showed interest, but none worked out until ARI Management, he said — "it's not easy to finance a vacant building in Detroit, let alone northwest Detroit."

 

 

After buying the property in 2017, IDG listed it for nearly $3 million as a turnkey facility and began a marketing campaign, Echterling said.That was just over $30 per square foot. The company reduced the price to $2.5 million until it later sold for $1.8 million.

 

Jameson & Graves designed the Denby Center in 1937, Curbed Detroit reported in 2017. Its shape has modified with various additions since.

 

A cafeteria and gym were added on to the original mansion building. There are now seven structures on the property, including a storage shed, garage and three approximately 6,000-8,000-square-foot cottages, according to Echterling. The last of the cottages, never used, was built in 2009 and cost $1.55 million, he said.

 

The nonprofit Salvation Army Eastern Michigan Division decided to close the center and consolidate programs to its Acres of Hope Campus "for ... administrative and operating ... cost savings and program synergy," John Hale, executive director of development, told Crain's by email.

 

"It made sense to transfer the programs housed at Denby to our other facilities and to put the ... Pembroke property up for sale," he said in the email. "Numerous parties inquired about the Pembroke property, we held an auction, the original top bidder had financing issues, and ultimately, (the IDG entity) made the best offer."

 

IDG Holdings also recently bought the Specs Howard School of Broadcast Arts building in Southfield. The company's headquarters is in metro Detroit, but it also has an office in Miami.

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