DEVELOP DETROIT: Sonya Mays has her hands full. Not only is she a member of the Detroit Public Schools Community District board of education, she is also an active real estate developer in town as president and CEO of Develop Detroit, having just kicked off construction on a long-in-the-works project in the Sugar Hill Arts District neighborhood. That $36.3 million project is slated to bring 68 apartments, including some units for formerly homeless veterans, to the corner of John R and Garfield.
A University of Michigan graduate, Mays also spent time as senior adviser to Detroit's former emergency manager, Kevyn Orr. She spoke with Crain's about real estate, the city's financial issues caused by the COVID-19 pandemic and the school district's response to the disease.
Let's start by chatting about the Sugar Hill project and where it is now, and where it started.
We anticipated being in the ground in late 2018, early 2019. The project ran into a number of challenges, some that are just very characteristic of doing development work in Detroit. This project coincided with a pretty steep escalation in construction costs more broadly in the city. So it took us awhile to work through the impact of that. But eventually we got to a point where we had a deal that worked and was ready to go, and then COVID hit. That set us back another handful of months. This has just been a truly amazing group of people involved in this transaction, from the city to our financial partners to the development team, just a whole host of people who really bought into the vision that the city wanted to see for this site and the design we brought forward, and staying committed to this through about every conceivable challenge that a project can go through, plus a pandemic.
You've been active in the North End and some other neighborhoods. Can you give us a snapshot of what else you have going on?
Our core work continues. But make no mistake, there have been a lot of adjustments that are COVID/pandemic related. In the North End, it's pretty wide ranging. We have renovated homes there. We built homes there. We built townhouses. We own a couple rental apartment buildings in the North End as well.
I really have to say that there's always this baseline complexity there, but trying to kind of work through a crisis like this is utterly fascinating. We've had to make adjustments on everything from, "How do we keep selling houses when I can't go out to the real estate listings" and then the pendulum swings, rates dropped so all of a sudden there's a single-family ownership market that is pretty robust compared to last summer.
Our multifamily work is super interesting because we have a number of essential workers and other people who are economically more vulnerable, so we are trying to kind of see through the role of the landlord on the social side. How do we react to people who are struggling with rent and food, but then balance that with our financial obligations because we also have a mortgage lender on some of these transactions? So that's been really challenging and great working through how to balance our mission with the financial realities of being a real estate owner.
Given your former title of senior adviser to Detroit's former emergency manager, Kevyn Orr, I'm curious about your outlook on the city's finances, particularly given the casino revenue hit.
I've definitely had my hands full with real estate and the school board. I think the world looked a lot more dark in April, May and early June than it does now. I know it's got to be a relief that the casinos are reopened. I think the mayor and City Council and financial leadership of the city did a really good job of preparing for a rainy day. This is something that I've pounded the table about at DPSCD. I think it could have been a lot worse if they weren't sort of prepared to absorb some portion of the casino revenue. I'm just watching to see how consistently Detroit, and business, and Metro Detroit, adjust to the realities of COVID.
My personal thesis is that this is going to be with us for an extended period of time. I love that everyone is chasing a vaccine, but I understand that in the history of diseases or viruses, we've only completely eradicated just one thing, and that's smallpox, so I'm skeptical that this is going to go away. I think we're just going to have to figure out how to adjust, do things that matter for business, for society, for communities, and just do those things as safely as possible, and protect as many people as possible, particularly vulnerable people.
So for the city, this is a question of whether we can get back some measure of the trajectory that we were on. By the end of this current fiscal year, I feel pretty good about it, but if we go into the fall and have to have another complete shutdown, then I get really, really nervous about the city's economic stability. That being said, they have an excellent team over there and I don't know that the mayor gets the recognition he deserves. We as a city fare pretty well with former hospital executives in those seats.
What should our audience understand about how DPSCD is approaching this?
There are no easy answers. The district leadership is working through all the issues that are created by trying to educate, both in person and virtual. There's a meaningful portion of our student population in DPSCD that is just going to fare better with in-person instruction. There's tons of research. So it's trying to find the balance between giving our students what they need to succeed, while still protecting them, protecting their families and protecting the teachers and staff. That's what we are trying to achieve, and using science to get there, and the learnings and best practices from other places. It is challenging, and like I said earlier, I really do believe that we're going to be living with COVID for an extended period of time. There's some activities that, as a community, are essential. We decided that our grocery store workers are essential, health care workers, transportation. And most people, whether they have kids or not, view education as an essential function. I think we just have to figure out how to deliver that in the best possible way.
What keeps you busy outside of real estate and your work on the school board?
The activism around George Floyd and Black Lives Matter kind of prompted me to go back through a reading list that I had a long time ago — books like "The Color of Law," I've been working my way through that. I've actually gotten to be a much better cook than I was before. I started to pick up a produce box every week at Eastern Market. There's this drive-through service, so I pick up one of those and those are my fruits and veggies that we can figure out how to make something happen with.
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Developer, school board member Sonya Mays on learning to adjust - Crain's Detroit Business
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