by Dan Rafter
Kyle Westberg looks at downtown Pontiac in Michigan and sees nothing but promise. Yes, Pontiac, like Detroit, struggled mightily during and after the Great Recession. The state of Michigan even appointed an emergency manager to take over the struggling city from the summer of 2010 through the summer of 2013.
But Westberg, president and chief executive officer of West Construction, today sees the beginning of a revival in the city’s downtown. And he’s helping to push it along by taking on the $20 million renovation of the 895-seat Flagstar Strand Theatre for the Performing Arts.
The renovated theater, which has sat empty since the mid-1990s, is expected to reopen its doors in the fall of this year. The hope is that the theatre, along with a new barbecue restaurant that will also open in the space — Slows Bar-B-Q — will provide another boost to downtown Pontiac.
“We feel that a performing arts theater, a destination gem, will bring in more restaurants and retail establishments,” Westberg said. “We feel that it will bring more job opportunities for the citizens of Pontiac. We can see a day when downtown Pontiac will be the arts, cultural and entertainment center for all of Oakland County. We don’t have a district like that now in the county. We feel that downtown Pontiac has the potential to be that.”
West Construction, of course, isn’t the only partner involved in restoring the former vaudeville house and one-time movie theater. West Construction is the general contractor on the project, while TDG Architects designed the renovation.
Financing for the Flagstar Strand Theatre project comes from a private-public partnership betweeen Develop Michigan, an affiliate of Cinnaire; the Michigan Economic Development Corporation; IFF; Enhanced Capital; Opportunity Resource Fund; Oakland County; and the city of Pontiac.
Making an impact
Develop Michigan is a relatively new organization, getting its start in 2013. Then, the organization had plans to bring financing to commercial real estate deals in Michigan that weren’t getting done.
Rick Laber, president of Develop Michigan, said that banks in 2013 were not overly excited about financing commercial real estate projects. In its earliest days, Develop Michigan acted as the senior debt lender in construction deals.
Slowly, though, banks did return to commercial real estate, first in construction lending and then by providing permanent debt. As the banks have returned to financing, Develop Michigan has turned to other ways of helping to make construction deals happen, most notably by providing bridge financing that traditional banks rarely provide.
That is the role that Develop Michigan is now playing in the Strand Theatre project, Laber said.
“The theatre project is an important one for us,” Laber said. “It will provide job creation in the area in a significant way. It should provide 133 construction jobs and 83 full-time jobs. That will have a positive impact on downtown Pontiac. We are interested in development and deals that can have a positive impact on low-income communities. That is a focus for us.”
Laber says that Detroit has benefitted from the efforts of Quicken Loans founder Dan Gilbert, who has sunk plenty of his own money into helping to rejuvenate that city’s downtown core. Pontiac, though, doesn’t have a Dan Gilbert. Instead, it has to rely on developers who are willing to take a chance on deals such as the Strand Theatre project, Laber said.
“Will this lead to more entertainment and restaurant projects in downtown Pontiac? None of us know for sure, but I think it will. We have to start somewhere. This is good place to start. We’ve seen it in other markets: Someone starts the development off with a project like this and then more development follows. I would be surprised if there wasn’t new development now that the theatre project is under construction.”
Westberg and his partner and brother Brent Westberg purchased the theatre in 2013 from the city of Pontiac. At the time, another potential buyer was considering turning the empty building into a nightclub. Westberg said that he didn’t see that as the best use of the space.
“We knew the theatre was in great shape, that it was an iconic and a gem of the community,” Westberg said. “We thought it should remain a performing-arts theater as originally intended.”
The non-profit Encore Performing Arts Center will manage the daily operations at the Flagstar Strand Theatre. That organization’s president and chief executive officer, Bill Lee, said that there are 2.7 million residents living within a 20-minute drive of downtown Pontiac. He said that the Strand Theatre will help bring more of these residents into the city’s center.
“Our programming initiative is to inspire and educate via the performing arts,” Lee said.
The theatre will host a variety of performances, including musical acts, theatrical productions, comedy shows and family entertainment.
West Construction already has plenty of experience in downtown Pontiac. The company built, owns and operates Pontiac’s Lafayette Place development, which includes the Lafayette Place Lofts, an Anytime Fitness location and Lafayette Market café, catering service and market.
Westberg said that this mixed-use development has already inspired new businesses to enter downtown Pontiac. He has also seen an influx of investors purchasing properties in the downtown. Some of these properties are in the redevelopment process now, Westberg said.
“The location of downtown Pontiac is central to the county,” Westberg said. “All of the citizens of the county can access the downtown quickly. There is great transportation into and out of the city, whether you’re talking about driving in and out, taking the train or catching a bus. Our downtown is a very walkable community, and there are plans to make it even more walkable, to bring even more connectivity to the surrounding neighborhoods. We think the Flagstar Strand Theatre will spur momentum for this kind of central, cultural district in downtown Pontiac.”
For Laber, this is welcome news. It’s also the goal of any commercial real estate project that Develop Michigan helps to fund, he said.
“Pontiac has struggled from an economic perspective,” Laber said. “Anything we can do to provide investment in a downtown like Pontiac will help spur additional economic activity, will help breath more life into the downtown. These things feed on each other.”