Westin Book Cadillac returning to elegance

Once a ruin, Detroit landmark set to open this fall is already generating buzz, lots of business

BY JOHN GALLAGHER • FREE PRESS BUSINESS WRITER • April 22, 2008

Six months and counting.

Nearly a quarter-century after Detroit's famed Book-Cadillac Hotel closed, workers were busy Monday getting it ready for a fall reopening as the Westin Book Cadillac Detroit, and the team that saved it prepared to announce grand-opening details today.

Celebrity chef Michael Symon is to be introduced at a news conference today as the creator of the hotel's new signature restaurant, tentatively to be called Roast.

Other details: The hotel will hold grand-opening festivities Oct. 24 and 25, and begin taking room reservations Nov. 1 for stays starting Nov. 15.

For months, the hotel has been booking special events for late this year and beyond, and bookings are running ahead of expectations, Scott Stinebaugh, director of sales for the hotel, said Monday.

"Of course, we sold out for the auto show. Of course, we sold out for the Final Four," Stinebaugh said, referring to the 2009 North American International Auto Show and the college basketball championships being played at Ford Field in 2009.

"But we are really getting booked up for the holiday season and for the spring and summer wedding season, as well."

At an afternoon news conference today, Cleveland-based developer John Ferchill, the new owner who is doing the renovation, is to introduce Symon and present other details. George Jackson, Detroit's chief development officer who helped negotiate the complex $180-million financial deal, is also scheduled to speak.

Opened in 1924 with an Italian Renaissance-inspired design by architect Louis Kamper, the Book-Cadillac operated for six decades under various owners as Detroit's leading hotel. John F. Kennedy spoke there, and the hotel was famed for hosting movie starts and sports greats, not to mention generations of weddings, bar mitzvahs, graduations and retirements.

The hotel's fortunes declined with those of Detroit at large, and it closed in 1984. It languished in bankruptcy for many years, with windows broken and plaster dissolving under rain and snowmelt, until the interior became a dank ruin.

The Ferchill Group, which specializes in urban redevelopment projects, spent two years putting together a complex financial package to raise the money needed to reopen the hotel, and another two years on reconstruction work.

The deal includes the creation of about 67 condominiums on the upper floors, more than 50 of which have been presold, Ferchill said.

On Monday, work crews were still busy throughout the structure, but the job site was at least beginning to take on the semblance of recognizable rooms. In the Venetian, a fourth-floor ballroom, the ornate ceiling with a wealth of classical and Renaissance-inspired ornamentation was mostly done. The same was true in the Italian Garden room, also on the fourth floor.

"There is nothing like this in the city -- not even close," Stinebaugh said during a tour.

On the north side of the hotel, a new facility has been added that will include the Woodward, a 600-seat ballroom, as well as a fitness center and pool, business center, spa and various shops and restaurants.

The Westin will have the capacity to handle three weddings at the same time, Stinebaugh said.

Different city, similar story

Pittsburgh rebirth proof that Michigan's industry may not define it forever

BY KATHERINE YUNG • FREE PRESS BUSINESS WRITER • April 14, 2008

PITTSBURGH -- Few cities in America understand Detroit's economic pain better than the former steel town of Pittsburgh. But empathy isn't all it has to offer.

Pittsburgh knows what it takes to survive a massive loss of manufacturing jobs. Two decades after most of its steel mills shut down, the city has transformed itself into a diversified, service-oriented economy, albeit with a smaller population.

Its efforts to remake itself provide plenty of lessons for southeast Michigan and other areas grappling with these issues.

"The Pittsburgh economy is a healthy place," said Frank Giarratani, an economics professor at the University of Pittsburgh. "If Detroit can somehow find itself in the same place, it will be OK."

The two metropolitan areas share striking similarities.

Both long relied heavily on one industry for economic growth and ignored warnings to diversify. Both are home to strong research universities and foundations and a multitude of research and development centers. And both see their populations getting smaller and grayer.

But Pittsburgh was forced to cope with a severe economic crisis much earlier than Detroit. The outcome provides a glimpse of what may be in store for Michigan.

Today, along 2 miles of the Monongahela River, just east of downtown, former steelworkers dine and shop at the $300-million Waterfront retail, residential and office development, where U.S. Steel's flagship Homestead Works mill once stood.

Across the river to the west sit the offices and laboratories of the Pittsburgh Life Sciences Greenhouse. It's playing a key role in the growth of start-up companies in fields such as medical devices, therapeutics and biotechnology tools.

And in what might be the biggest sign of change, the University of Pittsburgh Medical Center, the city's largest employer, is preparing to move its headquarters to the prominent U.S. Steel Tower this spring.

Thanks to expansions in health care and higher education, Pittsburgh now boasts more jobs than before the steel industry collapsed in the mid-1980s, said Chris Briem, a regional economist at the University of Pittsburgh's Center for Social & Urban Research.

"We have diversified," he said. "We feel your pain. We've been there."

Last year, venture capital investment in the Pittsburgh region was almost double the amount in Michigan, according to the PwC/NVCA MoneyTree Report. The city's technology association, the Pittsburgh Technology Council, has 1,400 members compared with 887 for Troy-based Automation Alley.

Troubles along the way

To be sure, not everything has turned out rosy.

When thousands of laid off steelworkers fled the area in search of jobs, they took their children with them. The city's population, now just more than 310,000 compared with more than 420,000 in 1980, never has recovered from the blow, and job growth has slowed in recent years.

Pittsburgh's finances also took a hit. After years of chronic budget deficits, the city has been under state oversight since the middle of 2004.

And many of the former mill workers who stayed in the area, such as Jay Weinberg, are earning less money than they would have made had the mills never gone under.

To survive, thousands of them opened their own businesses. Others juggled multiple low-paying jobs. Many of their wives went to work for the first time.

Weinberg, whose father and uncles worked in the mills, is one of the luckier ones. The ex-Homestead worker and former United Steelworkers officer serves as vice president of Maglev Inc., which is trying to bring magnetically levitated high-speed trains to the Pittsburgh area.

"I almost feel guilty for having survived so well," said the 59-year-old Pittsburgh native, who grimly recalls the suicides and mental breakdowns that followed the mill layoffs.

But the steel industry hasn't completely disappeared from Pittsburgh.

U.S. Steel still calls the city home and operates a research and development center and three manufacturing facilities in the area. The region also contains a number of thriving specialty steelmakers and steel service firms.

But the industry's share of the metropolitan area's total employment has sunk to just 1.3% from 14.5% in 1970. And Pittsburgh's steelmaking capacity now accounts for less than 4% of the country's total capacity compared with nearly 12% in 1980, Giarratani said.

"Detroit in a lot of ways has a leg up on Pittsburgh," said James Epolito, a Pittsburgh native and the chief executive of the Michigan Economic Development Corp. "We are still going to be the auto capital of the world.

"We've got to turn our present attitudes around in Michigan. We will come back, but it's not going to be overnight, and there are no quick fixes," he added.

Lessons learned

In Pittsburgh, economic and workforce development officials have gained some hard-won perspective on mistakes made and things done right in their struggle to find new sources of growth.

Some of the key lessons:

• More attention should have been paid to the importance of entrepreneurism. The Pittsburgh region lags in the rate of new businesses formed, according to Pittsburgh TODAY, an online report card about the region.

Business leaders tried to lure big companies to the area rather than creating an entrepreneurial culture, despite having universities and corporate research and development in the area, said Harold Miller, a local consultant and a former president of the Allegheny Conference on Community Development.

• Pittsburgh should have acted quicker to develop other industries that steelworkers could transition into rather than initially trying to bring the steel mills back, said Barry Maciak, director of the Center for Competitive Workforce Development at Duquesne University.

"We spent a lot of time trying to save what couldn't be saved," he said. "When it's over, sometimes it's over."

• It's worth investing in organizations that help start-up companies get off the ground.

Since 2002, the state-funded Pittsburgh Life Sciences Greenhouse has directly invested nearly $10 million in more than 45 fledgling companies involved in medical devices, therapeutics and other life science specialties. More than a dozen start-up firms also are leasing lab space at the Greenhouse at discount rates.

In addition, six senior-level life sciences executives recruited by the organization are helping 220 local life sciences companies grow their businesses.

"These former CEOs have experience these companies can't get anywhere, and if they could get it, they couldn't afford it," said John Manzetti, the Greenhouse's chief executive and president.

Since late 1999, another local organization, Innovation Works, has directly invested $37 million in 104 start-up companies in areas such as advanced materials, consumer products and electronics. A team of business advisers also works with these companies.

"You can never have too much of this really early-stage capital," said Michael Stubler, president of the Pittsburgh Venture Capital Association and managing director and cofounder of Draper Triangle Ventures.

• Vacant industrial sites and deteriorating neighborhoods can be transformed into assets.

When it became clear the steel mills weren't coming back, the city teamed up with the Allegheny Conference on Community Development, an economic development group, to buy properties, demolish the facilities and clean things up for development.

"Once you have the sites ready, you would be surprised at how much it makes a difference," said Mulugetta Birru, director of the Wayne County Economic Development Department and a former executive director of the Urban Redevelopment Authority in Pittsburgh.

Nowhere is the city's achievement more visible than at the Waterfront development located in the nearby suburb of Homestead, which is to Pittsburgh and the steel industry much like Highland Park is to Detroit and the auto industry. It reminds visitors that shuttered steel mills don't have to become permanent eyesores.

The 260-acre retail and dining destination opened in 2000 after several years of planning and development that included new roads and sewers and changing zoning rules involving three communities.

And revitalization efforts weren't limited to mill sites.

The Lawrenceville neighborhood has reinvented a lengthy portion of its once rundown main drag, Butler Street, into a thriving arts and design district with one-of-a-kind boutiques, art studios and restaurants.

To market the district, a community development group called Lawrenceville Corp. distributed more than 100,000 copies of a guidebook for shoppers. The zone now features more than 70 design-related businesses. Every April, it holds a 24-hour art show, called Art All Night, that attracts thousands.

• Don't underestimate the power of community spirit and pride.

More than anything else, Pittsburghers' devotion to their city seems to have kept it from becoming a wasteland. Those who didn't leave town when the mills closed have formed an emotional attachment to the area on par with the fierce loyalty exhibited by Pittsburgh Steelers fans across the nation.

"People love this city like no other city in the world," said Michael Madison, a University of Pittsburgh law professor who writes Pittsblog, a blog about the area.

Pittsburgh's devotees even include people such as Mike Stout, who says the city has gone downhill because of the loss of manufacturing jobs.

Like many others, Stout, 58, has learned that life doesn't stop because Big Steel leaves town. He now runs a small printing shop on Eighth Avenue in Homestead, near where the mill he once worked stood.

The former United Steelworkers grievance chairman also spends time on his singing career. He's part of a group that performs at union conventions around the world. He writes his own songs and has compiled them into CDs with titles such as "Break the Chains" and "Soldiers of Solidarity."

"Manufacturing work is what made this country what it is," he said during lunch at a seafood restaurant at the Waterfront.

Asked how it feels to be dining on the site of his former mill, he pauses and ruefully admits, "It's weird."

Then he continues eating.