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Music Hall’s $125 million expansion project, delayed this year while financing plans and other requirements for $80 million in nonprofit bonds were firmed up, could see a groundbreaking as soon as early next year.
The organization secured a $45 million bridge loan last month from an undisclosed financial institution, President and Artistic Director Vincent Paul said.
Legal counsel for the underwriters, New York-based Stifel Public Finance and Siebert Williams Shank & Co. LLC, a minority-owned firm led by founder and CEO Suzanne Shank in Detroit, are finalizing the bond memo, which will go to the Detroit Economic Development Corp. for final approval to issue the nonprofit bonds to pay for the expansion.
The bond memo will include the $45 million bridge loan and other particulars, such as an opinion letter from a law firm attesting to the bonds being used for a nonprofit purpose, Paul said, declining to name the financial institution providing the loan in advance of the memo going to the EDC.
The hope is the EDC will consider final approval of the bond issue as soon as January, and Music Hall can break ground on the expansion as soon as February, he said.
“We look forward to working together with the Music Hall and its underwriter to seek final approvals and issue the bonds to support this exciting project,” Lanard Ingram, senior director of marketing and communications for the EDC, told Crain’s said in an email.
Music Hall and its board of trustees — led by chairman Alex Parrish, senior partner at Honigman law firm— have secured $36.6 million in commitments toward the project over the past two years, Paul said.
The bulk of that, $31.6 million, is commitments for naming sponsorships for the Music Hall complex, planned concert hall, music academy and alleyway that will be activated with live jazz, a permanent exhibition of Detroit music legends and a pop-up café. Music Hall will announce the naming sponsors when it breaks ground on the project, he said.
Those commitments will be paid out over 10-25 years, depending on the sponsorship, with the proceeds used for debt service on the nonprofit bonds and the bridge loan, as well as education programs.
Beyond the sponsorships, the project has also garnered $2.5 million in philanthropic grants and a $2.5 million appropriation from the U.S. Department of Housing and Urban Development, secured by U.S. Sen. Debbie Stabenow, Paul said.
Over the next three to five years, Music Hall will work to raise another $40 million to fund the balance of the construction costs so it will not need to tap the bridge loan, he said.
Historic Music Hall has 300 names on its seats, and the Detroit Opera House has named bricks out in front. “I’ll be doing things similar to that,” among other fundraising efforts that is helping it get the initial shovels in the ground, Paul said.
Fifteen Music Hall trustees purchased the lot at 300 Madison St. next to its building in March 2022 from Madison Randolph Associates LLC for $4.6 million. As part of the larger project, Music Hall is repaying those trustees, Paul told Crain’s.
Years in development, the 100,000-square-foot, multi-story expansion is expected to take 30 months to complete once work begins.
The new building will include a contemporary concert venue with more than 1,900 seats, recording studios, offices for music industry professionals, a music academy operated by the nonprofit and a music store.
The windowed ground floor will also include a welcome and ticketing center with docents to guide visitors to local attractions and ticketing for Music Hall, other nonprofits such as Michigan Opera and Motown Museum, and a host of other attractions, from Broadway shows at the Fisher Theatre to sporting events, restaurants and bars.
Music Hall also plans to activate the alleyway between its historic building and the new construction as part of the project. Paul expects it to go online in phases between 2026 and 2027.
New York-based Tod Williams Billie Tsien Architects is lead architect on the project. Detroit-based and minority-owned Hamilton Anderson Associates is the local architect and Southfield-based Barton Malow is the general contractor.
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