GM Is Leaving the Renaissance Center

Forty-eight years after Detroit’s Renaissance Center opened, it still sparkles. Especially at night, when the mirrored glass walls reflect everything, from the boats on the Detroit River to casinos in Canada to the handful of small businesses located towards Greektown and Ford Field.

For much of its life, the RenCen reflected a city that sagged and swayed under every economic storm. Now, it reflects a city that is slowly but surely making its way back, regaining the swagger it never entirely lost.

As for the other glass buildings located near the Renaissance Center, they are now reflecting a 73-story white elephant.

General Motors bought five of the seven Renaissance Center towers in 1996 for a fire-sale price of $96 million, and proceeded to spend a billion making the RenCen fit to become GM’s global headquarters, moving thousands of employees over from Cadillac Place and other GM worksites.

On Monday, GM and the City of Detroit announced that General Motors would be leaving its still-sparkling home, taking up residence in a new skyscraper a mile away built by the billionaire darling of downtown Detroit real estate, Dan Gilbert. Last Friday, Gilbert formally named the building Hudson’s Detroit, reflective of the J.L. Hudson’s Department Store that sat on the site from 1891 till 1998 when it was demolished.

The rationale behind the move is that GM wants to transition from owner to tenant. GM will lease the top two office floors of the new 12-story building next to showpiece of the Hudson’s development, a 685.4-foot-tall mixed-use tower, which is now the second-tallest building in the state.

And it will happen quickly, with GM planning to move into the $1.4 billion Hudson’s Detroit development next year. It may be a classic good-news, bad-news scenario for the city. The city’s first new skyscraper in years is “a milestone for Detroit’s renewal,” Erik Gordon, a professor at the University of Michigan’s Ross Business School, told The Detroit News. “The bad news is the decline of RenCen, the most identifiable building in Detroit’s skyline. It’s going to be difficult to find tenants for all that space, and they are unlikely to be as prestigious as GM.” Indeed, the News cited a survey that said the Detroit metropolitan area had the highest office vacancy rate in the country, a sobering 25 percent.

Gilbert’s company, Bedrock LLC, had previously looked into buying the RenCen to add to the other properties it bought along the riverfront. Like a private real estate customer balking over the price of repairing a drafty old house, Bedrock backed away, faced with estimates of what it would cost to update the RenCen’s heating and air conditioning. One source said adding plumbing to turn much of the space into residential property would also be cost prohibitive.

The fact that, initially at least, GM needs just two floors of Hudson’s Detroit to replace the 5.5 million square feet of space it had available in the RenCen points up just how few workers GM needs in its main office. “We’ve been sort of limping along with what the capacity is since the pandemic,” GM President Mark Reuss told The Detroit News. “About 80 percent of the companies here have hybrid work schedules, including ourselves, so we’ve been sort of trying to figure it out.”

The view from the central tower, still the tallest building in Michigan, can be breathtaking, especially during cold winter months, when huge ice floes populate the river. But General Motors has seen enough of the RenCen, both outside and in, and no doubt wants to relieve itself of the financial responsibility that comes with owning the property.

GM CEO Mary Barra said that GM would partner with Bedrock and the local government to “plot a new path forward” for the RenCen over the next year or so. We look forward to seeing where that path leads.

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