Richard Hosey – Developing Companies, People, as Well as Projects

Kim Kisner
April 30, 2024
Business

The career of Richard Hosey, owner of Hosey Development LLC, has spanned development, consulting, financing, and asset management of more than 75 projects in Detroit totaling over $2.5 billion in development costs.

His most recent undertaking is the renovation of the former Fisher Body 21 plant, a $134 million project that will preserve and redevelop the plant into approximately 435 rental apartments; 38,000 square feet of commercial space; outdoor and indoor amenities; and up to 139 interior and 646 adjacent surface parking spaces. At least 20% of rental units will be affordable for those earning no more than 80% of the area median income ($51,200 or less for a two-person household).

SBN Detroit spoke to Hosey about his work and his impact on sustainability in Detroit.

Q: Tell us about Hosey Development.

A: I’ve been in real estate since 1996, and then I worked for Bank of America from 2005 to 2013 investing in urban development. That job brought me back to Detroit in 2008. I remember arguing with a city councilperson on why the Lafayette Building should not be torn down, and that it should be invested in and rehabbed. She said to me, ‘Would you do it?’ and I thought, yes, I need to stop complaining and start doing something. I started with the Kirby Center Lofts, which was an old Hebrew School in Midtown, and then it became a process after that.

Q: Talk about preserving affordable housing in Detroit and how you work to do this.

A: In 2008, the city was only building affordable housing, which created concentrated poverty.

On the other hand, as the market rate takes off, we need to ensure that it’s reasonably and rationally balanced so housing doesn’t become unaffordable. Revitalization tends to push out affordability, but the City of Detroit has an affordability requirement inside every project to ensure this doesn’t happen.

I love the work of the Detroit Land Bank. Affordable housing should not just be apartment living. With programs like Rehab and Ready, they are going into neighborhoods and driving change.

Q: You provide financing for your subcontractors. Can you tell us about that?

A: I focus on employing Detroiters. Detroit has plenty of construction talent, but there are not plenty of contractors with the capacity to carry a big job. There is an upfront economic load that comes with larger jobs, such as purchasing materials and paying for labor that many – most – construction companies in Detroit can’t shoulder.

For my first project – the Kirby Center – I started thinking what if I carry the job? I then met Mel Washington, a local developer who walked me through the process of doing so.

Now, my partner and I are using this same concept on the Fisher 21 project. We are using companies that have the skills and the organization to do a big job like this but can’t buy $1 million in HVAC equipment upfront and get paid later. So we do that part.

Fisher Exterior1 150x150 — FISHER 21 PROJECT EXTERIOR

It’s been great working this way. We get Detroit companies who do great work.

Q: How do you think sustainability plays into what you do?

A: As we build up the ecosystem such that our contractors in Detroit are getting the jobs, the economics go in a circle. Good-paying jobs mean the workers buy homes here, buy cars here, and spend their money here. That’s the ideal model.

For a lot of years, construction companies would come into the city, make their money, and go back to their homes in Oakland County or Macomb County. The key is to keep it in Detroit so the dollars stay in the community and circulate.

From an environmental standpoint, rehabbing a building versus tearing it down is much better for our planet. The challenge comes with being good to the tenant while being good to the planet. For example, we can put in huge beautiful windows, but how high is the electric bill going to be? We then need to find solutions for the most efficient furnace so the tenant isn’t impacted by a huge expense.

Q: The redevelopment of the Fisher plant is the largest Black-led development in the city. What is the importance of this?

A: I want this to become the everyday normal. So many processes focus on the idea that there is no talent or capacity in Detroit.

I hope to be able to show that larger projects can be handled by Black and Brown teams. We still have a long way to go. The Fisher project at $135 million is just 3% of the $5 billion in development announced in the last twelve months. But I hope to build a model for black funders and black talent to come together.

Q: What is the future of Hosey Development?

A: I will be in this market for the long run. I picture myself exclusively in Detroit except for one thing – mentoring new and existing developers. Again, I will feel more successful when more Black and Brown people and women are involved in development in the city.

And it’s happening. Many small and midlevel Black and Brown developers are coming into Detroit in ways you don’t see in other cities. Diverse developers are landing here because they can get a foothold. Preserving that should be a priority.

Removing barriers and growing talent based on ability as opposed to inherited wealth is one of the most important things we can provide in this market.

Be sure to subscribe to our newsletter for regular updates on sustainable business practices in and around Detroit.

Kim Kisner

With over 25 years of experience in the development and execution of strategic branding, content planning, and copywriting for brands such as Gatorade, Ford Motor Company, and Under Armour, and published by SEEN Magazine, The Jewish News, and countless health and lifestyle journals and blogs, Kim helps companies, brands, and people tell their stories.

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September 17, 2024 No Comments

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September 9, 2024 No Comments

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ITC Holdings and Its Role in a Greener Grid

September 3, 2024 No Comments

Founded in 2003 and headquartered in Novi, Mich., ITC Holdings builds, operates, and maintains high-voltage electric transmission systems that carry electricity in Michigan and around the Midwest. The company owns and operates approximately 16,000 circuit miles of transmission lines across 90,000 square miles of service territory. SBN Detroit interviewed Simon Whitelocke, senior vice president and chief business officer to find out more. Q: How does ITC approach sustainability? A: We are central to a broader sustainability initiative aimed at decarbonizing the electrical grid, facilitating the shift by interconnecting greener electricity, even though we don’t generate it ourselves. When building transmission infrastructure, we are highly mindful of our environmental impact. Our transmission lines, which have a lifespan of sixty to seventy years, traverse both urban and rural areas. We strive to be good neighbors to the environment, habitats, and wildlife around them. Before starting a transmission project, we conduct an environmental assessment to determine the best route, the type of land it will occupy, and potential impacts on sensitive habitats or endangered species. We also carefully plan the construction timing to minimize its environmental impact. Q: How has ITC evolved over time when it comes to sustainability? A: From day one, ITC has prioritized being mindful of our impact, making environmental responsibility a core part of our company culture. As we’ve expanded into diverse geographies and worked in various environments, our commitment has deepened. Our repertoire and tools have grown and adapted over time, leading to enhanced and improved expertise. Q: How has the infrastructure evolved, and what are the solutions for building toward sustainability? A: We operate with significant oversight, often collaborating with federal, state, and local governments, which provide a framework of standards. Cities and states have developed sustainability plans that we work within. For example, Michigan has the MI Healthy Climate Plan, and we align our efforts with it. The public is also more aware and engaged, and there is much greater support for sustainability initiatives today. Q: How does your work vary from state to state when it comes to dealing with habitat and environment? A: Every state presents unique challenges and regulates environmental matters differently, so it’s certainly not a one-size-fits-all approach. At the federal level, there are baseline protections for certain species that apply nationwide, but some states have additional protections for species-specific to their region. For instance, Michigan is unique due to its extensive wetlands. Compared to Iowa, which has fewer trees and less water, Michigan presents a totally different set of environmental factors. These variations create a lot of state-to-state differences in our work. We collaborate with local and federal governments on mitigation plans to ensure our impact on the environment is as minimal as possible. What are the biggest challenges that you encounter in managing habitat around building and maintaining infrastructure, and what are the lessons you have learned along the way? A: ITC takes great care to protect the environment and habitats surrounding our infrastructure, but the most challenging item we have encountered is invasive species. To counter this, we employ adaptive management techniques, meaning, that once we plant something, we don’t just walk away from it. We consult with biologists to regularly monitor those areas to control, and remediate, any invasive issues that may arise. Q: How do you handle materials and recycling? A: We partner with Goodwill Greenworks, among other recyclers, to recycle our construction material. As we replace infrastructure the old materials such as wires, cables, and metal copper steel go to them, versus a landfill. Goodwill Greenworks also creates job opportunities and supports community development by training individuals in green jobs and environmental management. When we decommission old equipment, such as batteries at substations, we ensure that these materials are properly recycled. This includes recycling oil, metals, and other components with the help of our experts. We send concrete structures used as foundations for equipment to recyclers that crush and reuse it as aggregate, or to produce new concrete. Similarly, untreated wood, such as old pallets or shipping crates is recycled into mulch or used as fuel for co-generation. Also, old wooden poles are often donated to landowners versus having to be disposed of in a landfill. Overall, we are increasingly focused on recycling and being mindful of our environmental impact. Q: How does ITC incorporate sustainability into its operations beyond infrastructure and recycling? A: In 2022 we received a Gold Tier Program Award for our efforts at our Novi headquarters and we’ve been awarded several Conservation Certifications from the Wildlife Habitat Council. I think this demonstrates our commitment to environmental stewardship. The property the campus sits on includes significant wetland areas, and we are highly sensitive to maintaining and protecting these natural spaces. This approach extends to our transmission corridors and warehouses, where we prioritize living in harmony with the environment. The 2003 blackout was ultimately triggered by a power line coming in contact with a tree, so we are particularly mindful of managing vegetation under our power lines. When we remove trees, we have replaced them with habitats such as prairies that support local species and pollinators. This reflects our focus on sustainable land management practices. Additionally, many of our transmission corridors are integrated with walking and biking trails, allowing people to connect with nature while ensuring the reliable delivery of electricity. We strive to balance the need for power with the importance of preserving green spaces. Be sure to subscribe to our newsletter for regular updates on sustainable business practices in and around Detroit.