One of the Detroit area’s most infamous motels is being shopped as a redevelopment opportunity.
The Motorama Motel on Eight Mile Road at Woodward in Ferndale is for sale for a little over $1.5 million. The 21,000-square-foot, two-story building is being listed by real estate brokerage CBRE.
An associate working with the listing agent tells Daily Detroit the owner won’t share financials for the business, but says the site’s location makes it most valuable as a mixed-use redevelopment — possibly as first-floor retail and second-floor residential.
In 2016, the city of Ferndale denied the Motorama a hotel business license on the recommendation of its then-police chief. He said the motel is a haven for prostitution, human trafficking, drugs, assaults and other crimes. The motel’s owner, Phil Patel, filed a lawsuit against the city challenging that decision, and the case has been tied up ever since in the courts. The motel remains open.
Patel said he bought the 60-room motel for around $1.25 million in 2003 and made around $800,000 worth of renovations. His business model is to provide affordable long-term lodging to low-income people who use many of the 60 rooms.
Hank Carpenter, an associate at CBRE, says Patel has received one serious offer, but it wasn’t quite enough to sell. The property also includes a large advertising billboard on the roof of the building that brings in about $10,000 a year in additional revenue.
The city of Ferndale revoked the business license for both the Motorama and the nearby 8 Wood Motel in 2016 after a person who purchased heroin from a drug ring using both motels was found dead outside a nearby home.
8 Wood later entered into an agreement with the city to beef up security and deter crime and has reportedly been in compliance with that agreement.
