ARRA bonds may not spark sale of the Wyoming GM plant
The future is still a mystery regarding the big, silent General Motors Corp. stamping plant on 36th Street in Wyoming.
City officials began the summer with a “reuse concept plan” for the 92-acre site at 300 36th St., “to guide clean up, demolition, acquisition, marketing and redevelopments,” with the ultimate goal of maintaining “a strong industrial base” in Wyoming and replacement of “lost jobs with other industrial employment opportunities,” along with replacement of the tax based lost when GM entered bankruptcy and closed the plant.
Meanwhile, Motors Liquidation Co. in Detroit is trying to sell the plant, along with a lot of other former GM properties in several states.
Last week a staff member of The Right Place Inc. economic development agency told Kent County officials that it may be too late to use re-allocated American Recovery and Restoration Act of 2009 bonds to make the property more attractive to potential investors.
“We were hoping that we would have had a redevelopment entity or developer in hand, that could have also used that financing technique. But we don’t. They take time. We’re just not far enough along with the transaction,” Rick Chapla, vice president of urban redevelopment at The Right Place, told the Business Journal.
Some of the so-called stimulus bonds awarded to Michigan for encouraging low-interest loans for developers in a county-by-county basis have not been allocated. In August the Michigan Legislature passed PA 153, which allows the reallocation of unused bonds to counties that can use them. Under the new law, a municipality may retain its ARRA Recovery Zone Bond allocation if, before Oct. 8, it comes up with an eligible project, including the borrower.
“I’m not going to close the door completely,” added Chapla, noting that there is “a little time left before the end of the year” when the bonds must be put to use, but he indicated that the absence of a developer at this time isn’t encouraging.
“These are complicated pieces of property that will take time” to change hands, said Chapla.
Tim Yost would agree. Yost is a spokesman for Motors Liquidation, the owner of the 36th Street stamping plant.
Motors Liquidation is the new legal name given to “what used to be General Motors Corporation for a hundred years,” when it entered bankruptcy last year, according to Yost.
“In general, trying to sell any of these large sites — plants — is a very difficult endeavor for a number of reasons,” Yost told the Business Journal in August. “They’re generally quite large. Generally, they are fairly old, and in almost every case, they have environmental remediation issues that come along with them, that add a lot of expense to everything. Plus, to add on top of that, it’s not a great U.S. economy. In general, there is not a huge demand for these types of facilities anyway, in any economy.”
The plant is one of about 15 shuttered GM factories around the country that Motors Liquidation is trying to sell — plus more than 100 other odd parcels of land, ranging from office buildings, two churches, a landfill, a small golf course and even houses. GM had been forced to buy scores of houses in Bedford, Ind., after the company polluted the land to which the residences are adjacent .
Although based in Detroit, Yost actually works for AlixPartners, which is operating Motors Liquidation. AlixPartners is a global firm of senior business and consulting professionals who specialize in improving corporate financial and operational performance, executing corporate turnarounds and providing litigation consulting and “forensic accounting services when it really matters — in urgent, high-impact situations,” according to its website.
More than 1,500 people worked at the Wyoming stamping plant, which ceased production in May 2009. The two million square feet plant, opened in 1936, was the city’s highest taxpayer, which City Manager Curtis Holt estimated had generated about $1 million a year for the city treasury.
Federal funds have already been set aside to remediate environmental contamination at the vacant GM plant sites around the country. Wyoming officials are contemplating the possibility of complete demolition of the building and removal of the slab it is on, because the building itself is viewed as too large for any single company to need anymore. The acreage might then be broken up into separate parcels for development. But Wyoming City Hall is “adamant” about one thing — that those 92 acres remain industrial.
“This is most important,” said Barbara VanDuren, deputy city manager and the city’s director of economic development. “We are adamant that the property stays industrial. We are really not looking for a commercial use on that property.”
“Jobs are the most important thing and we think that would be the best value — to have that re-used as industrial,” she added.
VanDuren told the Business Journal last week that there are several “other areas in the city that are open for commercial use,” including locations on 44th St, along U.S. 131 and several sites on 28th Street.
“So we really need to keep that” former GM factory site “industrial, not only for the use with the rail and highway but for the manufacturing jobs.”
The railroad spur to the plant, along with the proximity to U.S. 131, are seen as major assets of the site.
“It seems like most people who are coming to us today with (proposed) economic development projects are looking at use of rail again,” and the rail spur “actually cuts right through the plant,” which could possibly make the factory desirable to someone, as is.
“However, if the plant is demolished, there still is rail access (to the site), which seems to be very important,” added VanDuren.
“I can’t imagine that not being an industrial site now,” said Doug Kochneff, Wyoming DDA board chairman, mentioning the size of the property and the industrial character of the neighborhood it is in.
VanDuren said city officials have “heard there are a few developers that are interested in the plant,” but added, “we don’t know what the offers are or which one will be accepted” by Motors Liquidation.
While insisting that he is not specifically referring to the Wyoming plant, Yost said Motors Liquidation has been “pretty heartened by the amount of interest we’ve had from various potential buyers. Some of the interest has been from manufacturing companies; some from mixed use companies and even from intermodal transportation companies that rely on semi-trailers shipped on rail flatcars.”
Again stating he is not referring specifically to Wyoming, Yost said Motors Liquidation has “about a dozen different” proposals of various types “that are in the pipeline and we think could close by the end of the year.”
A news release from Motors Liquidation at the end of August stated the company is “presently in negotiations to sell 17 properties, in addition to those already sold.”
One GM plant already sold is in Wilmington, Del. The company also had a functioning plant in France that was recently sold back to the new General Motors for one euro, said Yost.