Wyoming awaits close on former GM property
The former General Motors stamping plant site in Wyoming changed hands March 31, and city officials hope it promptly changes hands again so that a development company it is working with can begin removal of asbestos from the 75-year-old factory and then tear it down.
“We are waiting for the trust to authorize the closing,” Wyoming City Manager Curtis Holt said last week.
He was referring to the RACER Trust, which took title to the 92-acre site March 31.
RACER, which stands for Revitalizing Auto Communities Environmental Response, was the result of a settlement reached months ago between Motors Liquidation Co. on one side, and on the other the federal government, plus the 14 states that contain 89 properties that were owned by General Motors when it declared bankruptcy in 2009. MLC, the legal entity representing what is left of the bankrupted “old” GM, was established to dispose of the properties the reorganized GM no longer needs.
On March 31, the RACER Trust received all 89 properties and approximately $600 million in funds to use in remediating pollution at the sites and restoring the properties, according to the RACER website.
Wyoming city officials and Lormax Stern Development Co. of West Bloomfield announced in January that they had formed a partnership called Thunder Ventures LLC for redevelopment of the site, and that Lormax Stern had reached an agreement to buy the property from MLC.
The actual closing on that sale has not occurred yet, however. Holt said last week the closing was expected to have taken place April 1. When it does happen, he said, “the ownership will technically transfer straight to the city of Wyoming,” or more precisely, the Wyoming Brownfield Redevelopment Authority.
The GM stamping plant had been the city’s largest taxpayer, and a source of relatively high-paying jobs, before GM ended production there in May 2009. Wyoming officials immediately began hoping the property can again be the site of “value-added jobs,” in Holt’s words.
“With the infrastructure at the site — electric, water, sewer, the transportation network (which includes rail) — it’s a very valuable site,” said Holt. “We want to see advanced manufacturing on that site; we want to see truly value-added jobs.”
“We are the core group that is charged with disposing of the real property,” said Rasher. He added that since the property was conveyed to RACER by MLC, “it is now the responsibility of the trustee to finish even transactions that were pending at the time of the transfer.”
Rasher noted that the deal between MLC and Lormax Stern “has not closed.” When asked if there is something holding it up, he said he is “not aware of any obstacle or impediment to this deal closing,” and that “we fully intend to honor the contract that was entered into by MLC and the buyer.”
He noted, however, that RACER Trust, “going forward, probably would not have entered into a transaction like this” because the trust is responsible for “evaluating potential sales or leases of trust properties, and in this case, the transaction involves the buyer taking title to the property, performing some building demolition and then conveying title to the city, and then the city would have to try to market and sell or develop the property, which is really what the trust’s responsibility is.”
He repeated, however, that the trust does “not plan in any way to disrupt this deal or block it from going forward.”
Rasher said he did not know when the closing would take place, but “it will not be very long from now though, because this deal is pretty far down the road.”
Holt said there will be two sources of revenue for Lormax Stern in its partnership with the city of Wyoming. One is through sales of “recoverable” structural steel and other scrap metals during demolition of the 2 million-square-foot plant. Revenue also will be earned by Lormax Stern being the designer/builder of a future manufacturing facility or facilities on the site once it has been cleared.
Holt said estimates of the value of the “recoverables” is “all over the map.”
“If you talk to Lormax Stern, they don’t believe it will cover the cost (of demolition and clearing the site),” said Holt. “You talk to others (and) they say it will cover the cost.” Part of the uncertainty is due to future prices of scrap steel and other “recoverable” materials at the site.
The city will take into account Lormax Stern’s revenue stream from the “recoverables” and deduct that from the developer’s cost of demolition of the old GM factory and clearing the site for reuse.
“We’re not going to expand their profits by using tax dollars,” said Holt.
Reimbursement of development costs are planned through future capture of some of the increased tax revenues after the property is in use again.
For the near term, however, the property will be off the tax rolls while it is owned by the city brownfield authority.
“Hopefully, we sell it and don’t own it long — that we find that manufacturing again,” said Holt.
“In our agreement, we’ve got a five-year window with Lormax Stern for them to get somebody else in there,” he said, “so our hope is that within five years, we don’t own it anymore.”
Holt said The Right Place also is working to help find companies that will occupy the property.