Something Is Not Right With This $6 Million Bid To Buy The World Largest Industrial Ruin

Enigmatic Bid And Cryptic Answers Make It Appear Shenanigans Are Afoot

 

 “Never pay more for an acquisition than you have to.-Ferengi Rule of Acquisition #3

 

Packard 1

Pandemonium erupted in Detroit media last night and today when it was announced that a doctor from suburban Houston named Jill Van Horn was the top bidder for the abandoned Packard plant on Detroit’s east side with a winning bid of $6,038,000.

The 40 acre Packard Plant opened in 1903 and churned out the Packard luxury automobile until the plant closed in 1956.  It was replaced by smaller manufacturing businesses for the next 25 years but as more automobile suppliers relocated outside the City of Detroit. The Packard Plant became a hot spot for for artists, photographers, graffiti artists, tourists, urban spelunkers and urban adventurers from the around the globe all interested in Rust Belt Chic. Two enterprising photographers even began taking tourists on “Ruin Porn” tours.

The site is extremely dangerous. Fires break out daily as both the Detroit Police and Detroit Fire Department refuse respond to calls from the site. Steve Neavling from the Motor City Muckraker wrote about how large chunks of the abandoned Packard Plant spilled onto the road nearly striking a pedestrian and about two tourists who were carjacked.

The enigmatic bid is shrouded by cryptic answers by the people involved. According to the Detroit Free Press, someone responded via text message from her husband’s cell phone confirming the Van Horns put in an offer and refused to say anything else.

Packard 3The Free Press did reach an associate of the Van Horns named named Genevieve Lowrence who was warned by the Van Horns she may be getting calls from the news media. She told the Free Press, “I don’t know where they would get $6 million from. I know she’s an osteopath in town. That’s it.”

Call me a cynic but I’ve  been around the Detroit political scene long enough to know when something doesn’t smell right. This definitely smells like someone took a serious crap on the lap of Wayne County Treasurer Raymond Wojtowicz after eating lunch at Xochimilco’s Mexican restaurant.

Let’s be realistic. The only people buying real estate in the City of Detroit right now are the parasitic bottom feeders with deep pockets and clueless amateur investors from outside Michigan who know nothing about the region, it’s corruption or it’s real estate.  An experienced real estate investor is not going to plop down $6 million on a 40 acre industrial ruin with toxic soil in a city like Detroit that even if cleared and decontaminated is worth no more than $1.25 million.

Let’s look at the facts of this sale and you’ll understand why I am suspicious.

First, no one bid on the site at the first round of the auction last month when the minimum bidding price was $1 million. The property then went to the second round of bidding for $21,000 ($500.00 a parcel). On October 8th someone placed the minimum bid with no activity for 2 1/2 weeks. Then, three hours before the end of the auction there were over 100 bids with bidding jumping from $21,000 to $601,000. The bidding then jumped to $5.5 million in the final hour with the Van Horn’s bid of $6,038,000 coming in right after 5pm. Assistant Wayne County Treasurer David Szymanski decided to extend the sale for an additional 35 minutes. Something he did not do with other parcels.

Packard 2Second, if Genevieve Lowrence’s assessment of the Van Horn’s finances is correct, there are a numerous questions that need to be asked.

How are the Van Horns coming up with $6 million? How are they going to pay the estimated $20 million in demolition costs for the rest of the buildings, clear the debris and clean 110 years of toxic contaminants from the land? The Michigan Department of Environmental Quality’s report from 1999 states there are piles 6-18 inches deep of Asbestos in the tunnels under the plant.

The Van horns better not look to Lansing for help unless they’ve reached deep in their pockets and given money the Governor Snyder’s NERD fund. With the current economic climate in Michigan, competition for grant funds from the state of Michigan to subsidize a demolition project like Packard is ferocious for the few dollars the state does have to give for demolition.

Mark Morante, senior vice president of program administration for the Michigan Economic Development Corporation, the state’s quasi-public economic development agency, told the Detroit Free Press last year that there is a demand from international companies for shovel ready industrial sites in Detroit but the Packard site is full of challenges,

“The cost of putting it back in use is so high — basically, it’s economically unfeasible. But they need new factories to be operational within 15 months. They cannot go to the Packard site and meet that deadline. It is a difficult issue, particularly when we’re trying to assist Detroit, Saginaw, Flint, Pontiac to reinvent themselves. There is a need for up-front money to get those kinds of things done.”

On top of all this, who in their right mind would pay the estimated $150,000 in taxes when the Detroit police refuse to answer calls from the property and the Detroit Fire Department refuses put out the arson fires that burn on the site on a daily basis? Because of that, what insurance company is going to issue a liability policy for a site as dangerous as the Packard?

So either the Van Horns are total idiots when it come to amateur investing or they’re a front for another entity. Either way something stinks in Detroit and it’s not coming from the Detroit Incinerator.

 

Click on a tab to select how you'd like to leave your comment

Speak Your Mind

*