Can an Old Auto Plant Come Back to Life? West Michigan Community Aims to Try
CRAIN’S DETROIT BUSINESS
January 11, 2012 4:05 PM
By: Pat Schellenbarger
The General Motors Corp. stamping plant in suburban Grand Rapids was born in the Great Depression and died in the last recession. Now West Michigan government and economic development officials are betting that the site will enjoy an economic revival.
Eighteen months after demolition began on the 2 million-square-foot factory, the site is nearly cleared and will be ready for a prospective manufacturer by July, Wyoming City Manager Curtis Holt said. The city and its partners are embarking on a marketing campaign to attract one or two large employers.
The plant is among 105 auto manufacturing sites in Michigan that have closed since 1979 and one of 61 that remain vacant, according to a recent study by the Ann Arbor-based Center for Automotive Research.
General Motors Corp.
opened the stamping plant on 36th Street in 1936, 23 years before Wyoming became a city. Over the decades, the plant was repeatedly expanded and updated.
In 2005, the plant received its last tax abatement when it installed $200 million worth of new presses.
That’s why Holt was shocked when he received a call from the plant’s comptroller in October 2008 alerting him that it was slated for closing as part of GM’s bankruptcy reorganization. The Wyoming plant, known for its relatively low cost and high productivity, paid $2.5 million in personal and city property taxes each year — about 17 percent of the city’s budget.
A stakeholders committee considered converting the nearly 92-acre site into an industrial park but decided that a better strategy was to lure one or two large manufacturers.
At its peak, the plant employed about 3,000 workers, but its workforce had declined to about 2,000 a decade ago — still one of the area’s largest employers.
Whatever company ends up locating on the site might employ 1,000, maybe 1,500, said Chris Brochert, a partner with Bloomfield Hills-based Lormax Stern, which plans to develop the site.
“We’re going to be very discriminating about the kind of business we put there,” he said.
The site already has drawn “a lot” of interest from potential buyers, Brochert said, but he declined to identify them. Its location in West Michigan between Detroit and Chicago makes it highly desirable, he said.
“A lot of people seem to think Grand Rapids is the shining star in Michigan,” Brochert said.
Lormax Stern acquired the property from Motors Liquidation Co., which was formed by GM during the bankruptcy. In July, Lormax Stern sold the property to the city of Wyoming for $1 but retained development rights.
To attract a buyer, the company and city are working with The Right Place, the Grand Rapids area’s economic development agency.
“It’s the top of my hit parade,” said Right Place President Birgit Klohs. “This is a very special site.”
What makes it special, she said, is the infrastructure, including its location next to the U.S. 131 freeway, an adjacent rail line, an electrical substation and water, sewer and natural-gas lines.
The Right Place recently hired Indianapolis-based Applied Marketing to develop an interactive video and print materials promoting the site. The property would be ideal for companies in alternative energy, aerospace and other high-tech manufacturing, Klohs said.
“There are still industries that need a substantial piece of property like this,” she said — but added, “not as many as 15 or 20 years ago. There may only be a dozen companies that would be interested. We want to find them.”
The property was grandfathered in as a brownfield site before Gov. Rick Snyder and the Legislature repealed that tax credit program at the end of 2011, Holt said. Wyoming can offer another incentive, he said.
“Because we own the property, we’re prepared to offer a deal on the site,” Holt said.
He, Klohs and Brochert agreed that it could take a few years to find a large employer suitable for the site.
“Our hope is to restore the tax base,” Holt said, “but our big hope is to restore those jobs. I’m not sure we’ll ever match the amount of taxes. I’m not sure we’ll match the number of jobs. But we’re going to try our darnedest.”