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Former American Motors Corp. headquarters in Detroit set for $66 million redevelopment

A developer growing its industrial presence in Detroit plans to demolish the former American Motors Corp. headquarters site for a new development, likely for an automotive supplier, officials said.  Detroit Mayor Mike Duggan and other officials announced the $66 million redevelopment Thursday morning at the 2-million-square-foot abandoned AMC campus.  AMC took its headquarters to Southfield in 1975. Operations at the facility at 14250 Plymouth Road closed in 2010.

Kansas City, Mo.-based NorthPoint Development LLC will raze the AMC buildings and construct a 728,000-square-foot industrial facility, pending City Council and other approvals.  It’s NorthPoint’s second supplier development in the city after a Lear Corp. seating supply factory on the site of the now-demolished Cadillac Stamping Plant on the east side.

Progress on the long-vacant AMC site — which nearby residents described as a pillar of the neighborhood when it was open, after being built in 1927 — has been a long time coming, Duggan said Thursday.

“This has been nothing but an eyesore and a drain on the neighborhood,” the mayor said. “This building is just not usable. And when I came in, we looked at it and it was going to cost $10 million to demolish it and clean up the site, and coming out of bankruptcy, we couldn’t really justify laying out $10 million on one site.”

While a specific tenant hasn’t been disclosed, the site could employ 300 or more people, officials said. They expect 150-200 workers for construction.

Under a deal with the city, NorthPoint would buy 56 acres of land for $5.9 million. That figure includes not just the city-owned AMC site, but also 26 residential parcels owned by the Detroit Land Bank Authority and a Detroit Brownfield Redevelopment Authority-owned property next door that’s 8.5 acres. The developer’s $66 million investment includes the cost to demolish the buildings.

“The thing they wanted was, they wanted a big enough site to make it worthwhile, which is why (the city) had to put all these different parcels together,” Duggan said.

The mayor teased this plan during his re-election speech Nov. 2, saying that the site would get attention soon as part of his goals for his third term.

“… And we are going to move over to the west side for that long-abandoned AMC headquarters on Plymouth, we are going to redevelop that property,” as well as the infamously blighted Packard Plant, he said at his victory party.

NorthPoint will also seek brownfield tax incentives for environmental remediation work on the property, as well as likely other tax breaks. Those would need to be approved by City Council and other entities, as well as the land sales.

Depending on timing for those potential green lights, NorthPoint could start tearing down late next year and then break ground in mid-2023, with an estimated opening by early 2024.

“My goal is to make Detroit one of the top industrial markets in the country,” said Tim Conder, vice president of acquisitions for NorthPoint. “Why Detroit? The market fundamentals for Detroit are outstanding. … There’s a lack of Class A (Industrial Space) product here within the city. Most important, this is where the industry is. … secondly, Detroit has a highly skilled labor force that’s available (unlike other areas).”

NorthPoint is among the most active industrial developers in Southeast Michigan. It has at least 3 million square feet of space in varying stages of the development process across the region, including the $48 million, 684,000-square-foot project for Lear; the Eastland Center shopping mall in Harper Woods; a three-building Shelby Township warehouse or industrial development of around 1.04 million square feet; and a three-building development on the former Warren Transmission Plant site that would be 1.86 million square feet.

NorthPoint also in October bought two properties near the Packard Plant at the Wayne County tax-foreclosure auction — a move that suggests the developer may not be giving up on the building around the sprawling and troubled plant, even though a reported deal between the developer and the plant’s owner collapsed.

Duggan on Thursday prodded Conder about the Packard Plant site.

“… Tim Conder, I told him once he does the AMC thing we’re going to talk about the Packard Plant. He said he doesn’t think that’s a good deal, but we’re going to keep working on him,” Duggan said.

With the AMC project’s proposed price tag, if it is approved as is and does receive tax breaks, it will not require a community benefits agreement. The city’s Community Benefits Ordinance requires real estate developments with public buy-in costing $75 million or more, or tier 1 projects, to make certain commitments to mitigate negative impacts on neighbors. Northpoint’s project falls under that threshold. It qualifies instead as a tier 2 project, so all it’s required to do under the same ordinance is to vaguely “partner” with the city as it goes about its work.

NorthPoint is expected to help the city improve nearby park Mallett Playfield and build a green beltline on the east side of the site. The developer also plans landscaping and berms.

The Rev. Cynthia Lowe, a founding minister of nearby Unity Outreach of Detroit who moved to the area in the 1970s, said that while she’s been speaking against another plant proposed in District 7 — an asphalt mixing facility at I-96 and the Southfield Freeway — she’s in favor of this project.

Lowe, also president of Paved Way Block Club, described the “nightmare” of watching the “beautiful” AMC headquarters devolve into a dumping ground over the years.

She added that she doesn’t see NorthPoint’s work as harmful to the community, pollution-wise, like the asphalt facility. She also pointed to the developer’s park and landscaping plans.

Lowe said she wishes NorthPoint could have saved the AMC building’s tower, but “you can’t have everything.” She believes the mayor and District 7 Councilman Fred Durhal will keep NorthPoint to its word, she added.

“We don’t mind businesses coming in, but it has to be an asset to the community,” Lowe said.

Posted By: Crain’s Detroit Business on December 9, 2021.  For more information, please click here to read the source article.

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