BY MELANIE YOUNG
Trenton’s city administrators and elected officials have spent the better part of 2017 working on arguably the biggest land deal in the Downriver area for many years. The foreclosure and sale of the former McLouth Steel property has drawn the interest of people from all across southeastern Michigan.
How did we get here? The Wayne County Treasurer set the most recent events into motion by foreclosing on the property back on March 31 of this year. The owner, DSC LLC Trenton Land Holdings, owed $3.7 million in property taxes dating back several years. The company had owned the site since 1996.
McLouth Steel was founded in Detroit in 1934. In 1948, the company purchased the mile-long property located on the Detroit River as part of a $100 million expansion project. In its heyday, the company employed more than 6,000 people. The company filed for bankruptcy in 1981 and again in 1995, which led to the eventual sale to DSC, then known as Detroit Steel Co.
DSC owner Michael Wilkinson tried several times to redevelop the property, including a 2006 proposal to turn the property into a mixed-use residential and commercial development. He also proposed a $200 million site renovation in order to produce steel again. Both proposals failed and in 2009, the electric superstructure was removed from the site. Since then, the only use the site has seen have been storage and unauthorized use for music videos and photographers.
Fast forward to 2017. Once the county treasurer took possession of the property, a process bound by statutory laws began. By law, the state of Michigan had the first opportunity to purchase the property and had until May 13 to exercise its right of first refusal. The state chose not to purchase the property. The city of Trenton had the next right of refusal. On July 12, the city held a town hall meeting to inform the public about the discussions. On July 17, the Trenton City Council voted to its option to purchase the property, citing the costs and uncertainty about the environmental issues at the site.
Meanwhile, earlier in the process, Wayne County had sent out a RFQ, or request for quotation, on the property. Four companies submitted proposals. Of the four, only two companies submitted bids that included full payment of back taxes. Of those two, Crown Enterprises was selected unanimously by the Trenton City Council, and approved by the Wayne County Treasurer, according to Wayne County documents. On July 24, the City Council sent a letter to the Wayne County Commission, voicing its support for the deal between Wayne County and Crown.
On Sept. 27, the Wayne County Commission addressed the issue at its monthly Committee of the Whole work study session. A resolution was put forth requesting the body’s approval of a resolution that would allow Wayne County to exercise its right of refusal to purchase the McLouth property, in order to transfer the property to the Wayne County Land Bank and allow Crown Enterprises, Inc. to purchase, rehabilitate and develop the property. The committee moved the issue forward to the entire commission.
The Wayne County Commission voted and approved the proposal by a vote of 11-3 on Sept. 28. Commissioner Joe Palamara, a Grosse Ile resident whose district also includes Trenton, abstained from the vote due to his affiliation with a lobbying firm that has done work for Crown. While that has drawn criticism from many, Trenton mayor Kyle Stack praised Palamara’s involvement in helping the purchase go through.
“We have worked diligently on this with our partners, including Joe Palamara, Michigan Department of Environmental Quality, Wayne County Economic Development Corp., Wayne County Treasurer and staff, EPA, and Wayne County Executive Warren Evans and staff, among others,” said Stack.
When the name of the purchaser was made public, many local residents and even some County officials were skeptical. Crown Enterprises is one of developer Manny Moroun’s companies and, warranted or not, his reputation in the area is less than stellar. According to Crown Industries President Michael Samhat, some criticism is warranted, but those issues have been addressed. He wants Trenton residents to be hopeful.
Crown Industries is a privately owned real estate and development firm based out of Warren. It employs 1,000 Wayne County residents and boasts 3.9 million square feet of facilities support for logistics companies and auto manufacturers in Wayne County.
According to company provided documents, Crown has five decades of experience in turnkey commerce and real estate development. The company operates as landlord and manager of the properties they develop in the United States and Canada. It is landlord to hundreds of companies, many that are publicly traded.
Samhat stated that properties like McLouth that are built for a single purpose can take a long time to repurpose, but the company is capable of doing it.
“We are very experienced with industrial properties. We are serious about the site and its development. Our agreement with the county shows that,” said Samhat.
Crown Industries intends to use the property to develop an intermodal transportation-type logistics facility to support rail, shipping, and truck transportation and logistics. The agreement with the county includes stipulations including payment of $4 million, which the county has already received. Those funds will be split between the city of Trenton, the Riverview School District and Wayne County in payment for tax monies lost. As part of the agreement, the buildings on the site must be demolished in the next 24 months.
The company is also required to invest $20 million into the site within 72 months or pay a $1 million fine to the Wayne County Land Bank. There is also a stipulation that there will be no storage or distribution of hazardous products such as asbestos or petroleum or petroleum products, such as pet coke, on the site. Pet coke is a toxic by product of petroleum refining. Samhat is confident his company is capable of living up to the agreement.
“We will live up to our commitment and hopefully exceed it.”
The company also reportedly is in discussion with the U.S. Environmental Protection Agency to come to an agreement on the level of environmental remediation needed at the site. The finalization of the sale is dependent on Crown convincing the EPA that it is willing to commit the funds needed to satisfy its concerns.
Many times, over the past several months, Trenton City Councilman Robert Howey voiced his desire for this entire process to remain transparent to the residents of Trenton. That was not always possible, as the City Council was under a gag order by Wayne County since its July refusal to purchase the property.
“This whole process has been very unusual,” Howey said. He stated that the McLouth site is very complicated due to the environmental cleanup and railroad easement. “We felt that Crown was the most favorable because their agreement includes clauses that there can be no hazardous material or trash stored at the site.”
Howey was concerned that if the site went to public auction, which was the next step, that there could be no restrictions on what could be done with the property. Going forward, he pledges transparency.
“I have proposed that we have quarterly updates from Wayne County and Crown Enterprises at our council meetings.” Howey said, adding that Samhat has agreed.
As of mid-October, Trenton officials had not received their share of the tax reimbursement. According to Mayor Stack, the council has yet to decide what to do with the $1.4 million coming to the city. Crown Enterprises has until Dec. 15 to close on the property, as elected officials and residents alike await the dawn of a new day on the blighted property.