The abandoned Packard Motor Car plant may be coming back to life thanks to a developer from Peru who has high hopes for the structure. The 58-year-old developer has a history similar to the commercial property, giving him a unique edge in its development. The man made a successful living by buying up old buildings in Spain and converting them into apartments and art galleries, but he ended up having to file bankruptcy after the 2008 recession and a divorce. He got a fresh start by moving to Lima, Peru, where there was a great deal of cheap, empty properties.
The man read about Detroit’s bankruptcy and financial woes in a local newspaper in July of 2013 and decided to buy the Packard plant. Two other buyers had put in bids on the property in the past, but the 58-year-old developer was the first to actually close the deal. He became the official owner of the site on Dec. 31 and bought the 40-acre property for $405,000. The man estimates that the transformation of the property will cost a total of $350 million spread out over the next 10 years.
His initial plans include building an apartment for himself and corporate office on the site and cleaning the plant up section by section. After that, he will start getting a feel for which of the prospective tenants are serious about occupying the plant. Current possibilities include a local liquor distillery, an indoor go-kart track and an auto supplier.
Turning the abandoned structure around will be no easy task, however. The plant is currently covered in graffiti and trash and is a popular spot for criminal activity and those looking to capitalize on the scrap metal. One of the first concerns the developer has to address is public safety. He has begun talks with officials to improve the lighting and streets around the plant and has hired private security guards to ensure the grounds are patrolled.
Whether or not tenants will actually be willing to move into the plant remains to be seen, but the increased interest that developers are showing in revitalizing Detroit’s abandoned structures is promising for the commercial real estate market and area investors.
Source: The New York Times, “Developer From Peru Has Eye on Detroit” Bill Vlasic, Feb. 04, 2014