A former owner of the Packard Plant in Detroit may stall the redevelopment of the property. The new owner, a developer from Peru, bought the 40-acre plant for $405,000 last fall at a foreclosure auction. The developer was planning on leasing the property out to several tenants after completing $300 million to $400 million in redevelopment.

Now, however, the 54-year-old former owner of the plant is claiming that the Peruvian developer doesn’t actually own the plant and says that he and several others still have a claim to some of the parcels on the site. The former owner says that Wayne County did not give proper notice of the foreclosure, although the chief deputy treasurer says that the county complied with all notification procedures.

The former owner has offered to make sure that he and the other undisclosed people who reportedly have claims to the parcels give up ownership, but he’s asking a reported $3.5 million to make it happen. The new developer told reporters that he won’t pay that much — calling it blackmail — but his attorney said they may be willing to pay a smaller sum, depending on what the former owner is promising.

Even if the issue of the alleged claims is resolved, the Peruvian developer may still face problems. It appears that the developer’s purchase did not include one parcel on the plant site that just happens to include the brick bridge over East Grand Boulevard. The developer is currently in talks with the city to buy that parcel as well.

Real estate transaction disputes like this one can happen when buyers aren’t completely clear on what they are getting or there is a breakdown in the foreclosure notification process. With the city needing as much as it can get in the way of new development, hopefully this situation will be resolved quickly so the redevelopment plans can move ahead.

Source: Detroit Free Press, “Packard Plant’s ex-owner claims he still holds title; Peru developer cries ‘blackmail'” JC Reindl, Mar. 05, 2014