Detroit seeks to withdraw public funding from Packard Plant effort

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With little progress being made on the redevelopment of the Packard plant on Detroit’s east side, the city is looking to end its public funding of the first phase of the project.

Detroit City Council is considering removing the brownfield rebate and property tax freeze from the 12-year obsolete property rehabilitation act that Fernando Palazuelo’s Arte Express Detroit LLC received for a planned $ 23 million rehabilitation from the 121,000 square foot administrative building of the historic factory.

The Standing Committee on Planning and Economic Development presented the items to the full council on Thursday for consideration, which could take place next week.

Although there was a groundbreaking ceremony in 2017 and some cleaning of the property has taken place since then, from the outside it remains pretty much what it was over four years ago. when Palazuelo launched what was supposed to be an 18-24 month build. period that would result in offices and event spaces.

An email was sent to Palazuelo and a representative for comment on Thursday morning.

Palazuelo’s tenure as steward of the giant factory designed by Albert Kahn has been marked by everything from near loss of property to foreclosure earlier this year over unpaid taxes to the collapse of the iconic bridge spanning le Grand Boulevard, from a photo shoot with wild animals that brought international attention to a lawsuit over $ 6,000 in unpaid office rent.

More recently, Palazuelo, a native of Spain who now lives in Peru, put the property up for sale in hopes that significant swathes, if not all, will be razed to make way for new construction. A previous bohemian take on apartments, shops, light industry, art galleries and dining spaces never saw the light of day.

He paid $ 405,000 for the entire plant – some 3.2 million square feet on 40 acres along East Grand Boulevard around I-94 – in 2013 at an auction Wayne County Property Tax Foreclosure.

“The tax allowance that has been granted to support the proposed project for this property is without project,” Luke Polcyn, deputy director of the group for jobs and economic growth in the administration of the Mayor Mike Duggan. “The property is for sale. We are very focused on this property. It is an extremely important asset and in some ways a liability. We are monitoring the situation closely.”

Palazuelo said the COVID-19 pandemic had severely restricted his cash flow and hampered the project.

“The economic hardships resulting from the ongoing global pandemic have created significant challenges for our businesses and made it very difficult to manage cash flow effectively,” he wrote in a February email to Crain’s.

“As you are well aware, our efforts at the Packard plant are fully funded by our operations in Lima and other parts of the world where the commercial operations of tenants of our buildings were shut down by the government last year. ”

The Detroit Free Press reported at the time that the brownfield reimbursement amounted to $ 5.4 million.

The OPRA’s property tax freeze is estimated at $ 3 million.

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