A public-private partnership didn't settle for any "type" of tenant to inhabit a former GM auto plant. Doing their homework, the team systematically pinpointed manufacturing as the optimal end use. Now all they need is the tenant to emerge.

When General Motors announced its intention to close the 2 million-square-foot stamping plant in Wyoming, Mich some community members wanted to see outdoor retail powerhouse Cabela's move into the location, which claims prime footage along one of the major north-south arteries in the greater Grand Rapids area. Others looked for a Sam's Club, Costco or similar big box store. Still others pointed to nearby Kalamazoo, where another shuttered GM stamping plant had been successfully subdivided into space for warehousing, logistics and light manufacturing operations.

But Wyoming City Manager Curtis Holt and economic development juggernaut Birgit Klohs had other plans.

Klohs, who is the president and CEO of The Right Place Program, realized that these ideas would effectively waste one of the largest – and best – tracts of urban property in the region. Its superb location, size and infrastructure made it an attractive site for advanced manufacturing. Holt had made it his mission to replace the 3,000-plus jobs lost when GM closed its doors with positions that paid good wages and benefits, and that automatically eliminated retail or warehousing.

"Once the plant is demolished and the site remediated, the location will be perfect for one or perhaps two very large advanced manufacturing plants," Holt said. "There are tremendous assets already in place. From the roads and the rail line to the water, sewer and power, this site comes fully loaded and is ready to go, which will cut redevelopment costs significantly.

"Add to that the quality level of workforce already in the community and the willingness of the city of Wyoming to step forward with incentives, and this is an amazing opportunity. We have worked hard to put all the pieces together and to cooperate with all the players involved to redevelop the site and bring new jobs to the community."

It's a process that Holt refers to as "densifying." Rather than sprawling out at the edge of urban centers, redevelopment of the property allows Wyoming to continue the manufacturing density of the area by replacing the obsolete stamping plant with one or two "big fish," as Holt refers to them. Holt, Klohs and other community stakeholders in West Michigan committed themselves to the vision of advanced manufacturing on this parcel.

Cooperation Name of Game

Fast-forward 26 months and enter Lormax Stern Development Co. The Detroit-based firm was the successful bidder for the former GM stamping plant site in a Motors Liquidation Co. auction. The sale is one of the first successful dispositions of GM facilities after the automaker reorganized in 2009 under bankruptcy protection.

Wyoming and Lormax Stern have established a joint public-private partnership for this project. Lormax Stern will serve as the city's development partner, handling the demolition, site preparation and leasing. Wyoming will pay Lormax Stern $1 for the parcel in exchange for an improved site and control over the redevelopment process. Lormax Stern will receive any recoverable income from demolition and recycling, as well as proceeds from the long-term lease. The Right Place is on board to market the site and identify the right tenant.

Lormax Stern brings a successful track record in retail to the project, which Chris Brochert says makes his company the perfect fit for this partnership.

"Industrial development is really very similar to that of retail," said Brochert, a partner at Lormax Stern. "In manufacturing, have a site-specific plan to accommodate a one-story building with many of the same components that you need for retail: Parking lots, gutters, sewers, etc. You identify a renter and sign a lease for a long period of time that will enable you to secure long-term financing. In the end, the only difference is the user.

"Our firm is looking for and actively pursuing alternative investments aside from shopping centers. We were looking at a number of locations in the Midwest, and we were successful in securing this property because of our willingness to work with the city of Wyoming. We understand what the city wanted, and we agreed with the city that we would work within their parameters.

"Our goal is to diversify our assets and broaden our portfolio. Curtis and his team are looking for advanced manufacturing that will allow the creation of good-paying jobs for the community. Birgit and her team have the contacts, the know-how and the skill to market this parcel nationally and internationally. Cooperation is really the name of the game."

Curtis Holt, city manager of Wyoming, Mich. (wearing vest) and Birgit Klohs, president and CEO of The Right Place, proved to have the right stuff in forging an effective public/private partnership to pinpoint end-use at the former GM stamping plant.

Next Steps: Demolition, Remediation

Demolition of the facility, which was built in 1936, was do to being as soon as May. Lormax Stern has already cleared a number of administrative hurdles to move forward with the project, including:

• Establishing a separate subsidiary, Thunder Ventures LLC, to handle the redevelopment and signing a five-year development agreement with the city;
• Agreeing to a brownfield plan amendment, which will establish a separate designation for the parcel and allow the project to seek $11 million in tax credits from the state;
• Establishing a demolition site plan, which will clear the way for Thunder Venture to demolish the existing buildings, recycle the materials as appropriate and prepare the site for its new facility.

Funds for the environmental remediation of everything below the surface of the plant will come from a special trust established in the General Motors bankruptcy settlement. The RACER Trust or Revitalizing Auto Communities Environmental Response set aside funding to clean up 60 former GM sites that, like the Wyoming stamping plant, are known to be contaminated. In the case of Wyoming, the RACER Trust will be responsible for addressing contaminated soils and groundwater.

While considered well maintained, the plant like most industrial sites of similar age offers an array of environmental challenges. An initial Phase 1 assessment of the site has identified a number of recognized environmental conditions, including:

• Soils that have been impacted by a variety of chlorinated volatile organic compounds (VOCs), polycyclic aromatic hydrocarbons and metals associated with metal manufacturing operations, and groundwater that also contains chlorinated VOCs and polycyclic aromatic hydrocarbon;
• Asbestos in flooring, insulation, window glazing and calk, fire doors and other parts of the plant, and universal wastes such as fluorescent and high-intensity light bulbs, smoke detectors and other devices containing small amounts of radioactive material, mercury and refrigerants;
• Residual oils and chemicals in and out of containers throughout the plant, as well as PCBs exceeding applicable regulatory standards.

Manufacturing tenant sought

Once begun, the cleanup is expected to take 14 to18 months. Brochert said Lormax Stern has contracted with New York-based DEMCO, an experienced decommissioning and environmental management company to handle the project.

"We don't see any major challenges ahead," Brochert said. "The city has been great to work with. We came to a redevelopment agreement without any indigestion. Right now, the biggest challenge we have is finding the right user. That's where The Right Place comes in, and we are confident they will be instrumental in this process."

Curtis Holt credits the common goal of utilizing the property to its highest and best advantage to the smoothness of the process and the success that Wyoming has enjoyed with the project to date.

"It makes perfect sense to redevelop this prime piece of industrial real estate for advanced manufacturing," Holt concluded. "Sure, we have green fields available in our community where we can easily build new sites. But as we continue to build on the fringes of our urban centers, we will add to sprawl by adding roads, utilities and other infrastructure to support this growth.

"We will also increase the cost of government by adding fire, police and other support services necessary. Redeveloping the site with the same purpose will allow us to utilize this asset the way it should be."

Mary Ann Sabo is principal with Sabo Public Relations, Grand Rapids, Mich., and a former writer/reporter with several daily newspapers. She can be reached at 616/247-0935 or via email at maryann@sabo-pr.com