Monday, June 22, 2009

Michigan cities scramble to recycle auto plants

Louis Aguilar / The Detroit News

Plans by General Motors Corp. and Chrysler Group LLC to shutter Michigan auto plants will dump 25 million square feet of industrial land onto a struggling commercial real estate market and have sparked a race against time in communities unsure what to do with vast, vacant sites.

In addition to the loss of an estimated 10,000 factory jobs in the next two years, the host communities will lose millions in property taxes they can sorely afford to forfeit: GM already has taken steps to slash as much as 80 percent of its tax liability in some municipalities.

"If you look at the history of closed plants, it's not encouraging" said Kim Hill, director of the Automotive Communities Program at the Center for Automotive Research in Ann Arbor. "They are unique facilities. I can't give you percentages of closed plants that get reopened, but in the past, it's been small."

The combined square footage of the nine plants on the pending GM and Chrysler closure lists is larger than a dozen Great Lakes Crossing shopping malls. It's double the size of the Cedar Point amusement park, or half the footprint of Grosse Pointe Shores.

While smaller plants have been reborn as other businesses, most of the nine GM and Chrysler will mothball are far bigger and more difficult to market. GM's Willow Run transmission plant, for example, is a mile long.

The targeted auto plants, including Chrysler's Conner Avenue plant in Detroit and GM's Wyoming Metal Stamping in western Michigan, are in dense urban surroundings, and cities want them razed in order to market vacant land. But demolition and environmental cleanup are enormously expensive.

"There's really been two options in the past: Convince an automaker to utilize it, or tear it down," Hill said. More here.

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