Michigan developers find new uses for contaminated industrial sites

• Michigan’s auto legacy includes blight and contamination, particularly in manufacturing hubs like Detroit 
• Redevelopers are turning those sites around, willing to invest in sites with higher cleanup costs, with some public support  
• They say the state’s brownfield laws that allow future taxes to help fund cleanups make the investments viable

DETROIT—The old Fisher Body factory is hard to miss, and not in a good way.

Graffiti-filled, contaminated and abandoned, it is a potent symbol of urban blight for the more than 100,000 daily motorists on I-75 and I-94 on Detroit’s east side.  

Fisher Body Plant 21 once showcased the city’s thriving automotive industry, filling half a block in what’s now the Piquette Avenue Industrial Historic District that includes the first Ford Model T assembly plant.  

But that was decades ago. By 2019, when the abandoned plant turned 100, Detroit Mayor Mike Duggan was ready to demolish the six-story structure after failing to find a  buyer. His frustration was understandable. It was the kind of eyesore that destroyed neighborhoods. 

But developer Richard Hosey saw something more: 13-foot ceilings, 20-foot-wide windows and a chance to expand housing in the up-and-coming neighborhood of Milwaukee Junction, just a few blocks from Midtown.

“You can get this amazing end product that isn’t financially feasible to build anymore,” Hosey said of the building’s bones.

Hosey and partners Greg Jackson and Lewand Development Co. announced plans last year for Fisher 21 Lofts, a $134 million conversion into more than 400 apartment rentals and commercial space. Construction is expected to being next spring, with completion — and leasing — in 2026.

The group behind the project is among a small group of redevelopers willing to invest in the state’s broken buildings and dirty industrial land. They do so by leveraging a patchwork of public financing to make the project work, much of it tied to overcoming contamination on brownfield sites.  

“The scary thing is it was an auto factory,” Hosey told Bridge Michigan. Yet the financing options and state laws to encourage redevelopment of tainted sites made it possible to contemplate the building’s revival.

Putting tainted land to good use 

Michigan’s roster of contaminated properties can seem overwhelming, with 26,000 known properties, and likely plenty of others yet to be identified because the state doesn’t generally require landowners to report legacy contamination. 

For communities dealing with brownfields, hopes for redevelopment can seem bleak, since it’s often difficult or impossible to find the responsible party with the resources for cleanup.

But Michigan’s softening of polluter liability laws in the mid-1990s and subsequent brownfield financing legislation opened the door for redevelopers like Hosey to pursue new uses for contaminated old buildings, along with public subsidies to clean them up and bring them to market. 

Today, in communities across the state, local government brownfield offices are working with state environmental and economic development officials to find new industrial uses for factories the auto industry left behind in places like Detroit, Warren and Flint. 

Mixed-use projects with apartments, offices or retail are more rare, but also welcome. And lenders are now more open to financing the projects, said Brian Vosburg, director of brownfield redevelopment for the Detroit Economic Growth Corporation. 

There are several examples in metro Detroit: new industrial parks in southwest Detroit, an Amazon fulfillment center in Shelby Township, a home improvement store in Wixom.

“Ultimately what they're doing is getting that land put back into great use for the community and bringing in some major employers and creating great paying jobs,” said Vicky Rowinski, planning and economic director for Macomb County.

A funding model 

Much of the work is supported by tax increment financing (TIF), which is a way to capture future taxes to reimburse developers for the added costs of contaminated sites. The formula is based on the presumption that the first year of taxes on blighted property will be the lowest and improvements will raise its value.

“At its simplest,” Vosburg said, TIF funding “freezes the taxes at the unrenovated rate of buildings.”  

Last year, $77 million in tax-captures were authorized in Michigan under a brownfield TIF, according to the state. In the same period, the state awarded $13.5 million in grants to developers of 24 brownfield projects.

Another 51 sites were approved this year through July by the Michigan Economic Development Corporation, moves expected to generate $3.4 billion in investment and 5,000 jobs, based on funding applications. 

Advocates say TIF funding can change the fortunes of blighted communities. 

Vacant auto factories can “make neighborhoods not pleasant to live in at best, and sometimes they drive people to move,” Vosburg said. 

Everyone pays but the source 

But critics say it’s one more way for taxpayers to be stuck with the bill for pollution left behind by a powerful industry.  

Some “companies that we've subsidized and (which) leave these places a mess, we're then providing other companies subsidies to clean their mess up,” said Rep. Dylan Wegela, D-Garden City, a critic of billions of dollars in state incentives being spent to lure large-scale manufacturing to Michigan.  

That’s what’s happening with the old Buick City site in Flint. 

This spring, Ashley Capital broke ground on the first in a series of spec-built light industrial and warehouse buildings it plans for the Flint site, the state’s largest brownfield. The site was among the properties GM abandoned when it entered bankruptcy in 2009. 

Susan Harvey, Ashley Capital’s senior vice president, said she understands why some developers aren’t interested in contaminated sites. But it made sense for Ashley. 

“If you're a developer, and all you've done is greenfield sites, and there's one available, it is easier, it is faster,” Harvey said. “But once you understand the process, I think you understand the value in a brownfield development.”

When completed, the Buick City project, called the Flint Commerce Center, is expected to employ 3,000 people — a potentially massive boost for a struggling city.

But even after $31 million and counting from a federal bankruptcy trust to clear PFAS and other pollutants GM left behind, the site still needed another $15 million in public subsidies to remove underground utilities and concrete rubble. And this summer, Flint  approved $72 million in tax abatements for Ashley Capital.

On the ground

Detroit’s industrial roots mean it has more contaminated properties than most places. The state’s easing of pollution laws in the mid-1990s made it easier to transform tainted sites by allowing developers to contain pollution in the ground rather than undertaking the larger expense of removing it. 

While that move was good for developers, environmentalists contend it sacrificed the public’s right to a clean environment.

In recent years, metro Detroit’s industrial market has heated up. That provides hope for some long-forgotten factory sites, even in urban centers like Detroit. The sites already have infrastructure in place and a local workforce, noted Justin Robinson, executive vice president at the Detroit Regional Partnership, which promotes southeast Michigan development sites.

The challenge is that suppliers want to be close to where battery and assembly plants are rising. And in the past two years, Michigan has awarded incentive packages totaling more than $3.2 billion — including grant payments of $625 million — for the building of EV mega-plants on rural farmland in Marshall, Delta Township and Big Rapids.

Which makes the second life of another former auto plant — the Cadillac Stamping factory in Detroit — a happy outlier. General Motors closed the plant in the 1980s and later sold it, with the city eventually taking ownership in foreclosure. It seemed an unlikely candidate for EV redevelopment.

Missouri-based NorthPoint Development, which specializes in industrial development, paid $1.78 million for the site with plans to build a $48 million factory. The project landed a $3.3 million brownfield TIF along with a patchwork of other funding totaling over $12 million from the city, Wayne County and the Michigan Department of Environment, Great Lakes, and Energy (EGLE).

Two years ago, auto supplier Lear Corp. announced it would lease a portion of the new building to make seats for electric vehicles, later signing a deal for all of it. The move let the supplier consolidate two smaller Detroit factories into the new facility, moving about 500 workers. 

Lear made the deal because it had landed a contract with GM Factory Zero, the former Detroit-Hamtramck factory that GM converted into its first fully dedicated EV assembly plant.

“It’s a great location,” said Tim Conder, vice president of development at NorthPoint. Still, without the funding boost, “I don’t know how we could have done the stamping plant.”