Lenawee County officials spent $2.3 million to purchase 57 acres of land with industrial buildings that was assessed for $370,000.
Because the land in Lenawee’s Tecumseh is a former industrial site, the potential cost of an environmental cleanup and building demolition would potentially render the property without any recognizable value and could even cost any potential buyer more than $1 million to fully remediate.
“The appraisers were informed that the previous property owner, Tecumseh Products Company (TPC), is the party responsible for contaminated soil, groundwater, and soil vapor at the former TPC Facility,” according to the appraisal conducted by the Gerald Alcock Company, LLC and sent to Lenawee County Administrator Kimberly Murphy last month.
The appraisal continues, saying TPC “addressed certain environmental obligations by placing a restrictive covenant on the deed recorded September 27, 2016, and prohibiting use or occupancy of the building unless institutional and engineering controls were installed.”
Lenawee County purchased the property for the purpose of building the Phoenix Center, a proposed $90 million sports complex. That plan was scuttled in July by recently elected commissioners by a 6-3 vote.
One of the newly elected commissioners who voted against pursuing the Phoenix Center project was Kevon Martis, who told The Midwesterner: “If you read through the entire appraisal, you’ll realize that if you add in the cost of the environmental cleanup the value, it is as I predicted: sharply negative to the tune of probably seven figures.”
David Stimpson, chair of the Lenawee County Commission, championed Project Phoenix. According to Michigan Capitol Confidential, Stimpson publicly stated he would not personally benefit from the county’s purchase of the property, yet his U.S. Department of Commerce filings state he and two companies he owned would benefit. Stimpson bought the investment properties in November 2021, one month after he voted to purchase the TPC property.
“The real story is why didn’t we get an appraisal before we bought it almost two years ago,” Martis said. “Here we sit with a mess I suspect we will own for the next 20 years. Old industrial properties are white elephants and there’s a reason nobody buys them, which is they have no value,” he said.
Besides the contamination of the property, Martis noted the former TPC buildings are “much more a tool than a building.” He explained industrial buildings are “built to house a particular process in a particular fashion and so when you have a building that’s built around a certain process then you have to find a buyer whose process needs to fit that,” he said.
“It’s not just square footage,” Martis continued, saying potential buyers would seek specific building features such as loading docks, overhead cranes, and power sources.
“A building like this has been occupied for decades and decades and decades and it has Environmental Protection Agency pollution issues and 14 acres of concrete that could only be removed at a massive cost, which is not factored into the appraisal.”
Martis said the TPC property has “languished for years” and the previous owner, Jason Miller, benefited from a $1 million grant and $1 million loan made available to the City of Tecumseh for site clean up.
“We ended up paying $2.3 million for something that’s worth 25% of that or far less,” he said. “The board was not given good information and was led to believe that we had to hurry up or we were in trouble. The real cost is what’s it’s going to take to convert this to something useful. I mean there’s a reason these huge industrial properties sell so darn cheap, right, because they’re undesirable [and] most of them are brownfield.”
Martis also opined on what motivates people to buy these properties: “[People think] If I can buy 57 acres and this huge building cheaply, there’s got to be some way I can make money. Nope, no there’s not, unless you sell it to an entity like the county, the only entity foolish enough to buy it.”