The developer asked Detroit for a 30-day time extension on its bid for the property to complete a full investigation. The purchase agreement was to be signed Feb. 15.
However, Kojaian management executive vice president Tony Antone tells GlobeSt.com the city refused a time extension and returned a $5-million deposit.
Detroit has owned the three neighboring parcels along Five Mile Road between Napier and Beck roads for the building of prison land, and one was the former site of the Detroit House of Corrections farm. Just factoring in the wetland issue, the company has determined that of the 868.6 total acres, only 451.1 acres are developable, 190.7 acresare considered developable with restrictions and 226.8 acres are considered undevelopable.
Antone tells GlobeSt.com that coupled with the amount of possible contaminated sites on the land, the property is not worth the $50 million the company had agreed to pay Detroit.
"We didn't know anything about these problems, and I don't think Detroit did either. I doubt if anyone from the city ever stepped foot on the property," he adds.
The property consists of 461 acres in Northville Township and 427 acres in Plymouth Township. Detroit officials had voted to sell the land for $50 million in order to help balance the city's budget. A joint venture of Kojaian Management Corp. and Lehman Bros. bid $57,000 an acre for the property.
The developer provided copies of two investigative reports on the property to prove there are problems on the site. The reports say that:
* Past use of the site includes fruit orchards, which could have resulted in pesticide use.
* Groundwater from the Onyx Ann Arbor Hills Landfill, located immediately west/northwest of the property, has been shown to have flowed onto the property.
* A firearm range is on the property, which could have produced lead contamination.
* Several areas of surface dumping, leaking underground storage tanks and oil and gas wells have been identified on the site.
City officials could not be reached for comment.
The land is zoned for industrial and research and development in both townships.
Two women's prisons already exist nearby, the Western Wayne Correctional Facility and the Scott Correctional Facility, both owned and run by the state.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
