Willow Run Deal Near an Already Time-Intensive Business
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Jennifer Lord and Rick Berg are two of 14 attorneys highlighted in The Litigators, a special report on recent major court action around Michigan, Page 9 JULY 25 - 31, 2016 Bene ts ordinances disturb developers Some fear proposals would take control of or delay projects By Kirk Pinho those with investments of at least [email protected] $15 million or $75 million, depend- Virtually all real estate projects of ing on the proposal — language in note in Detroit involving a public both specifi cally addresses projects contribution of land or tax incen- $3 million or more, which would tives would be affected by either of greatly expand the number of proj- the proposed community benefi ts ects affected. ordinances making waves in the de- While there are signifi cantly less velopment community in recent stringent requirements attached to weeks that appear bound for the those so-called “tier-two” projects, November ballot. defi ned as being between $3 million The proposals would require de- and $14,999,999 in one of the pro- velopers to incorporate certain so- posals and $3 million to $74,999,999 MICHIGAN ECONOMIC DEVELOPMENT CORP.; BLOOMBERG (RIGHT) called community benefi ts, such as million in the other, real estate ex- A conceptual rendering shows the planned American Center for jobs, local hiring and environmen- perts say the effect on efforts to de- Mobility at Willow Run, a former World War II bomber factory tal protections, in projects of a cer- velop and redevelop property in that sits mostly vacant today (inset), awaiting development. tain size if they receive public fund- Detroit would be chilling. ing or city-owned land. Some of the Mike Ferlito, project developer proposed provisions are making the for Detroit-based Ferlito Group LLC, development community leery says his planned $4.5 million proj- about things like too much control ect, The Selden, at Selden Street just of real estate projects and delays in west of Cass Avenue in Midtown, Willow Run deal near an already time-intensive business. could experience delays and unrea- While much of the discussion has sonable requirements under the Sale could close by next summer; developers seek funding for mobility test hub centered on what are formally re- proposed ordinances. ferred to as "tier-one" projects — SEE INCENTIVES, PAGE 16 By Lindsay VanHulle provals, the specifi c conditions portation, energy and commerce Crain’s Detroit Business/Bridge Magazine required for closing are unknown: departments for funding. That The sale of more than 300 acres The Michigan Economic Develop- likely could include multiple re- at a former World War II bomber ment Corp., which has an owner- quests in the form of grants or factory in Washtenaw County for ship stake in budget allocations, either from Bill would dim electricity use as a testing hub for connected the project and the executive branch or Congress, and driverless cars could close by is helping to Maddox told Crain’s at the Detroit next summer, said those involved negotiate the Regional Chamber Mackinac Policy choice in state, some say with the purchase. transaction, Conference in June. Yet even as developers of the would not re- The MEDC has committed $3 By Jay Greene planned American Center for Mobil- lease the pur- million to the Arsenal of Democ- [email protected] Facts of energy choice ity at Willow Run in Ypsilanti chase agree- racy landholding entity for the Only two of 10 active alterna- The current electric choice law Township move ahead with buy- ment publicly property purchase and startup tive-energy suppliers in Michigan allows customers to purchase ing property, signifi cant hurdles nor share the costs. Maddox’s team is seeking could qualify to serve electricity competitively priced electricity from remain to clear — namely, fund- terms, citing an additional $17 million from the customers in the state’s 10 percent alternative energy suppliers. That ing — before the estimated $80 John Maddox: confidentiality agency’s Michigan Strategic Fund, choice program under legislation market is capped at 10 percent of CEO says mobility million facility can open. agreements. though a spokeswoman did not sponsored by Sen. Mike Nofs, R-Bat- electric sales. News last week that the center’s center is targeting The Ameri- know when the project will come tle Creek, unless they make major That choice market now has property acquisition entity, Willow federal funding. can Center for back before the board. investments that would likely make 6,140 customers using 1,964 Run Arsenal of Democracy Land- Mobility proj- An MEDC staff memo from the business unprofi table. megawatts of power, mostly large holdings LLP, has agreed to pay ect is pegged to need about March said developers planned to At issue are provisions in the bill businesses such as Dow Corning $1.2 million for the 311-acre Wil- $60 million from the federal gov- return with the remaining fund- that would require the suppliers to and U.S. Steel, as well as about 200 low Run site is a milestone for ernment. CEO John Maddox ing request should the property “own or have under contractual school districts. supporters of the mobility project, would not comment last week on purchase happen “as anticipat- rights” at least 90 percent of the which has an expected opening the status of fundraising, saying: ed.” That request also would re- electric capacity within Michigan to The 10 percent cap means more date of 2018. “A lot (is) up in the air.” quire an operational budget and a meet peak demand in the competi- than 11,000 customers, mostly Beyond standard due diligence, He has said, however, that his site plan for development, the tive market by Oct. 1, 2018, and ev- businesses, are on a waiting list to including inspections and ap- team is targeting the U.S. trans- agency wrote, along with a recom- ery year after. get into the choice program. If those mended payback schedule for the The two alternative-energy sup- customers were allowed to buy power in the choice program, they © Entire contents copyright 2016 state investment. pliers that do generate enough pow- by Crain Communications Inc. All rights reserved The MEDC said then that state er in Michigan to meet the proposed would account for about 25 percent crainsdetroit.com Vol. 32 No 30 $2 a copy. $59 a year. funding would be used “as lever- requirement are Cadillac-based of electric sales in the state. age to fi nalize federal invest- Wolverine Power Marketing Coopera- ment.” tive Inc. and Jackson-based CMS ERM Nofs’ Senate Bill 437 is approved this The MEDC and Revitalizing MI, a CMS Energy Co. alternative-en- year and signed into law by Gov. Auto Communities Environmental ergy supplier affi liate. Rick Snyder. If they do, thousands of Response Trust, or RACER Trust — Spokespersons for several other energy choice customers, including the trust handling cleanup and alternative-energy suppliers say 200 school districts, could see elec- NEWSPAPER redevelopment of former General they may be forced to shut down tricity costs rise as they lose access SEE MOBILITY, PAGE 15 operations by 2018 in Michigan if SEE ENERGY, PAGE 17 2 CRAIN’S DETROIT BUSINESS // JULY 25, 2016 agriculture, specialty products and and follow-up education at the Ada- MICHIGAN materials science. based company will be done by In- INSIDE terleukin Genetics Inc., a Massachu- THIS ISSUE .........................................14 setts life sciences company in which CALENDAR MICH-CELLANEOUS CLASSIFIED ADS ...............................15 n Michigan’s jobless rate dipped Amway’s parent, Alticor, has a stake. DEALS & DETAILS .............................14 to 4.6 percent in June, a slight drop n A bidding war among six buy- KEITH CRAIN.......................................6 from May but the lowest in 15 years, ers drove up the price of a foreclosed MARY KRAMER .................................. 7 AP reported. The state said it was the Caledonia Township shopping cen- OPINION ..............................................6 BRIEFS second consecutive monthly decline ter, and the bank collected more PEOPLE ...............................................14 Enbridge reaches $176M ago, a U.S. Department of Justice offi- and the fourth this year. Michigan’s than the $2.3 million value assigned RUMBLINGS .......................................19 settlement over oil spill cial said. The settlement adds to the labor force has grown by 101,000, or to the 11-year-old Glen Valley Center, WEEK ON THE WEB ..........................19 expense of $1.2 billion that Enbridge 2.1 percent, since June 2015. according to Colliers West Michigan, Enbridge Energy Partners reached has incurred for the spill near Mar- n New York City-based invest- which represented the property own- a $176 million settlement for the shall, which oozed into Talmadge ment bank Oppenheimer & Co. Inc. er in the sale. Six offers on a property COMPANY INDEX: costliest inland oil spill in U.S. histo- Creek and then the Kalamazoo River. will pay $900,000 in fines to the state is unusual but reflects demand for SEE PAGE 17 ry — a pipeline rupture in Michigan for failing to register its investment flourishing retail developments, said that polluted a nearly 40-mile Dow, DuPont shareholders advisers working in Michigan. The a Colliers retail adviser, who declined tion of the Flint Cultural Center Corp., stretch of the Kalamazoo River, fed- Michigan Department of Licensing and to provide the owner’s name or the toward renovation and restoration eral officials said. The agreement approve companies’ merger Regulatory Aairs said it reached a sale price, MLive.com reported. of the city’s historic Capitol Theatre, between U.S. government agencies Shareholders of Midland-based consent agreement with Oppen- n Michael Price, founding presi- AP reported. Organizers hope to and the Canadian company con- Dow Chemical Co.