Flint, MI—Though news of a potential buyer for Buick City has been met with a healthy amount of skepticism from locals, the parties involved in the deal say they are optimistic for a positive outcome.
“Buyers better take good hard look!” posted one Facebook user in response to an announcement that Ashley Capital, a New York-based real estate investment group, had entered negotiations to purchase the remainder of the former General Motors site from Revitalizing Auto Communities Environmental Response Trust (RACER).
“That entire site is hot,” posted another user to the same “MEMORIES OF FLINT and surrounding areas” group. “It’ll never be clean for a long, long time.”
RACER was created in March 2011 by the U.S. Bankruptcy Court and tasked with cleaning up and positioning former GM properties for redevelopment after the auto-manufacturer’s 2009 bankruptcy.
At the time RACER acquired Buick City, a sprawling 413 acre GM manufacturing site that shut down gradually from 1999-2010, it also took over more than 80 other locations across 14 states.
“We assumed the Buick City property, along with all these others, on March 31, 2011, and we went right to work in addressing environmental issues,” said Bruce Rasher, RACER Redevelopment Manager.
Since then, Rasher said, the trust has completed over 90 transactions, sold “all but a few” of the 160 buildings that were part of that handover, and contributed to $1.2 billion in labor income in Michigan alone.
Rasher said that RACER is obligated to complete clean ups on its properties and does so under the oversight of a lead agency, which is either the United States Environmental Protection Agency or a state’s regulatory agency, depending on the site.
In the case of Buick City, the lead agency began as the EPA, but is now the Michigan Department of Environment, Great Lakes, and Energy (EGLE).
“We work in very close cooperation with all of our regulators,” Rasher said in response to the environmental concerns of Flint residents. “So we have achieved a great deal of success in addressing the legacy environmental issues at these properties.”
Rasher also noted that RACER is practiced in continuing remediation throughout and after a property’s sale if needed, and said that despite initial reports, the deal on the table for Ashley Capital actually withholds part of Buick City’s more than 350 vacant acres while RACER completes that work.
“About 60 acres of the remainder has ongoing environmental remediation,” Rasher said. “As we sit here today, we’re not ready to close with Ashley on that. So, technically, we’ve given them the exclusive right to buy it when we are.”
Rasher said he was not surprised to hear of residents’ concerns in response to the Buick City deal announcement, citing a prior public deal for the site with the Mahindra Group, a vehicle manufacturer based in India.
That agreement fell through over the course of the COVID-19 pandemic.
Rasher said that happened in part because of a specific vehicle production contract Mahindra had hoped to win as well as the global economic factors that affected many property sales during the pandemic.
“It’s no wonder that anyone would be skeptical when it’s announced that a new buyer has come along,” Rasher said. “But again, we have the right counterpart in Ashley Capital.”
Ashley Capital has worked with RACER successfully in the past, and Senior Vice President Susan Harvey said that was part of the reason the investment group entered negotiations for the Buick City site.
“They know what they’re doing, and we’ve dealt with them before,” Harvey said of RACER, from whom the group previously purchased a Livonia, Mich. site that now hosts an Amazon Distribution Center. “I have full faith that they are going to put this site in exactly the condition we need to build on it.”
As far as what Ashley Capital will build in Flint, that is yet to be determined. But, Harvey said, she believes Buick City would be “a really great location for an industrial park.”
“The potential is there for about 3.6 million square feet,” Harvey said. “That would be over a number of years, in multiple buildings, and we would only build based on demand.”
Harvey said what sets her group apart from other potential developers is that Ashley Capital builds speculatively.
“And that has been our success story,” she said. “Just about everything we’ve ever done has been ‘on spec’—meaning we did not have a user in place when we actually started construction.”
Therefore, should the deal go through, Harvey said Flint residents can expect to see the site developed building by building, with each space leased before starting on the next building.
“We would just go one at a time to make sure that they’re being filled up and jobs are coming in,” Harvey said, adding that Ashley Capital’s current Michigan portfolio projects somewhere between 2,500-4,000 jobs could come to the completed Buick City site.
The Buick City deal is now in a “due diligence” period in which Ashley Capital will be proving out its investment before finalizing an agreement.
According to Rasher, that process will include inspecting the title, a physical inspection, “looking at the environmental conditions and the constructability conditions of the property,” securing government approvals, and canvassing the market for potential users.
“That’s the typical process,” Rasher said, adding that though the reported timeline for said process was roughly a year, negotiations for the deal may stretch longer.
“The reason I’m loath to say at the outset, ‘it’ll take X months or X years’ is because there is no date known at the beginning as to when the closing will be,” Rasher said. “Given the flexibility that our buyers have for exercising their options, their rights of extension for various periods.”
Regardless of timeline, Harvey said Ashley Capital viewed the site as a great location for potential development.
“This is a really great site right off a major expressway,” she said. “It’s got tons of power—which is important for industrial. It’s got rail and it’s relatively flat. All these things matter.”
When asked about his own outlook for the deal, Rasher added, “Ashley would not have shown any interest in this property or would not get into contract with us if they didn’t think there was a market there … So I can’t guarantee success, but I can guarantee you we have picked a very good partner.”