Train depot changes ownership ahead of expected Ford announcement
The long-empty Michigan Central Depot and a former book depository in Detroit's Corktown neighborhood have changed ownership from the billionaire Moroun family to an entity linked to a New York law firm.
The moves come ahead of an expected mid-June announcement that Ford Motor Co. will revive the buildings as part of a new Detroit urban campus.
Representatives for the publicity-shy Morouns did not reply to requests for comment Wednesday. Ford spokesman Said Deep declined to comment directly on the ownership swap, deferring to the company's previous statement that it expects to grow its presence in Detroit and will share details in the future.
Last week, Ford's business teams for autonomous technology and electrification moved into another Corktown facility known as The Factory at Michigan Avenue and Rosa Parks Boulevard. The facility is about four blocks east of the former train station.
The Dearborn automaker aims to create a hub for its self-driving and electric vehicle divisions in the Corktown neighborhood on the southwest edge of downtown, multiple sources familiar with the ongoing negotiations for Michigan Central Depot have told The Detroit News.
The former train station, at 200 15th Street, and the former Detroit Public Schools book depository building, next door at 2231 Wabash, are two of the locations where multiple sources say Ford aims to set up shop.
The warranty deed for the train station was transferred this month by the Moroun-owned MCS Crown Land Development Co. LLC to New Investment Properties I LLC, linked to the law firm Phillips Lytle LLP. No price was given.
On the same day, the Moroun company transferred ownership of the book depository to a separate entity called New Investment Properties II LLC, also linked to the New York law firm. That has a contract price for $8 million.
The limited liability companies were formed earlier this year. According to online records, Phillips Lytle LLP formerly represented Ford's lending arm, Ford Credit, in a lawsuit.
There could be “a whole host of reasons” why the properties are now controlled by new entities, said Eric Larson, a veteran in many major local commercial real estate deals. He’s president and CEO of Larson Realty Group in Bloomfield Hills. One possible reason is that the Morouns may still have an ownership stake, but he said “this wouldn’t be a typical unless there was a tax benefit."
More typically, creating a new ownership entity is to give a complex deal “a bit of breathing room,” Larson said. “This is a very large complex project” that would involve many more legal steps, he said.
The impact of the sale and potential redevelopment of arguably the largest symbol of Detroit's decline is hard to overstate. Vacant since 1988, the former depot is a 504,588-square-foot, 18-story building that sits on 4.9 acres of land, according to CoStar Group, a commercial real estate information service.
The book depository, sometimes called the Roosevelt Warehouse, has been empty for decades. In 2009, the building was so wide open that a homeless man was found dead at the bottom of a frozen elevator shaft.
Multiple sources familiar with the situation have told The Detroit News that negotiations between the Morouns, the long-time owners of the buildings, and the Blue Oval have accelerated in recent weeks as the deal to buy the properties takes shape, and Ford moves to assemble nearby land to build an urban campus in Detroit.
Ford is also said to be interested in a block-long facility known as The Alchemy behind The Factory.
In May, The News reported a mystery sale of a dozen empty lots in the neighborhood, which hinted at a larger land deal.
Corktown strikes a sentimental chord with Ford Motor Co. Executive Chairman Bill Ford Jr. His ancestors hailed from the county in Ireland for which Detroit's oldest neighborhood is named.
“I’ve seen Detroit at its best, and I’ve seen it at its worst,” he said in December when the company announced its purchase of The Factory. “We want to be part of it.”
For the last decade, the rebirth of Corktown has been defined by a decidedly hip retail community, ranging from hand-crafted cocktails to farm-to-table restaurants and independent retailers.
Planting a flag in Corktown could help Ford attract young technology workers who might otherwise work in Silicon Valley or other attractive tech centers, as Bill Ford and CEO Jim Hackett and his team push to give the company a facelift, slim down, and prepare for "Autos 2.0." Ford has announced an $11 billion global investment in electric vehicles, promising to launch 40 new EVs by 2022.
The train station opened in December 1913 and had been owned by the billionaire Manuel “Matty” Moroun since 1995. Through the years, there have been plans for renovation, but none became reality. A 2001 proposal called for converting the building into an international trade and customs center. In 2003, Mayor Kwame Kilpatrick announced a plan for it to become the new Detroit police headquarters.
In 2011, the Moroun family said they would hire crews to begin to remove asbestos-laden caulking and glazing from the huge arched first-floor windows that provide a view to the once-elegant lobby with marble pillars.
In 2013, the Detroit City Council passed a resolution that ordered Moroun to destroy the landmark building, which is on the National Register of Historic Places. The Morouns ignored the order.
The estimated cost to renovate the 18-story building is somewhere between $100 million to $300 million, Moroun officials have said in the past.
Corktown expansions from Ford would complement an already-underway 10-year renovation of its world headquarters campus in Dearborn, and a $60 million mixed-use development in west Dearborn.