Council OKs plan for Amazon center at old state fairgrounds site

The Detroit City Council approved the sale Tuesday of 138 acres to a development team for a nearly 4-million-square-foot Amazon.com Inc. fulfillment center at the site of the former Michigan State Fairgrounds.

“It’s imperative to find the best deal that we can for this piece of property,” Councilman James Tate said Tuesday. “That is what we have here today.”

In a 6-2 vote, the council approved the sale of the former fairgrounds for $16 million to real estate developers and investors Hillwood Investment Properties and Sterling Group, which intends to build a Amazon fulfillment center. Officials have said the project would create 1,200 jobs. A new transit center is also to be built from proceeds from the sale. 

Council members James Tate, Gabe Leland, Roy McCalister, Andre Spivey, Scott Benson and Janeé Ayers voted in favor of the sale. Council President Brenda Jones and Councilwoman Raquel Castañeda-López voted against it. Council President Pro Tem Mary Sheffield was absent.

Jones said that despite Amazon not seeking a tax abatement, she wants a guarantee of jobs for Detroit residents: “I would like to see something in writing for years to come for the residents in the city of Detroit who have forgone a lot."

In August, the city announced the project in which the development team plans to invest more than $400 million into the entire project and also plans to redevelop the remaining 70 acres with auto part suppliers or other employers. Amazon has said its workers are paid a minimum of $15 an hour with benefits.

Hillwood Investment Properties and Sterling Group did not immediately respond Tuesday to a request for comment. In a statement, Mayor Mike Duggan thanked the council as well as the residents who voiced their support of the project.

"I'd like to thank members of Detroit City Council for their leadership in approving the $400 million redevelopment of the former Michigan State Fairgrounds," he said. "This project will bring 1,200 new jobs, entrepreneurship opportunities and a new transit center to our community. With Council approval now in place, construction is expected to begin in the coming weeks. Attracting large employment centers like this is a major part of our strategy to lift more Detroit families out of poverty and rebuild our city's middle class."

The council also approved the construction of a $7 million Detroit Department of Transportation indoor transit center at Woodward near Eight Mile, also part of the deal, to be built through proceeds from the sale. 

The plan has drawn both support and push back from the community. While some are excited about the 1,200 jobs to be created by the project, others are concerned about the historical buildings, plans for the transit center and benefits for residents.

Among the direct economic impact for the city is $42 million in tax revenue for the city over the next 10 years, said Arthur Jemison, the city's chief of services and infrastructure.

The approval Tuesday marks the next step in the online retail giant's expanding footprint in Metro Detroit. Amazon has fulfillment and sortation centers within the past three years in Livonia, Shelby Charter Township, Romulus and Brownstown Township. There are also Amazon delivery stations in Romulus, Wixom, Sterling Heights, Pontiac and Hazel Park.

The state fairgrounds property as it stands now, prior to the sale costs the taxpayers, rather than providing the taxpayers jobs and tax revenue, said Patrick Anderson, CEO of the Lansing-based Anderson Economic Group: "Today’s announcement will hopefully be the start of the re-development of this historic site, with a whole lot more than Amazon deliveries coming out of it."

The council also first approved Tuesday a master plan that would change the site’s future general land use designation from regional park to light industrial. The site hosted the Michigan State Fair from 1905 to 2009. The property was transferred to the Michigan Land Bank in 2012 which later sold 142 acres of the property to the city of Detroit for $7 million in 2019.

Castañeda-López expressed concerns about environmental impact of the project. She said while she appreciates that there will be an air quality assessment, she had called for a health impact assessment to capture the baseline health of residents in the area.

Resident Frank Hammer, co-chair of the State Fairgrounds Development Coalition, said Tuesday his group is challenging through the Third Judicial Circuit Court the appraised value of the property.

He contends the property is being sold under value and should trigger the Community Benefits Ordinance, which would establish a Neighborhood Advisory Council of residents from the area the development would affect. He also said a public hearing for the transit center should have been held prior to the vote, instead of one being scheduled for November.

"We think that the process had been rushed," he said, "and that council could have reviewed or done more investigation before it made its decision." 

cwilliams@detroitnews.com

Twitter: @CWilliams_DN