Detroit works to assemble land for Fiat Chrysler deal

Candice Williams
The Detroit News
Fiat Chrysler plans to invest $1.6 billion in expanding its Mack Avenue facilities with a new plant.

Detroit — The City Council is expected to discuss Tuesday a set of resolutions that will put the city about halfway toward its goal of assembling 200 acres for Fiat Chrysler Automobiles NV’s $2.5 billion plant expansion on the city’s east side.

“The plan is to focus on this next couple of weeks to get everything done,” said Basil Cherian, deputy group executive for the city of Detroit’s Jobs and Economy Team.

In a 52-page document submitted to the Detroit City Council on Monday, Maurice Cox, director of the Planning and Development Department, requests approval on multiple land transfers and property sales to support the proposed Mack Avenue Assembly Complex. The transactions involve Hantz Farms, DTE Energy Co., Detroit Land Bank Authority and property owner Michael Kelly.

The proposed development agreement comes as the city closes in on an April 27 deadline to acquire 200 acres of land and secure City Council approval for the development.

Fiat Chrysler plans to invest $1.6 billion in expanding its Mack Avenue facilities with a new plant and investing $900 million to modernize its Jefferson North Assembly Plant. The investment will bring about a total of 5,000 new jobs to the city and gives the automaker the ability to build the next-generation Jeep Grand Cherokee, as well as new three-row and plug-in hybrid versions of the highly profitable SUV.

A resolution submitted to the City Council proposes that Hantz Farms transfer 37 parcels it owns for the development while the city also retains 32 parcels Hantz Farms had the option to purchase from an agreement it inked with the city in 2013. The properties will be transferred to FCA for its development, according to the document.

In exchange, Hantz Farms will be able to purchase 366 vacant lots and up 80 properties for $.0833 per square foot or property, Cherian said. According to the documents, Hantz Farms will develop unoccupied structures and maintain hardwood trees and conifer trees on vacant lots.

Mike Score, president of Hantz Woodlands LLC, deferred comment to the city Monday, noting the pending land transaction.   

The council will be asked to refer the proposed transactions to its planning and economic development committee on Thursday. From there, the resolutions will return to the council for a full vote before going to the Detroit Brownfield Redevelopment Authority board for final approval.

The resolutions also include a property exchange between DTE Energy at the site of its 75-acre old Conners Creek power plant site between Jefferson Avenue and the Detroit River. The utility is expected to swap about 40-acres — a portion of 12000 Jefferson and all of 11860 Freud — for three city-owned and 22 land bank-owned properties.

“DTE Energy plans to use the acquired properties to upgrade its infrastructure, which will help improve reliability for our customers, and meet the growing demand for gas and electric service as Detroit continues to develop,” the utility said in an email Monday. “Our plans include a new substation and potentially new service centers.”

The resolutions also call for the sale of six city-owned properties from a property owner named Michael Kelly in exchange for property at 3873, 3963 and 4621 St. Jean and 5732 Winslow, which will be transferred to the Detroit Brownfield Redevelopment Authority.

According to the resolution, Kelly plans to use the city-owned properties for residential development.

Late last month, the brownfield authority approved the purchase of 14.45 acres of leased land from the Great Lakes Water Authority for the development.

Last fall, the brownfield authority board approved initial steps in the city's request for assistance in assembling land to establish market-ready industrial sites in the city. The authority received $10 million in initial funds from the city from its 2014 bankruptcy exit funds to acquire properties and conduct environmental testing.

Twitter: @CWilliams_DN