Whitmer creates commission to study solutions to Michigan population loss

Trenton secures loan to buy McLouth Steel site

Jennifer Chambers, and Michael Gerstein
The Detroit News

Lansing — The Michigan Strategic Fund approved a $3.2 million loan for Trenton on Tuesday to buy the former McLouth Steel and start investigating environmental cleanup costs at the site.

Trenton City Manager Jim Wagner said Tuesday the loan will help the city pay for a full environmental assessment of the 188-acre plot and to market the site appropriately to potential developers.

“This way, they know what environmental issues he or she faces,” Wagner said. “I am optimistic about the loan ... and this is the proper to way to go.”

Wagner said a town hall has been scheduled for July 12 in Trenton on the property. The Trenton City Council will vote on purchasing the property after that, he said.

The state loan also covers assessment costs and past taxes, Wagner said. The city intends to use $2.5 million to use off the county taxes, subtracting the city’s owed taxes. It would use the remaining $700,000 to probe the “unknown environmental clean-up costs.”

The city has already hired a private environmental consulting company to perform the assessment, he said.

Wayne County foreclosed on the McLouth Steel property in March for $3.7 million in unpaid property taxes, according to a document obtained by The Detroit News.

The city had been the second government entity in line to have a shot at buying the riverfront property that has been vacant for 21 years. Under foreclosure rules, the right-of-first-refusal process begins with the state, which declined last month to buy the land for $4.65 million, its fair market value plus back taxes.

The property is attractive because of the three international railways traversing through it, the new Gordie Howe International Bridge planned nearby and 1,600 feet of waterfront dockage with a water depth of 28 feet, Wagner said.

Multiple developers have shown interest in the land, according to the MEDC. But officials there declined to divulge any more information about who might be interested or what potential projects the site could see.

Khalil Rahal, executive director of Wayne County’s Economic Development Corp., attended Tuesday’s meeting and said the county plans to work alongside Trenton to determine the best redevelopment purpose for the property. Ultimately, Rahal said, Trenton could pass on the purchase and allow the county to buy the land, depending on what challenges come up.

“When the property was foreclosed on, we got together with Trenton and discussed the best redevelopment. We didn’t want it going to auction. And so we collectively put out (a request for quotation). The hope is together we will receive offers. We would have offers we could vet out collectively and then make a decision as to whether it’s the city or county (that should proceed),” Rahal said.

“It’s a big job. It’s an 188-acre site with 1 million square feet. We need as many bodies at the table as we can to help us redevelop this property.”

Trenton must decide on whether to buy the land by July 31, Rahal said.

“We have multiple offers for the site ... We are still trying to figure out who is the best party,” Rahal said.

MEDC Executive Vice President Greg Tedder told reporters after the meeting during a press conference “we want to help empower them … because it’s obviously been challenged and obviously condemned and vacated for a long time.”

The money is meant to address significant environmental cleanup that’s needed at the site, MEDC officials said.

They don’t yet have a timeline for when the property could be auctioned off to interested private developers.

The McLouth Steel Co. had not operated on the site since the late 1990s. The factory was purchased and operated by Detroit Steel Co. until it ceased operations and local operators purchased the plant land. McLouth Steel was founded in Detroit in 1934.

In 1948, it bought a mile-long riverside property in Trenton, part of $100-million expansion. McLouth Steel, which had plants in Trenton and Gibraltar, filed for bankruptcy twice — in 1981 and 1995. It was later sold to Detroit Steel.

In 2006, a proposal to turn the property into a residential-commercial site called the Bay Village of Trenton failed. A proposal to renovate the site for more than $200 million and produce steel again there also failed.