Moroun’s McLouth Steel deal gets OK from Wayne Co.

Nicquel Terry
The Detroit News

Detroit — The long vacant and blighted former McLouth Steel site on Jefferson could be transformed into an automotive manufacturing facility after Wayne County signed off on a $4 million deal with Grosse Pointe billionaire Manuel “Matty” Moroun.

The Wayne County Commission approved the proposal Thursday, making way for a property transaction that will move the site to the county’s land bank and into the hands of Moroun.

Moroun’s real estate company, Crown Enterprises Inc., agreed to demolish the structures at the foreclosed McLouth site in Trenton and possibly build automotive manufacturing and logistics centers there.

Officials say 60 percent of the jobs would go to Wayne County residents.

Moroun also agreed to make an effort to use Wayne County businesses and residents to perform work at the site.

Wayne County Executive Warren Evans said in a statement the administration worked with Trenton officials to determine the best route for the site.

“This is a critical property that we all want to see cleaned up and put back into productive use,” he said. “Today’s a step toward making that happen. The property has its challenges, but we think that it has great potential.”

Crown Enterprises officials assured the commission they would finish the project despite growing criticism that the company is allowing its properties across Detroit to languish.

“No way I’m going there and not standing up to my commitments with the county,” Crown Enterprises president Michael Samhat said Wednesday. “It’s impossible.”

Under the deal, Crown Enterprises is required to raze the buildings at McLouth within 24 months, or the county can file an injunction lawsuit, said Khalil Rahal, the county's economic development director.

Crown Enterprises also must invest $20 million on the property within 72 months, or pay a $1 million fine to the land bank.

“If they fall $1 short, it’s a $1 million penalty,” Rahal said Wednesday.

Moroun’s company already has put $4 million into the county’s land bank to combat rumors the company would back out of the deal, Rahal said. The money is nonrefundable.

The $4 million will be split among the entities that are owed taxes including $1.4 million to the Riverview School District, $1.4 million to the city of Trenton and $650,000 to Wayne County.

Rahal said Crown Enterprises was one of four companies to respond to a request for qualification this summer when the county sought developers for the 188-acre industrial site.

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 state and city of Trenton both declined to purchase it at fair market value, which then left it in the hands of Wayne County.

Under the agreement, Crown Enterprises will have until Dec. 15 to close on the property, county officials say.

The McLouth 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.

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.


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Twitter: @NicquelTerry