By on April 30, 2018

Image: Wikimedia (CC BY-SA 3.0)

There’s been much made about Ford’s secret/not-so-secret plan to purchase a major chunk of Detroit’s Corktown neighborhood, including its greatest landmark — the monstrous, long-abandoned Michigan Central Station. Until now, however, the only words we had to go on were whispered by sources who preferred to keep their names out of the media.

Thankfully, Edsel B. Ford II decided to pipe up today.

Questioned by media at an event, Henry Ford’s great-grandson, who sits on the Ford Motor Company board of directors, confirmed that the automaker is considering purchasing the 18-storey monolith.

The board “has been briefed” on the purchase plan, he said. Ford’s comments featured in a tweet by Crain’s Detroit Business reporter Chad Livengood.

A discussion of the plan, as well as a potential vote, could come as early as a board meeting scheduled for next week, Ford added. That jibes with the date listed in a recent report from Crain’s, in which the publication detailed the automaker’s attempts to buy up land in the area near the station. The property amassed could total more than 1.1 million square feet.

The station itself, which last saw a train pull away in 1988, contains roughly half a million square feet of floor space. As anyone with internet access knows, it isn’t in the best state of repair (see recent photos here). The Moroun family, longtime owners of the property, only recently installed glass in the building’s windows. As of last year, the figure floated for what it would cost to complete the renovations stood at $100 million.

It’s likely Ford would get a lucrative helping hand from the city of Detroit were it to snatch the property away from the Morouns.

Acording to multiple media reports, it’s believed Ford wants this property, and those surrounding it, to house employees working on the next phase of motorized transport. “City of Tomorrow” kind of stuff. Known as Auto 2.0, the effort loosely groups together teams working on autonomous vehicles, ride-sharing, and other mobility efforts.

What isn’t known is whether Ford’s planned campus, seen as a hub for all things futuristic, will serve as a satellite locale or something larger.

[Image: Wikimedia Commons (CC BY-SA 3.0)]

Get the latest TTAC e-Newsletter!

Recommended

37 Comments on “Ford’s Plan to Buy Towering Detroit Pigeon Coop Isn’t BS...”


  • avatar
    sportyaccordy

    Not bull crap… pigeon crap.

  • avatar
    star_gazer

    Great news! My son and I visited Detroit a few years back on a business trip. We stayed at the Marriott on the Renaissance Center grounds. The Central Station is one of the stops we made while exploring the city. Awesome building with much potential. I have high hopes for this structure and for Detroit.

  • avatar
    DeadWeight

    Newsflash:

    Detroit is a sh*thole (I love in suburb of Detroit) and its “comeback” is being overhyped by the core business community and hipsters that occupy an approximate 4 square miles of the core city center and adjacent neighborhoods (e.g. Corktown, e.g. Bricktown, etc.).

    The investments in Detroit over the last 8 years are confined to office space, hotels, a little bit of tech and R&D, and in larger part, sports arena (floated 90% by taxpayer-backed bonds).

    Detroit is still a one-trick pony hitched to automotive, and the accountants, attorneys, MBAs, ad execs and others that occupy CORE DOWNTOWN office digs work for firms that are massively exposed to the next downturn in the auto industry.

    Also, Detroit is so far deeper in debt than what glossy headlines depict; Detroit has 3rd world public schools, 3rd world neighborhoods, and 2nd world police and fire departments.

    If people realized the actual numbers, they’d realize that Detroit, given its debt and reliance on the auto industry, is a massive black hole of debt (the numbers are astounding), and that money invested into Detroit since *probably* 2015 is dead money, never to see a profit, unless its subsidized by bonds/taxpayer money, such as oligarch-like secured financing to build sports arenas and the like.

    The hottest thing in Detroit right now are the wild west-like marijuana “dispensaries” which are unregulated old buildings with LED grow lights that litter the fringes if the core downtown area, where god knows what is happening.

    • 0 avatar
      DeadWeight

      p.s. – Detroit does not have the amenities or infrastructure, nor will it have in the next 10 years, let alone 20, to support the investments flowing in, and even much of the past investment over the last 3 years.

      Even cities like Seattle and Miami are in a bubble, despite having 1) far more international exposure and investment, and 2) having viable and robust tourism (year round), and 3) world class infrastructure, 4) healthy financial balance sheets, and 5) tolerable to very nice climates.

      Detroit has the complete, diametric, opposite of 1, 2, 3, 4 and 5 above.

      When Detroit’s bubble of hype as a “comeback city” breaks, it sill make the cover of Time Magazine, The Economist, and major publications worldwide.

      (There are sustainable, rational investments on a grand scale happening in other parts of Michigan, which have 1st world balance sheets and are not a black hole of debt; Detroit is so deeply in debt that it would take 20+ years of 8% to 10% growth to climb out of the hole – it’s a hacker’s bet).

      • 0 avatar
        MBella

        I wouldn’t call it a bucket of hype. When I was little, that core that you mention was about a 1/2 square mile. Then it slowly became 1 square mile, and kept growing. Recently, I couldn’t believe how nice some areas are becoming far from that central core. There are neighborhoods being fixed up on livernois pretty far north. Areas none of us would even consider going to not that long ago. Remember long ago, Corktown was thought to be so far outside of the central core of the city that it will never see any kind of rebirth. Now it’s pretty much considered downtown.

        Seattle, I’m starting to believe you are right about. It seems to be copying Detroit circa 1967. It’s not racial issues this time around, but economic. Either way middle class people are fleeing the city in droves. It won’t turn out well, if all that’s left is a couple of millionaires and a huge homeless population.

        • 0 avatar
          DeadWeight

          It’s taken 40 years to build out from a core, liveable downtown area of maybe 1 square mile, to MAYBE 4 square miles (and the liveable if you are a parent or anyone other than a hipster, broke artist, millennial student, etc is debatable still), and a corollary bankruptcy of the city (chapter 9) and many hundreds of millions of dollars of investment, much of it in the form of subsidized corporate, bond-backed-by-the-remaining-taxpayers, welfare.

          And in that process, over 40 years, that exposure to the auto industry (heavily cyclical) is still nearly as great as it was 40 years ago (with casinos, some small restaurants and a small distillery scene, new sport venues, and hipster type broke-a$$ love of punishment slightly reducing that total exposure).

          A lot of people and firms who invested heavily in Detroit are going to get crucified during the next serious downturn.

          Detroit has massive debt and deficits, a dysfunctional infrastructure, a Mad Max like public school system, and barely functioning city police and fire/EMS services. These things are the massive investments going unattended while some shiny objects have been added to the ring of the glacial-like downtown core growth. It may take many hundreds of billions of dollars to fix the debt, infrastructure, schools, police/fire/EMS, just to bring Detroit to a level par with Baltimore.

      • 0 avatar
        star_gazer

        Sorry, I cannot support the “let the world burn” mentality about Detroit. There are no newsflashes here, the problems of Detroit are known. Are these problems immutable? Do we just wall off a chunk of real estate and state: “You are Detroit: No Grosse Pointe riches for you”?

        Yep, I’m an optimist concerning people. I’ve seen the awe-inspiring changes that can happen when good people do great things. How was East Berlin’s infrastructure in 1989? Beyond hope? How about the U.S. in 1930? Were we deep in debt? I could come up with example after example of people rising from the ashes of despair to do great things.

        I don’t know if you had experienced Detroit up close, but, if so, I wish you would share more than a spreadsheet. My son and I walked the streets during the MLB playoffs. The streets were alive; the restaurants and bars full. As we walked, I noticed a lot of young couples, which to me is a sign of a vibrant community. As we approached our designated watering hole, we had to step around three homeless men sleeping on the sidewalk. After we had dinner, we walked past the same men, who were now being ministered to by others. I guess these soup-bearing people are optimistic about humans, too.

        Our society is messy. The haves and the have-nots. Do you suppose that the “haves” are the ones who embrace creative destruction and gentrify these neighborhoods? Do you think that these “haves” take risks with their time, treasure and talent to improve not only their bank accounts but the world as well? I’m counting on these men and women to reclaim Detroit.

        • 0 avatar
          Big Al from Oz

          star_gazer,
          I understand your dream. Unfortunately the examples you cited are from a bygone era. The era you described is when all, globally confronted the same challenges, there were no real competitors to the US. Now you have some serious competition, hence Ford’s move with cars.

          Ford can’t compete within the US unless it relies on those handy government tariffs on pickups, different controls and regulations governing your vehicles.

          It’s not Detroit, it’s the US that need change to change Detroit. Detroit represents an image of the US’es once industrial might.

          San Franciso, Seattle is where the American future lies.

          Can Detroit rise to it’s glory days of yore? No.

          Ford, GM and Chrylser don’t have the resources. The well heeled as is evident across the US are becoming better well heeled.

          To make the change you want some serious restructuring is required and I don’t know if Detroit or for that matter the US is able achieve that mission.

          Detroit needs something to replace it’s manufacturing sector. What is there? Rich people with money is just that, people with money, not business.

          The streets you described with people in bars and restaurants is no different than any country, even middle income countries. Full bars and restaurants only provide $2.70ph jobs, plus measly tips.

          • 0 avatar
            star_gazer

            Big Al from Oz:

            Thanks for your comment.

            In his book “Eat the Rich”, P.J. O’Rourke set out to discover what made America as wealthy as it is. O’Rourke visited other countries – Russia, Cuba, Sweden (if my memory serves me correctly…) etc. and compared it to the United States. He concludes that our country has a unique set of freedoms, rights and laws that allows our country to prosper. Also, he states that we could screw it up by limiting our freedoms.

            I base my opinions not on the past but on these freedoms that form our country. I think the freedom to screw up is important – people will bet their treasures in rebuilding Detroit. Is Detroit a sinkhole? Time will tell if the bets made will pay out.

            I do have a high regard for the abilities of people. I do not expect bad stuff to improve overnight. Speaking of overnight, I work third shift, so it’s time to sign off. I look forward to your thoughts on this matter.

          • 0 avatar
            DeadWeight

            sg – I can appreciate you rooting for a city like Detroit.

            Few would believe that I would love to see Detroit and many other cities such as it, left behind since the 1980s, and struggling to reshape a successful, enduring comeback, mount a successful comeback.

            But one has to be realistic and empirical about such things, and the basic, stark math and global trends (accelerating rapidly) don’t bode well for their prospects, particularly in areas that do not have very diversified economies, very good (excellent is actually required on the global’level) infrastructure, primary school education, etc.

            The massive debt burdens (so large that even periods of annual progress, for many years at a time, hardly dent the underlying current, and especially, future fiscal needs) act as a major drag and quicksand, also.

          • 0 avatar
            redmondjp

            SFO and Seattle is NOT where the American future lies. These cities, like Detroit, are dependent upon one industry: Tech. When it crashes again, there is no plan B. When Amazon builds its new HQ elsewhere (make no mistake, there will NOT be two HQs), the exodus out of Seattle will begin.

            We have record tax revenues at all levels of government, yet Seattle still has traffic lights installed for the 1962 World’s Fair, as well as no neighborhood sidewalks, crumbling asphalt, and 100+ year old water and sewer mains.

            Another thing propping up these two west coast cities (along with Vancouver, BC) is massive offshoring of Asian cash, parking it in North American real estate (both residential and commercial). If it wasn’t for this, our housing prices would be far lower than they are now. This is not sustainable in the long run.

            I keep telling people here that Seattle is the next Detroit and people don’t believe me. Government leaders here, although of a lighter skin color, are every bit as corrupt as in Detroit and Wayne County.

          • 0 avatar
            DeadWeight

            Seattle, and Washington State, is more diversified than Detroit and Michigan, with Aviation (Boeing, etc.), Big Tech (MS), incubator tech, tourism (Michigan has tourism, too, but not Detroit), agriculture (including fishing of high value species), and the infrastructure in the worst part of the Seattle metro area (Kent?) is still far better than the worst parts of Detroit.

            This is why Seattle and the metro area there caught a cold in 2008 while much of the rest of the nation caught pneumonia.

            Seattle also doesn’t have the bitter winters Detroit does, with a very moderate, year round climate (rarely above 85 f, rarely below 40 f).

            Seattle and its sister cities such as Bellevue and Redmond have a big problem, though, and it’s the same one afflicting cities such as San Francisco/Cupertino/Mountain View; massive inflation that’s crushing even those with what would be highly respectable salaries/income in almost any other part of the nation when it comes to housing, insurance, food, tuition, etc.

            In fact, inflation, is white hot (don’t follow BS gov’t statistics which are outdated models), and is going to cause the next crisis when it leads to a wave of job layoffs, on a national level, and we’re far nearer that point than most realize (I’m in the trenches of a particular industry and see what’s happening in real time and what it’s doing to producers and end-users).

    • 0 avatar
      Tele Vision

      An acquaintance of mine, who owned a thriving live music club called Broken City in Calgary, threw in the towel on that and moved to Detroit to open a bicycle shop. He was never heard from again…. Kidding, I’m sure he’s fine but I never heard a thing about him after he upped-stakes and set out for Michigan.

      • 0 avatar

        Well, he still seems to be in business, as unlikely as it seems. I would think building fairly low-cost bicycles in Detroit is a hard way to make money but six years in and still going strong. https://detroitbikes.com/

    • 0 avatar
      JimBot

      I stopped reading this nonsense at “I live (sic) in a (sic) suburb of Detroit” people like you should stay there. Idiot.

  • avatar
    redapple

    Deadweight is correct.
    I can hardly listen to Paul W Smith on WJR in the mornings. The happy, up with people BS is so syrupy, I could barf.

    Good Luck y all south of 8 mile. I ll stay up in Birmingham and drink my griffin claw.

    • 0 avatar
      Adam Tonge

      Griffin Claw is better than Atwater anyway.

    • 0 avatar
      DeadWeight

      Atwater is flavorless ditch-digger swill. You could relabel it as Coors and most couldn’t tell the difference.

      Shorts is good. Most of the good stuff in the Midwest comes from northern/western Michigan (Bell’s), Illinois, Wisconsin, etc.

      Everything is relative.

      The entire globe is in a massive bubble at 229% debt to GDP (it’s really closer to 2x that ratio of debt to GDP thanks to voodoo accounting tricks).

      The U.S. has just borrowed nearly 500 billion USD in Q1 2018 (nearly 2 trillion USD on an annualized basis); Canada, Australia, Japan, the UK, Spain, France, Italy, etc are basket cases of debt (god only k own how bad China’s debt crisis is – they don’t report even fake figures).

      The next downturn is going to be really bad. The fed funds rate was 5.25% at the inception of the great financial crisis in 2008, which allowed the Fed and other major central banks to cut to nearly zero while their respective governments loaded up on debt to dig out of the crisis (seemingly) – Now, what sill they do with rates pegged already very low and while they are sitting on a nearly unprecedented mountain of debt (you have to go back to WWII to see larger debt loads)?.

      But when the next pin prick pops the existing bubble, those cities like Detroit have no Manu option in the form of reserves, and are, to the contrary, completely vulnerable to vulture asset stripping of the carcass that exists.

      • 0 avatar
        Big Al from Oz

        DeadWeight,
        Um, Australia is not a basket case with debt, it’s 101st in debt as a percentage of GDP (46%).

        USA is 38th with nearly 78% of GDP
        Canada is 16th with 98% of GDP
        Japan is 1st with 237% of GDP
        UK is 20th with 92% of GDP
        Spain is 15th with 98% of GDP
        France is 17th with 96% of GDP
        Italy is 4th with 132% of GDP

        China is 173rd with 16% of GDP

        What you need to do is not just look at the numbers, but also the ability to pay down the debt in the future.

        I understand your view, the US under Trump is ramping up Government debt, which is not good. Most countries are in that position in the OECD.

        The cause of this is we still are feeling some of the effects of the GFC. the EU is still pumping money into their economy using quantatative easing.

        The US with its economy currnetly moving forward, but not pumping should be looking at stablising it GDP to debt ratio.

        Some of those EU countries, particulary those on the Mediterranean tried to equal their northern EU partners quickly as money in the EU was easy to borrow and they sort of lied about the actual finances of their respective countries.

        I also view any economic or financial data out of China with some scepticism. The best way apparently to judge the Chinese economy is by energy and commodity importation.

        https://www.economicshelp.org/blog/774/economics/list-of-national-debt-by-country/

        • 0 avatar
          DeadWeight

          1) Those debt-to-GDP figures are lower than reality thanks to significant gimmicks deployed by government trickery (an entire PhD thesis could be written about this).

          2) Also, look at HOUSEHOLD-TO-DEBT GDP %’s :

          “As a matter of fact, Australia has always had one of the highest household debt-to-GDP levels among developed economies. In the last three years, Australia’s household debt as a percentage of GDP has grown quickly and reached 123% in 2017.”

          https://www.canadianmortgagetrends.com/2017/08/canada-lesson-australia-economic-experience/

          • 0 avatar
            Big Al from Oz

            DeadWeight,
            I’m currently working in analysis of data for contracts with major airframe manufacturers. My role is that of a SME and I have made many to determine risk. My role is for my technical input an subject matter expert. I’m also completing accounting and finance at the moment.

            Analysis is not black and white. Household debt is apart of the situation outside of government borrowings. You also have you current account to factor in.

            Also, what are the debts? Now all debt carry risk, but the degree of risk is what’s important.

            Home loans and loans for infrastructure investment is far less risky and are more likely to produce a return than say credit card debt at restaurants and buying or leasing a car.

            Australia main household debt is investment into property. The current account and much of it is aviation (aircraft), mining infrastructure investment and military. These debts are not that bad as just borrowing to pay for welfare (Greece, Italy, Spain) or other areas where money evaporates on imports.

            Much of our debt is also by foreign overseas corporations, ie, mining infrastructure.

            Dig a little deeper into what types of debt countries have.

            You are also correct that data and information can be skewed to suit any argument you like.

            I do believe I’m quite neutral and methodical in my application of knowledge.

            As with my comment regarding information I put forward on TTAC (like you do) does put some of the “non believers” out there regarding the US’es (Big 3) real position in auto manufacturing. They don’t like my comments and are extreme in their subjectivity in relation to the current challenges confronting the Big 3. They are big.

  • avatar
    EBFlex

    Good job Ford. Can’t figure out how to make cars at a profit so you’re going to buy a condemned POS building and sink MILLIONS into it.

    Good job furniture guy. Way to focus on your automotive business and making money.

  • avatar
    Oberkanone

    It’s an SUV of a building.

  • avatar
    Mike_H

    Breaking! Morons to buy building from Morouns.

  • avatar
    Middle-Aged (Ex-Miata) Man

    I never thought Ford’s announcement was Bravo Sierra, just another laughably idiotic example of throwing good money after bad in a vainglorious corporate attempt to “save” a festering boil of a city that should’ve been reduced to ashes long before 2009.

    But no, not BS…

  • avatar

    It is better than buying overpriced European “jewels” like Land Rover and Jaguar and sinking billion dollars into them with no return return and then giving them away them for peanuts. Investment into distressed real estate may pay off in the future. Who said Ford is a car company? It is real estate and financial company.

    • 0 avatar
      DeadWeight

      Gotta disagree.

      Range Rover has a license to print money now and into the future if they play their cards right; Range Rover is iconic, timeless and has global recognition, and actually has some vehicles (NOT Evoque or other garbage) that are supremely comfortable and effortless, styled beautifully and with gobs of power and suspension travel off-road or on.

      Separate the Jaguar out, and Range Rover is a crown jewel, and can be greatly strengthened as a real, enduring asset that sells luxurious SUVs in a wide price range of $70,000 to $150,000, appealing greatly to the global wealthy and aspiring class.

      I’m not saying Range Rover is being run optimally now, but has massive potential (this is particularly true if they keep working hard and get results upping their reliability and dealership network and dealer performance re customer pampering).

      • 0 avatar

        There are too many “if”s with Range Rover and history shows that they fail in the end. Once bankrupt always bankrupt. And Range Rover is a car not real estate. My house doubled in value in less than 6 years I own it. I live in Bay Area but still. And my car (ironically Ford Fusion R.I.P) only depreciated during 4 years I own it

  • avatar
    Trucky McTruckface

    You have to be a head-in-the-sand, Pollyanna Detroit local, or a mouth breathing defender of all things Ford to think this is a remotely worthwhile investment. Nobody wants to live or work in downtown Detroit, or any of the other dead rust belt cities that are also constantly floating plans to repurpose abandoned ruins that have no value outside the local historical society.

    What a shock that the Fords are all over this. Seeing as they don’t seem to learn from their mistakes in automaking and football, it’s no surprise they haven’t learned from their past real estate follies. Hank the Deuce was the primary force behind the RenCen, which was a financial failure for years until GM stepped in.

    And the timing of the announcement is just so laughable. Ford overreacts to investor pressure by dumping their whole car line in hopes of distracting from their excessive debt and poor cost structure, and then spills the beans on this boondoggle the following week? Wall Street investors don’t think like hipsters on Kickstarter, so I doubt they’re going to be reassured about the company’s future based on moves like this.

  • avatar
    dusterdude

    All I can say is “Huh !!?? “. Are we sure this isn’t a late April Fools joke ? It’s too bad of an idea to be taken serious !

  • avatar
    tylanner

    It’s like a retiring player signing a one-day contract with their old team…

  • avatar
    Roberto Esponja

    This building was a bad idea when new and never got better. Yes, it’s pretty, but I think renovating it is throwing good money after bad. It shouldn’t have been built where it was, period. A prime example of a government boondoggle.

  • avatar
    Jeff S

    How about some aluminum siding on that building.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • NormSV650: Probably the most miles it will see for the rest of the decade….
  • Inside Looking Out: Congratulations with your new car Corey. Did you have a plan B when planning the trip? It is a...
  • Dodge440391SG: My Dad bught a new 1950 Studebaker without a heater. It has been reported that my Mother was not...
  • ptschett: ‘Minnesota’ might be the problem there. When I was growing up in South Dakota the conventional...
  • NormSV650: Acura delays the Honda turbocharged announcment until another auto show.

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States