Wixom Ford plant redevelopment hits another snag

After years of hope that the shuttered Ford Motor Co. Wixom assembly plant site would be occupied and thriving with green technology companies coming to roost in short order, Ford Land Development must contend with yet another setback.

One of the two renewable energy companies previously interested in the site, Xtreme Power, officially backed out of pursuing a lease agreement on the property, leaving only shades of hope that Clairvoyant Energy will remain on board.

As a result, Ford Land has opted to modify plans and rewrite a brownfield resolution plan that refrains from naming any company specifically.

“The withdrawal of Xtreme from the Ford development brings finality to the saga,” said City Manager Mike Dornan. “The global economy drove the company’s (Xtreme) inability to solicit capital. Risky and new technology caused the project to change direction.”

The brownfield cleanup and redevelopment plan would restore the environmental and economic viability of the sprawling parcel located at 28601 S. Wixom Road.

The Oakland County Board of Commissioners established a Brownfield Redevelopment Authority and board to facilitate cleanup efforts within Oakland County communities in accordance with Public Act 381 of 1996.

On Sept. 13, the Wixom City Council adopted a resolution for the Ford Wixom project concurring with the provisions of a brownfield plan adopted by the Oakland County Brownfield Redevelopment Authority. However, as of Oct. 4, a new plan had been drafted that would change the description of the proposed development from a renewable energy park to an industrial park; reduce the number of parcel redevelopments from three to two; and delete any references to both Xtreme Power and Clairvoyant Energy.

“The primary issue was to get Xtreme Power and Clairvoyant Energy off and to put in general and vague language in case another company comes in so it could qualify for the brownfield credits also,” said Assistant City Manager Tony Nowicki.

The City Council was expected to take up the resolution at its meeting last night, Tuesday, Oct. 25.

“It’s an opportunity for Ford and/or a newcomer to take advantage of the brownfield credits offered by the state through Oakland County,” Dornan said.

Ford Land engaged CBRE, a real estate company, to market the property on a global basis. Now a new company has come forward showing sincere interest in purchasing the property, according to Dornan.

“It’s a significant project and the company has a proven track record, so stay tuned,” Dornan said.

The brownfield designation would be necessary only if the property is leased. The brownfield credit is a one-time, one-year tax incentive based on a percentage of investment.

Xtreme Power and Clairvoyant Energy unveiled their plan in 2009 to build a renewable energy park at the site by investing $725 million, a shot in the arm to the local economy that was expected to create approximately 4,000 jobs. The companies’ proposals to purchase the site were contingent on state incentives and federal loan guarantees.

While the state awarded them substantial incentives, $500 million in loan guarantees from the U.S. Department of Energy (DOE) were still needed. Xtreme Power and Clairvoyant Energy terminated negotiations with Ford in April after the DOE modified the loan terms.

In light of recent changes to the state’s business tax structure, the state gave Xtreme Power and Clairvoyant Energy until the end of the year to secure tax incentives.

Without DOE financing, Xtreme Power and Clairvoyant Energy changed course. They shifted gears to solicit private capital and reduced their proposed building footprint from 2 million square feet to 500,000. Furthermore, they reneged on purchasing the site, but were considering leasing it.

The Wixom City Council has put off granting Ford a “Renaissance Zone” incentive to provide a 100-percent tax abatement on local real and personal property for 15 years.

The Renaissance Zone proposed would apply to 239 acres out of the total 317-acre site. It would be zoned as a combination of industrial, manufacturing, research and development and flex space.

Along with the Renaissance Zone incentive, the city would request that the property owner be responsible for a special assessment district (SAD) in lieu of the taxes lost and the costs of municipal services.

“We never finalized any type of agreement, so these are on hold pending Ford Land identifying a serious purchaser or tenant of the site,” Nowicki said.