The News: Michigan Property’s Blueprint to Factory Renewal

Odds are better than ever that some time in 2009, a tenant will take the last 200,000 square feet available at Midlink Industrial Park in Comstock Township, Mich. If and when that happens, the lease signing will cap a remarkable comeback for the former site of a General Motors Corp. stamping plant. Since closing in 1999, the 340-acre site has undergone a transformation into a 1.6 million-square-foot industrial park. “If nothing had been done, it would still be vacant, the building covered in rust, and it would be one of the great eyesores of the state of Michigan,” said Ron Hitchens, CEO of Southeast Michigan First, the economic development agency that is coordinating the property’s rebirth.Midlink’s example may offer some valuable insight for those charged with writing the next act for closed automotive factories and other manufacturing facilities. To begin with, a long lead time is probably in the cards, so patience is a virtue. From the time Hackman Capital Partners acquired the property in 1999, it took two years to clean out the buildings, Hitchens recalled. Another three years passed before the property began to generate rental revenue.Former factory sites often find new life as other property types. The master plan allows for office development on one 38-acre parcel and an open-air retail center on another 43 acres. Yet from the start, Southeast Michigan First intended to maintain industrial purposes for the former GM facility. A number of factors contributed to that decision: a location roughly halfway between Chicago and Detroit, nearby highways and freight-rail lines and a highly trained blue-collar workforce.Once that determination was made, however, a specific strategy took several years to come together. For the first couple years, the economic development agency tried to find another tenant that would maintain the facility’s use as a stamping plant. At the time, it was the logical choice, but when the plan did not pan out, a diversified multi-tenant strategy was the next move.Toward that purpose, the GM facility underwent a major change that divided the old plant into two buildings of roughly equal size. That immediately made the buildings more attractive to prospective tenants by doubling the number of truck docks available, Hitchens explained. The 854,526-square-foot east building was designated for heavy manufacturing use. At 811,927 square feet, the slightly smaller west building is intended for light manufacturing, assembly and research and development. Positioning Midlink as a versatile facility has served it well. Recent leasing activity in the west building includes specialty concrete firm Tourney Consulting Group’s expansion to 20,000 square feet. Midlink’s biggest coup of 2008 was signing Kaiser Aluminum to 464,519 square feet of manufacturing space in the heavy-duty east building. Kaiser is scheduled to complete move-in next fall.As with almost any renovation project of this scale, Midlink needed buy-in from elected officials. A state tax-break program for businesses and a multimillion-dollar commitment to new roads and utilities all entered into the mix. And in a competitive industrial market, an economic development agency staff member dedicated to marketing the site is essential, Hitchens noted. “Time is not your friend, so (leasing the facility) absolutely has to be a passion.”