Site Selection magazine
twitter linkedIn facebook email email
TRANSLATE: 
SNAPSHOT FROM THE FIELD
A Site Selection Web Exclusive, February 2011
SHARE THIS ON SOCIAL MEDIA
WEB Exclusive story

Diamond in the Rough

Like its brethren cities left holding closed GM plants,
a West Michigan community looks for an investor to share its dreams.

sNAPSHOT fROM THE fIELD
A public-private trio is poised to help redevelop this shuttered GM stamping plant in Wyoming, Mich., which closed in 2009.
By Dean Barber
I
Curtis Holt, City Manager, City of Wyoming, Mich.
Curtis Holt, City Manager, City of Wyoming, Mich.

n the 1989 movie "Field of Dreams," the story’s protagonist, a confused fellow by the name of Ray, is urged by a haunting, mysterious voice to build a baseball field in the middle of his Iowa cornfield.

Ray is told to follow his dreams by cohort Terrence Mann, a 1960s author and activist. "Ohhhhhhhh, people will come, Ray. People will most definitely come."

In Wyoming, Mich., there is another field of dreams, one occupied by a now un-occupied General Motors stamping plant. The plant, originally built in 1936, was closed in 2009 to the shock and dismay of the community, putting 1,500 well-paid workers out of work.

Now the people dream that an investor will come. It is a shared dream by a community that understands itself, and that patience will be rewarded in the end.

First Class Manufacturing

General Motors announced in September 2008 that the stamping plant would be permanently shut down. Wyoming City Manager Curtis Holt says he was told just two weeks before the announcement by a senior GM executive that the plant was safe from closure because it was too valuable a performer.

"When they closed the stamping plant down, we were very surprised," Holt says. "I had a close relationship with a senior executive at the plant who told me that he could not foresee closure because the plant was the No. 1 performer in terms of cost, productivity and with the least amount of defects.

"The day before the announcement, he called to tell me what was going to happen. He also said he had resigned because he could not believe that he worked for a company that would do this."

It was scrambling time in Wyoming, and to the astonishment of officials there, GM was not making things any easier.

"We got nowhere with GM. They had no desire to work with us," Holt says.

That all changed after the company filed for bankruptcy on June 1, 2009, and Motors Liquidation was formed to dispose of surplus company property. Local officials were soon gratified to learn that the concerns of the community were now being listened to by this new company.

"I think it soon became apparent to Motors Liquidation that we were eager and aggressive in our desire to get this site redeveloped. We also realized pretty quickly what a gem of a site we really had," Holt said.

Because of GM’s manufacturing requirements, the 90-acre (36-hectare) site had enormous electrical capacity, excellent highway access situated just off a freeway exit ramp, and more than adequate sewer and water capacity. The site was also served by rail. Soon a consensus was formed that the site, minus the building, had all the makings for a first-class class manufacturing location, Holt says. That‘s not to say there weren’t other views.

"We had people who said to look at a Wal-Mart or look at a casino, but our reply was that it would be a waste of a valuable site. Why would we waste this kind of valuable infrastructure on a Wal-Mart or a warehouse or a casino for jobs that simply don’t pay good living wages? We want manufacturing jobs for this site. We want people with jobs who can go to a restaurant and go to stores within our community," Holt says.

Thankfully, Holt says, community leadership and city elected officials agreed to that end game. Just as important, so did the developer chosen by Motors Liquidation to transform the property. With the selection of Lormax Stern Development Corp., the city of Wyoming had found another partner, a connection not dissimilar to the relationship it had formed with Motors Liquidation.

"The situation we have with the city is that they have certain desires on what they want to see happen with this property," says Chris Brochert, a partner with Lormax Stern. "We bought the property from Motors Liquidation, but also wanted input from the city because they are most desirous of having an industrial facility."

Everyone agreed that the 2-million-sq.-ft. (185,800-sq.m.) building had to come down, an expensive venture to be sure, estimated at $10 million for demolition.

"We knew that our chances of getting someone in there to use 2 million square feet was very remote," says Holt. "Besides, the building was obsolete. The original part was built in 1936 and it had a different ceiling. There was a basement under a large part that was really not usable. So it became apparent to us that we needed to get the facility on the ground."

The good news was that the building was full of steel and copper, recoverables whose value could cover a large part of the demolition costs if not all of it, Holt said.

"The last thing in the world we wanted was for a salvage operator to come in and strip the building and leaving us with a worthless hulk that would be an eyesore to the community," Holt says.

Lormax Stern was also onboard with the idea of razing the site, with the shared goal of finding one future manufacturer to occupy it.

"We are not looking to put up a bunch of 50,000- to 100,000-square-foot buildings on the site," Brochert says. "We are looking for a major manufacturing facility or R&D facility that is going to create living-wage jobs and replenish those jobs lost with the closing of the GM plant."

Generators of Wealth

Enter into the picture the third partner for the shared dream: The Right Place, Inc., is the local economic development organization, based in nearby Grand Rapids.

Birgit Klohs, president and CEO, jumped at the chance to be a part of a collaborative effort to transform the site with the goal of bringing back high-quality manufacturing jobs.

"This is a tremendous arrangement and it makes the three of us — the city, the developer and the economic development organization — a team in redeveloping what is one of the most critical pieces of property in our area," Klohs said.

The Right Place’s role is to market the property to industrial end users nationally and internationally, Klohs says. In short, the Right Place is to find the right company.

Because of the robust infrastructure on the site, the makeup of the community and a moral calling to bring back quality jobs, Klohs agrees that manufacturing is the correct answer.

"We want the kind of jobs that we lost. We have enough retail. Besides, retail follows good jobs. And retail is not a driver of economic wealth. Rather, it is a recipient of the drivers of economic wealth, which are job generators that export their goods or services," Klohs says.

It is an old concept that continues to ring true — that base economy jobs, those that create wealth, are found in such sectors as advanced manufacturing, life sciences, medical devices, food processing, and alternative energy. These are target areas for the Right Place.

"It is only when you have these kinds of wealth-generating jobs that you can then afford to buy things at retail establishments," Klohs says. "The city made it very clear that they will not budge from their desire for these kinds of jobs. It may take longer, but it will be worth it."

Lormax Stern is aligned with those same goals because the company wants to diversify into developing rental properties for high-tech manufacturing, company exec Brochert says.

"The type of user that is going to go into this site is going to be a Fortune 500 company or a multinational corporation that is very well financed," Brochert says. "We will enter into an absolute net where we build the building to their specifications, deliver the premises to the tenant and they will commence paying rent."

The partnership between Lormax and the City of Wyoming enables both organizations to realize goals — diversification for Lormax, a recovery of manufacturing jobs for the city.

Will Knowing How to Make
Things Make Things Happen?

Despite the attributes of the physical site and its strategic location in western Michigan — it is two hours from both Chicago and Detroit — incentives will be offered to the right party, Holt says.

"We are going to be patient. We know this is not about recovering all the jobs we lost tomorrow. This is about long-term good for the community. So we are willing to give in order to get," Holt says.

The property will be deeded to the City of Wyoming on April 1 for $1. In return, the city will be paying the property taxes. From the date, Lormax Stern has five years, with the help of The Right Place, to find a user for the property. Holt said the city would be willing to give the site away to a future manufacturer with deep pockets and a commitment to create good-paying jobs.

"We want jobs. We want good sound investment. We want commitment," Holt says.

But is that any different from what most communities nationwide want? Holt, Klohs and Brochert all concede that their common dream is indeed common for others. The difference, they say, is their exceptional site and their exceptional work force.

"We are not new to competition," Klohs says. "West Michigan has an exceptionally robust manufacturing sector in spite of what has happened in the past few years. We still have nearly 20 percent of our work force employed in manufacturing."

According to a blog maintained by Holt, such companies as Weller, Stockwell Manufacturing, Detail Technologies, Wolverine Glass and Gordon Food Service are growing their footprints and creating jobs in the community. And an announcement is planned for this month regarding a new investment by Kellogg Co.

Klohs says in the seven-county region including Grand Rapids and Wyoming, there is a population base of 1.3 million. Of the area’s nearly 2,000 manufacturing firms, 60 percent are family owned.

"That means a very different kind of work style, really a terrific work ethic," she says. "So we know our business when it comes to making a high-tech product — from optical measuring equipment to the best office furniture in the world to high-tech auto parts. We know how to do all that because we have the skills in this community — and protect it as if it were gold."

According to Klohs, the stars are aligned right for good things to happen to the Wyoming site. The dream will take longer, but it will happen. Brochert agrees.

"We are just at the threshold right now. We have a long way to go, but I believe we’re going to succeed here," he says.

Holt looks at today’s efforts to redevelop the GM property in an historical context in which his generation will be serving the next by making the dream for this property happen.

"We’ve done a great job with this city for the past 50 years. And it’s true that we have been hard hit by this economic downtown. But now we have the chance to set the bar for the next 50 years, and we don’t want to blow that. We want people living here 50 years from now to look back and recognize what a great decision we made here."


Editors note: For a glimpse of the kind of dream Wyoming would like to make come true, read "Driving Home for Thanksgiving," our report on Fisker Automotive’s location of an electric-car manufacturing operation at another shuttered GM plant in Wilmington, Del. Earlier this month Fisker welcomed another $150 million in funding to go along with $530 million from the federal government and another $325 million raised from other investors. Plans call for manufacturing to start by the fourth quarter of 2012.


Dean Barber is the president of Barber Business Advisors, an economic development and site selection consulting firm in Red Oak, Texas. He can be reached at dbarber@barberadvisors.com or at 972-890-3733.


Story in Pictures

Birgit Klohs, President and CEO, The Right Place, Inc.
Click for a larger view.
Click for a larger view.

comments powered by Disqus

Site Selection online is a worldwide service of Conway, Inc. ©1983-2017, all rights reserved.
Data is from many sources and not warranted to be accurate or current.
For contact information visit our staff page or send general information queries to Cathie Wendt.
Send direct technical inquiries or comments to webmaster bounce@conway.com. View our Privacy Policy.
HOME | SITE SELECTION MAGAZINE ARCHIVES | SUBSCRIBE