JC Reindl

Detroit Free Press

The much-anticipated redevelopment of Detroit's old Packard Plant, long an emblem of the city's industrial glories and their subsequent fade, is set to begin next month with a groundbreaking on the first of four planned phases.

The May 16 groundbreaking ceremony will be open to the public. It will take place outside a four-story building at the factory site that once housed the defunct automaker's administrative offices, said Kari Smith, director of development for Arte Express Detroit, the firm belonging to plant owner Fernando Palazuelo. Palazuelo, a developer who makes his home in Lima, Peru, will be on hand for the festivities.

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Detroit's long-awaited Packard Plant redevelopment could start in spring

This roughly $16-million first phase aims to transform the blighted 121,000-square-foot administrative building, 1580 E. Grand Blvd., into new commercial office space. Redevelopment is expected to take 18 to 24 months, Smith said, adding that a half-dozen tenants are already lined up with room left for about four more.

“This is a huge deal," Smith said. "It marks the beginning of several years of predevelopment activities and a lot of waiting and proving that Arte Express is here to revitalize the Packard Plant."

Palazuelo's ultimate goal is to turn the desolate 40-acre site on Detroit's east side into a thriving center of commerce and cultural activities over a period of 10 to 15 years.

Smith said that financing for this initial phase will involve a mix of private equity funding from Palazuelo's companies, tax credits, a $300,000 Wayne County loan, an $80,000 county grant and a $5.2-million brownfield environmental cleanup that calls for reimbursing that amount to Arte Express over a period of years.

Confirmed tenants include an engineering and consulting company, a security firm, a job training program and the Lazybones Smokehouse restaurant, among others.

The ground floor of the administration building, once redone, will also feature a gallery and an event space that could handle wedding receptions.

“We have a lot of people who would like to rent the event space for wedding receptions," Smith said. "That is surprising to some, but we do get those inquiries quite often.”

The later phases of redevelopment call for a recreational complex across East Grand Boulevard from the administration building; artist live-work spaces; and a partnership with renowned Berlin techno club owner Dimitri Hegemann to rehab a seven-story building for a music venue, large hostel, another restaurant and even a European-style spa.

Other possibilities mentioned in the past include a Packard car museum, more residential space, light manufacturing and distribution facilities and perhaps a Tommy (Hitman) Hearns boxing gym.

Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @JCReindl.