Deal to sell heavily polluted site supported by city of Trenton

Requirements would include spending at least $20 million on site over 72 months

Crown Enterprises says site could be industrial, logistics hub

Wayne County Executive Warren Evans' administration is recommending county commissioners sell the former McLouth Steel site in Trenton to billionaire trucking mogul Manuel "Matty" Moroun's real estate firm for possible redevelopment.

Evans wants the Wayne County Commission to approve a $4 million offer from Moroun's Crown Enterprises Inc. for the 180-acre site that has sat vacant since 1996, said Khalil Rahal, executive director of economic development for Wayne County.

Warren-based Crown Enterprises has signed a purchase and redevelopment agreement with the county that calls for them to spend at least $20 million over 72 months.

The $4 million would cover about $3.88 million in unpaid property taxes dating back to 2006 that triggered the Wayne County treasurer to foreclose on the previous owner, Detroit Steel Co. LLC, in March, Rahal said.

Trenton's City Council and mayor favored the offer from Crown Enterprises over three other bids. In June, the city of Trenton had gotten approval from the Michigan Strategic Fund to borrow $3.2 million to buy the property "just in case" a private purchase agreement fell through, Rahal said.

"Our decision is based on what the city of Trenton wants," Rahal told Crain's.

Wayne County also wanted to avoid letting the property go to the county treasurer's auction in November, where a speculator could snatch it up for less than nearly $3.9 million in unpaid taxes owed to the county and local municipalities.

Crown Enterprises has some recent experience redeveloping large industrial sites.

The company built two logistics facilities at the I-94 Industrial Park in Detroit and is in the middle of building a car-shipping logistics hub for FCA US LLC's Jefferson North Assembly Plant. In June, Crown Enterprises had a portion of the former Budd Wheel plant imploded to make room for FCA's logistics needs.

"They've got the means to deal with whatever environmental hiccups that may come up," Rahal said. "And they've got the ability to get into the room with the some of the biggest companies in the world to attract them there."

The Moroun-owned firm has already made a $4 million deposit in escrow and waived its right to cancel the deal by a Thursday deadline to counter rumors it was going to back out, said Michael Samhat, president of Crown Enterprises.

"I don't know who started (the rumors), but I was ready to commit the money," Samhat said.

Crown Enterprises can't get its money back. "The money is non-refundable as of right now," Rahal said.

Pending the commission's approval, the development agreement gives Crown Enterprises until the end of the year to take title on the property.

That depends on the company coming to an agreement with the U.S. Environmental Protection Agency on cleanup responsibilities at the heavily contaminated site at 1491 W. Jefferson Ave. on the north side of Trenton, Samhat said.

The city of Trenton will have to seek a state recommendation to EPA Region 5 that the steel plant should be a Superfund site, Samhat said.

If the EPA grants the site Superfund status, Crown Enterprises will go forward with abating the existing buildings of contaminants and demolishing the 1 million-square-foot main structure of the shuttered steel plant. Samhat estimates the demolition could cost upwards of $6 million alone.

The deal gives Wayne County the power to fine Crown Enterprises $1 million for falling short of the $20 million spending commitment — or sitting on the property, which Moroun's companies are often criticized for doing.

"If they fall $1 short, they have to pay $1 million," Rahal said. "There's no (tax) incentives that are part of this deal."

Under the purchase agreement, Crown Enterprises will make a $250,000 donation to the city of Trenton at a later stage in the redevelopment, Samhat said.

The old McLouth Steel plant site has three railroad lines, a deep water port along the Detroit River and proximity to I-75 and the Detroit Metro Airport, Rahal said.

"There's only four ways to ship things, right? By road, by rail, by air, by sea — and this property is really close to all four of those attributes," he said. "It's a really beautiful logistical site."

But redeveloping the site has been a challenge because of a half-century of pollution from steel plant, Rahal said.

"Depending on what you want to build there, you don't know what it's going to cost or how much it's going to be," he said.

Crown Enterprises already owns 76 acres on the north side of the plant's property that the Morouns purchased in 2000, Samhat said.

The 256-acre site could be marketed for a multimodal logistics hub, a cluster of manufacturing plants, a finished car shipping center for multiple brands or an auto assembly plant, Samhat said.

"I want to underpromise and overperform," Samhat said. "This is a big site."

The Wayne County Commission's Committee of the Whole meets at 10 a.m. Wednesday at the Guardian Building for the first of two possible votes. If approved Wednesday, a final vote would be taken Thursday.