DETROIT, MI - Six years ago local, state and federal officials cut the ribbon on a $17 million project that was to be Southwest Detroit's "premier office and retail development."

Today, the gleaming,13,000-square-foot Mercado building sits empty, as does much of the 30,000-square-foot structure across the street that houses a Michigan Welcome Center and a DTE Energy office at the corner of 20th Street and Bagley Avenue.

Empty buildings in Detroit are as common as squirrels in Clark Park, but not brand new ones like these, and they are costing the city millions of dollars in loan repayments.

Those with knowledge of the project say it was doomed from the start, with overly complicated financing packages, and with the new buildings asking for tenants just as construction began on the $230 million Gateway project in the area.

"I think this project was one of those projects that had significant challenges from the beginning," said Karla Henderson, group executive for planning and facilities for the City of Detroit. "As you know, development in the city of Detroit takes multiple resources and lots of partners. I think there was some miscommunication, some mistrust among the partners. It was like one of those perfect storms of everything that could have gone wrong went wrong with the project."

Now, the effort is getting new life, Henderson and others insists, as the city and partners involved with the Mercado and Welcome Center expect to announce an agreement and ultimately a plan for the buildings within the next 60 days.

"The mayor has a vested interest in getting that building back open," she said of the Mercado. "We are very close to working out the details of what that means."

Although the city does not own the building, it has been making loan payments on behalf of the Mexicantown Community Development Corporation, which is the proprietor, and which undertook the Mercado and Welcome Center effort as its signature project.

In August, the city paid a $4.2 million balloon payment on the property. The city has been borrowing against a Community Development Block Grant to help the MCDC pay for the project.

"The city has a significant amount of debt on that building," Henderson said, adding that it has been trying to renegotiate a Section 108 Loan on both properties.

Regardless, the city remains optimistic for the buildings and their surroundings now that the Gateway project is nearly complete, and a casual stroll through the area may appease even the most cynical of people in this regard. The landscape is well-kept, the streets are clean and the $5 million Bagley Pedestrian Bridge is a pristine structure, connecting two areas of Mexicantown that have colorful restaurants and shops.

The only thing missing from the area is pedestrians.

That should be changing soon, said Hector Hernandez, chair emeritus of the MCDC.

"We're moving on a fast track to negotiate something with the city and a third party foundation," Hernandez said, echoing Henderson's assertion that a concrete direction should be settled within two months. "I think we're all in agreement that we can hammer something out soon."

Neither Hernandez nor Henderson would name the third party involved in the talks.

Asked why the buildings have sat empty for so long, Hernandez said, "Boy, there's a number of different reasons. You'd really have to trace back to 2008. There's a litany of reasons, from construction issues to just the multitude of players that were involved in this."

Financing for the project came in the form of New Market Tax Credits, brownfield development tax credits and an Economic Development Administration grant.

"This is probably as complicated of a project, for financial structure, as there was at that time," Hernandez said.

With "that many players at the table," a cohesive direction was difficult to attain, he said. Then the construction of the Gateway project, which connects the area interstates with the Ambassador Bridge, and which opened to vehicles last week, "killed off foot traffic."

There was an apparent breakdown at the MCDC too, and both Henderson and Hernandez said that the non-profit has since been restructuring its board of directors.

In any case, the Mercado and Welcome Center are still seen as key to turning around an otherwise ill-fated project, Hernandez said. And the large plaza in between the buildings could be the maypole of a broader redevelopment of the 20-block area surrounding Vernor Highway and Interstate 75, he said, pointing to a "Mexicantown: Vernor/Bagley Vista" plan compiled by Dan Pitera and the Detroit Collaborative Design Center at the University of Detroit Mercy School of Architecture.

"Everything from art, cinema, shopping, food, entertainment. That's what's envisioned," Hernandez said. "It's not going to happen tomorrow. But that space can be an activity hub for this community, for graduations, for festivals, for art fairs – you name it. We hope this can be done in the coming year."