After more than a decade of failed attempts, the old Michigan State Fairgrounds is finally be redeveloped with plans to build an Amazon distribution center.
Under the proposal, Amazon would invest $400 million to build a 3.8-million-square-foot distribution center at the site, bringing at least 1,200 new jobs to the city, Detroit Mayor Mike Duggan said at a news conference Tuesday. The distribution center is expected to open in 2022, and employees will make a minimum of $15 an hour, plus benefits, Duggan said.
Amazon will not pursue any tax breaks or incentives for the project, Duggan said
"This was the single largest development property left in the City of Detroit and what Detroiters need are jobs," Duggan said. "We need good-paying jobs and jobs of the future. It (the property) cost us $7 million and I wanted control of this site."
The City of Detroit has agreed to sell the portion of the State Fairgrounds at Woodward Avenue and 8 Mile that it owns for $9 million to the real estate company The Sterling Group, founded by TCF Bank Executive Chairman Gary Torgow and now run by his adult children.
More: Historic Michigan State Fairgrounds buildings to be razed for Amazon warehouse
The Sterling Group and Hillwood Investment Properties will buy and develop the site. They've worked together before, building an Amazon distribution site in Shelby Township.
As part of the deal, the Sterling Group and Hillwood will pay for a $7 million Detroit Department of Transportation transit center. The indoor transit center will have heat and air conditioning, bathrooms, and free Wi-Fi, Duggan said.
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Plan could bring thousands of jobs
The announcement ends a long-running bid by Duggan to recruit a "major employer or a group of employers" and bring thousands of jobs to the site.
But this project almost fell through after Hillman and Amazon wanted to take up all of the 140 acres for the distribution center.
"I said, 'That's how you use suburban land, you build out on one or two stories and you take up the entire property," he said. "This is the last large parcel of land the City of Detroit has."
Talks broke down for awhile, and then Hillman and Amazon agreed to build a four-story building on about half of the site, something Amazon typically wouldn’t do, said Duggan.
Duggan said that freed up other sites for future development, pointing to the city's success at landing auto parts plants as what potentially could be built there.
But the jobs Amazon are bringing are key, Duggan said.
"Amazon jobs are jobs of the future," he said. "People want packages delivered to their homes. This helps to diversify the city’s economy."
Duggan said the city will give Amazon lists of qualified Detroiters to fill these jobs. The city also is opening what it calls the "Detroit Entrepreneurship Academy" in response to Amazon's program that offers people the chance to run their own delivery business and partner with Amazon.
"If you want to own your own truck, run your own company and hire your own people, we're going to get you ready for that opportunity as well," Duggan said.
Changing hands
Some of the land at the old State Fairgrounds is owned by basketball legend Earvin "Magic" Johnson. He heads an investment group that has talked about redeveloping the fairgrounds for more than six years.
Last year, the investment group, called Magic Plus, finally bought a portion of the fairgrounds from the Michigan Land Bank, but not the full 160 acres it once intended to. Duggan said he doesn't know what their plans are for that portion of the land.
Detroit bought the remaining 142 acres from the land bank for $7 million two years ago. The state fair left the fairgrounds in 2009.
More: 10 more Detroit projects that were announced — but haven't happened
The deal is pending City Council approval. If approved in September, construction could start in October, said Elie Torgow, CEO of the Sterling Group.
Contact Adrienne Roberts: amroberts@freepress.com.
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