By TEREASA NIMS
Sunday Times Newspapers
ALLEN PARK — Many are hopeful, others are skeptical, but city officials were mostly smiles Thursday when they announced a $12 million purchase of the failed Unity Studios property to a New York company.
“This is a really good day for the city,” Emergency Manager Joyce Parker said.
Full-service real estate firm, Time Equities Inc., entered into a purchase agreement with the city in hopes of buying the property for mixed use. TEI put $250,000 into escrow Wednesday.
It has up to 45 days to do evaluations on the 104-acre property. It could opt out of the deal after evaluations are complete.
“This isn’t a done deal,” one resident said. “The dotted line isn’t signed.”
Should TEI back out, there are buyers in Canada and California interested in the property. Their dollar amount offers aren’t known.
The city purchased Unity Studios/Southfield Lease Properties in 2009 for $25.5 million in hopes of luring film makers and media production, but the endeavor failed. Unity Studios moved into the facility and vacated after one year, thus leaving the city holding the multi-million dollar debt.
“The proposed sale closed the chapter on a very unfortunate moment in Allen Park’s rich history,” Parker said.
TEI acquires, develops and manages commercial and residential properties throughout the United States, Canada and Germany. It proposes using the property at 16630 Southfield Road for retail, office and industrial uses.
TEI, a 50-year-old company, owns three other properties in Michigan. The company also has ties to Germany and Canada leaving some to believe it will draw global business to Michigan.
Should TEI buy the property, it will pay $3.6 million at closing and $8.4 million over the next 7.5 years. It also plans to invest an additional $6 million to $8 million into the property.
“I think it is wonderful,” resident Sue Ford said. “We need to move forward.
“It’s disappointing we only get half of what we paid but we need to move forward,” she added.
Resident Chris Cook also agreed it would be nice to put the failed movie studio complex behind and look to the future.
If the deal reaches fruition, the city is off the hook for some stiff expenses.
“The future debt service based on refinancing is $1.2 million in comparison to the current annual amount of $2.6 million paid from the general operating and Southfield Lease fund,” Parker said.
The city would save an additional $1.2 million by not having to pay the taxes, insurance, maintenance and utilities on the property.
“In addition, with the city no longer burdened by the debt payments related to the property,” Parker said, “the sale allows us to continue to move the city toward financial stability and the eventual return to local control.”
Even Mayor William Matakas was smiling at the press conference announcing the potential purchase.
“We’re not going to get out of the hole,” Matakas said, “but it keeps us from digging a deeper hole. I couldn’t be more pleased.
(Tereasa Nims can be reached at [email protected].)