By TEREASA NIMS
Sunday Times Newspapers
ALLEN PARK — The day many residents hoped to see has arrived: Southfield Lease Properties was sold and the signatures are dry.
New York-based Time Equities Inc. completed the sale on Aug. 22.
Resident Mary Adams deemed the purchase “bittersweet,” claiming that getting more for the property would have made for a sweeter transaction.
“The taxpayers got less than half of what they paid,” Adams said. “And the person that authorized the sale is out nothing. How is that fair?”
The city purchased Unity Studios/Southfield Lease Properties in 2009 for $25.5 million in hopes of luring film makers and media production companies, but the endeavor failed after Gov. Rick Snyder capped the film incentive at $25 million in 2011 when before there was no cap.
Unity Studios moved into the facility in 2009 and vacated after one year, thus leaving the city holding the multi-million dollar debt.
TEI acquires, develops and manages commercial and residential properties throughout the United States, Canada and Germany. Company representatives said they wanted to buy 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 city officials speculating it will draw global business to Michigan.
TEI paid $3.6 million at closing and is expected to pay $8.4 million over the next 7.5 years, City Councilman Dennis Hayes said. Emergency Manger Joyce Parker said earlier that TEI plans to invest an additional $6 million to $8 million into the property. The city is using the money to pay down the debt and refinance.
During the June 12 press conference when city officials announced the possible sale, Parker said 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. She noted the city would save an additional $1.2 million by not having to pay the taxes, insurance, maintenance and utilities on the property.
Parker said then, that in addition, with the city no longer burdened by the debt payments related to the property, the sale allows the municipality to continue to move the city toward financial stability and the eventual return to local control.
Adams is happy that the property is a memory, saying it has been an Achilles’ heel for the city.
“It’s good to have it sold,” said Hayes, noting that the monkey isn’t off the city’s back just yet.
“It was unfortunate, but it happened,” Hayes said of the city’s $25 million purchase that sold for $12 million with an estimated $700,000 of the sale price going to the real estate company that handled the sale.
“It’s not over, we’ll still be paying on it for a long time,” he said.
Yet, some residents are anxious to see it gone.
“Hindsight is 20/20, and it seemed like something that would put Allen Park on the map,” said Dorothy McNabb. “That didn’t happen. The governor had other plans.”
(Tereasa Nims can be reached at [email protected].)