By SUE SUCHYTA
Sunday Times Newspapers
RIVERVIEW – Logistics company W.F. Whelan approached city officials for help obtaining grants and tax relief to remediate the toxins in the Materials Processing Inc. building, which it may purchase to renovate.
W.F. Whelan Co., based in Canton Township with facilities in Romulus, specializes in distribution and warehousing. It hopes to begin a renovation of the building, now owned by MPI, 17423 W. Jefferson, in the spring to house an automotive materials warehouse.
At the Dec. 12 City Council study session, Community Development Director Dave Scurto, with Whelan President and CEO Brian Whelan and attorney John Byl present, said W.F. Whelan is looking to expand its distribution capability, and the renovated warehouse will bring jobs to the city. However, the building needs to be modernized, which will require extensive hazardous material remediation.
“There is quite a lot of asbestos in it, there is some environmental remediation, there is some demolition that has to occur,” Scurto said. “So they are coming here for city assistance to help offset some of these costs.”
Scurto said the first of three steps is for the city to create a Plant Rehabilitation District for the site, which would create a 12-year tax abatement under an Industrial Facilities Tax exemption certificate from the Michigan Department of the Treasury. The abatement would be for the building, not the land.
The second step is to ask the city’s Brownfield Redevelopment Authority to reimburse the company, to the extent that tax capture will allow, for the cost of environmental remediation.
“We can capture tax increases after the 12-year period when the property value starts going up,” Scurto said. “The Brownfield Authority, by state law, can keep the increase in taxes and reimburse for the environmental cleanup of the property.”
Byl said additional subsequent investment in the vicinity would not be subject to the freeze, and would immediately increase the taxable value of the property.
Scurto said the third step is for the city, in conjunction with the Economic Development Corporation, to pursue Michigan Department of Environmental Quality grants or loans to supplement the environmental remediation costs.
Byl said a municipality serves as a conduit from the state for MDEQ grants and loans for cleanup expenses.
“We have asked for the maximum, which is $2 million, and given the limited funds that are available at the state, it is doubtful that we will get that much,” Byl said.
Whelan said he will seek a “hold harmless” agreement with either the city or the EDC for the loans, and will pay the debt service on the city’s behalf.
Byl said there is building renovation unrelated to toxins.
“There is going to be exterior work, and a complete replacement of the roof,” Byl said, “and so there is going to be a substantial amount of investment here to upgrade and renovate this old building.”
Whelan said they have stored materials in the building for 21 years, so the family owned business already has a relationship with the location.
Byl said they are not asking the city directly for money or a bond issue.
“We have found in the course of doing our due diligence that there is a lot of contamination here,” Byl said. “It is not only in the soil everywhere, but we also have contamination beneath the slab of the floor of the building. There are vapors there, chlorinated solvents.”
Byl said they have to put in a sub-slab venting system, and the environmental cleanup alone, separate from the other renovation of the building, is at least $3 million.
MPI will remain a tenant in the building, which Byl said is currently under-utilized.
Councilwoman Lynn Blanchette asked if the MPI employees are exposed to hazardous chemicals.
Byl said the solvents are below the slab, so it currently does not impact the work space.
“It is important that we take measures that it doesn’t get into the workplace,” Byl said. “The asbestos is not exposed, but as soon as we start to do rehab work, you are going to run into a lot of asbestos.”
Byl said if W.F. Whelan received no grant or loan money for hazardous material remediation, it would be a problem.
Councilman Bill Towle asked if they have a “walk away number” which would cause them to reconsider the building renovation.
“We are still working our budget a little bit,” Byl said.
Byl said the total abatement and environmental expenses are a lot more than they originally anticipated. He said the original portion of the Albert Kahn-designed building has been there since the 1920s, and was originally a Firestone plant.
Tom Coffey said he worked at the site in the 1960s, when degreasing chemicals were used in the building.
Whelan said they are considering putting the rail line back in, and the warehouse would have traffic from 40 to 50 semi-trailer trucks per business day.
He said initially the warehouse will bring in 25 to 35 new employees.
Whelan said they don’t plan to bring materials in by barge, but it could happen it the future.
(Sue Suchyta can be reached at [email protected])