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$80 million in funding falls through for Packard plant renovation; owner vows to press on regardless

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Image courtesy Google Street View.

Despite the loss of a major financial backer for his renovation of the once-abandoned Packard plant in Detroit, owner Fernando Palazuelo said he intends to continue with the renovation, aiming to reopen the plant’s administration building next year.

As reported by Crain’s Detroit earlier this week, an unnamed Peruvian private equity firm backed out of an $80 million financing agreement with Palazuelo, broadly citing “concerns over the broader global economy.”

“This investment fund has been affected by the slowdown of the global economy and is afraid about real estate, and our capital core has been completely canceled,” Palazuelo told Crain’s.

In the stead of that financing, Palazuelo, who bought the Packard plant at a foreclosure auction in December 2013 for $405,000, said he will pay for some of the ongoing work himself. In total, Palazuelo has estimated that the renovation of the 40-acre plant into a multi-use space will take as long as a decade and will cost anywhere from  $300 million up to $500 million.

Work on the plant began not long after Palazuelo bought it and dealt with various lingering issues. Much of the debris has been cleared away, some of the more unstable portions of the plant have been demolished, and what’s left has been stabilized. The bridge over East Grand Avenue has even received a temporary facade meant to evoke its appearance in the days before Packard discontinued production at the plant in 1956.

The initial phase of the renovation, turning the former administration building into corporate offices, is expected to last until early next year. Palazuelo has retained Albert Kahn Associates, the architectural firm named for the man who originally designed the Packard plant in 1903, to assist with the partial restoration of the plant.

In the meantime, one of the world’s most prestigious architecture shows, the Venice Biennale, will take a look at the Packard plant’s possibilities as part of a focus on Detroit architecture. Curated by the University of Michigan’s Taubman College of Architecture and Urban Planning, the United States’s pavilion at the Biennale will include concepts from 12 architectural teams focused on four Detroit sites: the Packard plant, the Dequindre Cut/Eastern Market District, the West Vernor Highway, and the Post Office building near downtown.

Ann Arbor-based T+E+A+M, one of the groups reimagining the Packard plant, said that it wants to create a vision that “helps people imagine Detroit architecture not as ruins, but as material resources for building a new future.”

Concepts for the exhibit will be due at the end of this month and will go on display in Venice from May 28 to November 27. Organizers of the exhibit have said they want to display the concepts in Detroit following the Biennale.