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Packard plant at risk of foreclosure again

Published in blog.hemmings.com

The Packard plant in August 2018. Image courtesy Google Street View.

The collapsed production-line bridge at the former Packard plant may turn out to be a trifling worry to the current owner of the plant, who now faces foreclosure on the complex for hundreds of thousands of dollars in back taxes just five years after purchasing it.

According to a Wayne County Treasurer’s Office statement to the Detroit Free Press over the weekend, all Packard plant properties owned by developer Fernando Palazuelo’s Arte Express have unpaid taxes starting in 2016; because Michigan state law allows foreclosure on properties with unpaid taxes for three years, that means the county may now foreclose on the Packard plant yet again.

While the Free Press reported that Arte Express owed $185,000 in unpaid taxes, Daily Detroit‘s tally of Arte Express properties via Loveland showed about $300,000 in unpaid taxes on properties subject to foreclosure as of August 2018.

As Arte Express spokesperson Joe Kopietz told both the Free Press and Daily Detroit, the unpaid taxes stem from delinquent water bills caused by a change in how the city calculated stormwater drainage charges and that those fees were then added to Arte Express’s tax bill.

Kopietz said that Arte Express intends to pay the bills in full in the next month. “No worry about it going into the foreclosure process,” he told Daily Detroit.

Until March 31, the Wayne County Treasurer’s Office will accept payments on unpaid taxes or work with property owners on payment plans. After that time, the office will begin foreclosure proceedings.

The Wayne County Treasurer’s Office previously handled the foreclosure and sale of the dozens of individual properties that make up the former Packard plant when Palazuelo bought the properties in late 2013 for $405,000. During a holdup caused by disputes over the properties’ ownership in 2014, Palazuelo also accumulated about $92,000 in unpaid taxes, which he reportedly paid after resolving that dispute.

One property in the center of the sprawling complex — the lot bounded by East Grand Boulevard, Concord Street, East Palmer Avenue, and Bellevue Street that once supported the southern half of the East Grand Avenue production-line bridge — remains in the city of Detroit’s possession. That lot currently has more than $57,000 in back taxes, though it does not appear subject to foreclosure this year.

While Packard discontinued production at the plant in the mid-Fifties, other businesses operated out of the crumbling complex as late as the early part of this decade.

While Palazuelo and Arte Express have announced up to half-a-billion dollars’ worth of redevelopment and restoration of the Packard plant, financed in part by a 12-year tax freeze from the city of Detroit and a loan and a grant from Wayne County (and even held a groundbreaking for the first phase of construction in May 2017), Arte Express has to date secured and cleaned up portions of the complex but has not completed any construction, according to the Free Press.