Derelict in Detroit, and Hard to Sell

For decades, the ruins of the Packard Motor Car plant — a collection of more than 40 crumbling buildings that make up a ghost town of graffiti and garbage and rubble — have been a symbol of Detroit’s decay and a stubborn obstacle to the revitalization of its surrounding, and tattered, east side neighborhoods.

Now with the city awaiting court approval of the biggest municipal bankruptcy in history, the decrepit plant, often referred simply as the Packard, has somehow become a hot commodity for would-be developers from as far away as South America.

Or has it? In a public auction process that has lasted months, six investment groups have bid to buy the 40-acre Packard site out of foreclosure. The two highest bidders have already dropped out for lack of money. Now the prospects for an eventual sale are murky at best.

The rebuilding of Detroit has started slowly, with corporate interests buying up vacant buildings downtown at bargain basement prices. Yet it is unclear whether dilapidated structures like the Packard can ever be part of its comeback.

The plant is among 19,000 foreclosed properties put up for auction this fall by Wayne County, which includes Detroit and several smaller cities and suburbs. On some residential streets, dozens of burned-out homes and empty lots were for sale for as little as $1,000 apiece.

The mass auction, which raised $22 million from 6,000 properties excluding the Packard, is another vivid example of how far Detroit has fallen in terms of its shrinking population and spreading abandonment.

“We have 42,000 properties in foreclosure in the county,” said David Szymanski, deputy treasurer of Wayne County. “It’s a staggering number, and there’s nothing close to it anywhere else in the country.”

And there is nothing for sale quite like the Packard.

The last Packard automobile was built there in the 1950s. Since then, small businesses have come and gone at the site, but mostly the plant has been a haven for urban explorers, scavengers and people illegally dumping trash. Its previous owner went to prison for dealing drugs from an abandoned school nearby.

The plant’s cavernous, post-apocalyptic interiors are known around the world, having been featured in movies, music videos, news reports and thousands of YouTube segments. Over the years it has become a scarred monument to Detroit’s heyday as the Motor City, and a gut-wrenching reminder of its sad decline.

“It’s a beacon of destruction that people seem drawn to,” said Robin Boyle, a professor of urban studies at Wayne State University in Detroit. “It’s a bit like going to a museum and you can’t take your eyes off this one piece.”

Residents view the plant as more of a menace than an eyesore. Fires routinely break out inside its walls, but city firefighters have stopped responding because of dangerous structural conditions there. Last month, the body of a murdered Wayne State law student was found in a sport utility vehicle a few blocks away.

“It’s just a devastating situation,” said Toni McIlwain, a community organizer in the area. “People are always asking when this blight will turn into something useful.”

But useful does not necessarily mean feasible.

A developer from Illinois, William Hults, began negotiating this year to buy the plant from the county for about $1 million — the amount of unpaid taxes that had accrued.

Mr. Hults envisioned restoring parts of the factory and transforming it into a complex of residential units, shops, restaurants and a hotel. But when he was unable to come up with the money after missing multiple deadlines, the Packard went on the county auction rolls in September.

The auction has since become a spectacle in a city weary of bad news.

The highest bidder was a Texas doctor, Jill Van Horn, who inexplicably offered $6 million for the property and said she wanted to manufacture modular homes at the plant. When she was unable to put down a 10 percent deposit, the county turned back to Mr. Hults, who had submitted a $2 million bid.

Mr. Hults made a deposit of $200,000, but failed to raise the rest of the cash. He has since turned his attention to rehabilitating an old automotive stamping plant on the east side.

“I believed in the Packard project and I still believe in it,” Mr. Hults said. “I rolled the dice, but it just didn’t work out.”

The county has moved on to the next-highest bidder, Fernando Palazuelo, a Spanish-born developer who has a record of rehabbing historical buildings in Lima, Peru.

On Wednesday, Mr. Palazuelo gave the county a $40,000 deposit on his $405,000 bid, and has until Dec. 18 to submit the balance. In an email exchange on Thursday, Mr. Palazuelo declined to divulge his plans for the Packard, but said he was traveling to Detroit next week for meetings on the project.

Mr. Szymanski, the deputy county treasurer, said he had avoided analyzing whether the various bidders had the resources or experience to restore the Packard.

“We’re just trying to find somebody who can perform,” he said. “We’ve got a deliberative process here, and if somebody can’t do the deal, we will move on to the next bidder.”

The price tag to rebuild the Packard would be enormous. Mr. Hults estimated the cost of his long-term plan at more than $300 million. Demolishing the structures and clearing the property alone could run as high as $20 million.

Professor Boyle said developers believing they could save the Packard were “dreamers,” and he bemoaned the attention being paid to the plant that could go toward other, more promising sections of the city.

“My concern is the Packard plant is one of those fanciful ideas that deflect attention from real opportunities in Detroit,” he said. “I’m at a loss from a rational perspective to explain the interest.”

There is little patience left in Detroit for grandiose development schemes, or promises that can’t be kept.

Any day now, a federal judge will issue a ruling on whether the city is eligible for bankruptcy and can begin the arduous process of settling its debts, improving services and digging out of its huge financial hole.

“People have been waiting for something to be done with the Packard for years,” said Luther Keith, head of the Arise Detroit community group. “Plans are a dime a dozen. Just put down the money, and do it.”