A group that's been pushing for a grassroots redevelopment of the old Michigan state fairgrounds site in Detroit isn't jumping for joy at a proposed plan to put the land back to use.
The State Fairgrounds Development Coalition says it has "serious concerns" about community involvement in the process, as well as about the jobs Amazon.com Inc. could bring to the site in a proposed deal with developers Detroit-based Sterling Group and Dallas-based Hillwood Enterprises LP.
The criticism comes after the announcement last week by Mayor Mike Duggan, with support from City Council members Roy McCalister, Janeé Ayers and André Spivey.
In the proposed project, the Seattle-based e-commerce behemoth would occupy a 3.8 million-square-foot, $400 million new distribution center built on 78 acres of the fairgrounds site at Woodward Avenue and Eight Mile Road at the city's northern border. Sterling Group and Hillwood would pay the city $9 million for the entire 142-acre site and no city tax breaks or incentives would be involved. The city bought the site in 2018 for $7 million. The remaining acreage is also targeted for industrial use.
City Council is expected to start considering the purchase agreement next month, when it returns from summer recess. Sterling Group and Hillwood want to get shovels in the ground in October in order to finish construction in 2022.
But what would be the largest Amazon warehouse and distribution center in the region isn't going unchallenged.
The State Fairgrounds Development Coalition, which was founded to rally for a community-accessible future at the vacant site, says it wasn't involved in the planning process like a city spokesman said the community would be when Detroit bought the land, according an emailed statement by the coalition. Duggan said during a speech last week that the site deal had been in the works for "the last year," but coalition steering committee member Tonya Myers Phillips said the group was given notice less than a day before the news conference Aug. 11.
"That was extremely disappointing and frustrating," said Phillips, also an attorney with the Sugar Law Center in Detroit. "The coalition has been working on this issue extensively for eight years … (We) have retained architects and planners on a pro bono basis to look at community plans … I just can't understand why the administration would work on this for over a year ... It just blows my mind. But we're certainly going to offer our thoughts and our suggestions."
What could help at this point, the coalition says, is implementation of a community benefits agreement.
The developers are not legally obliged to adhere to the city's Community Benefits Ordinance, which aims to mitigate negative impact on residents surrounding a big development. The law applies to development projects totaling $75 million or more if they receive $1 million or more in city tax incentives or land valued at $1 million or more — which Sterling Group and Hillwood will not, per a city spokesman.
Some activists and economist have bemoaned the use of tax incentives to draw in big developers. Dearborn-based Ford Motor Co. got $104 million in city tax breaks approved for its Corktown campus. In this case, the coalition is concerned the lack of incentives may be a detriment in one sense, because the project doesn't trigger mandated engagement with residents.
The coalition also points out that Detroiters aren't assured a percentage of Amazon jobs — just priority for applying, per an agreement similar to one instituted for FCA US LLC's east-side Detroit plants.
Duggan has also said historic fairgrounds buildings would need to be demolished. The site's Michigan State Fair Riding Coliseum, Dairy Cattle Building and Agricultural Building are in the National Register of Historic Places, added in 1980.
"The heritage of the Fairgrounds will be completely erased," the coalition said in the statement. It also criticized a lack of affordable housing and lack of public space, other than a new $7 million transit center.
"With the history of this site being a fairgrounds, where people from all communities and all background could come together, it doesn't seem fitting," Phillips said. "The transit station is a welcome improvement, but I think we also have to be very real in acknowledging the benefit to Amazon in having a facility to transport people back and forth to work right at their doorstep, and I think the community should get a little more out of it."
Duggan said last week truck that traffic from Amazon would be directed to Eight Mile Road and separate from State Fair Avenue to the south of the site, where the mayor said he wants to see more housing built. There were no specific housing plans discussed, however.
Sterling Group declined to comment to Crain's for previous reports on the Amazon project and Hillwood did not respond to a request for comment.
An Amazon representative declined to speak with Crain's, but said in a statement that the company looks "forward to continuing to work with the City of Detroit and, if the project is approved, our plan is to create over a thousand new jobs."
The purchase agreement says the tenant must employ no fewer than 1,200 within a year of the project's completion.
McCalister, the Detroit City Council member representing the district where the fairgrounds is located, spoke in support at last week's news conference. He told Crain's on Tuesday that he has been speaking with the coalition, but supports the Amazon project he's been presented.
It's pitched as a job creator, with the city training Detroiters and promoting entrepreneurship as independent Amazon delivery service companies.
Duggan also said the developers agreed to voluntarily adhere to an executive order that requires publicly funded construction projects use Detroiters for 51 percent of hours worked in the building process, or pay fines. However, according to the text of the current proposed property purchase agreement with the city, this will apply only to the construction of the Amazon facility and not future construction on the rest of the land. The penalties won't apply to specifically sheet metal and iron workers, though, according to the agreement. And companies can also circumvent the notoriously difficult-to-meet requirement by working with skilled trades unions that commit to recruiting Detroiters.
"I was not a part of the negotiations so there are things I'm still reading and research I'm still doing regarding this," McCalister said of the overall deal. "But what I am for is if there's opportunity for people to be trained, get certifications, receive jobs, have their own businesses ..."
He hasn't talked with any Amazon representatives, though, he said. He hopes the company will go before City Council to present plans and answer queries. He questions whether Amazon — which isn't named in the developers' purchase agreement with the city — will adhere to all the promises the developers have made. He also wants to ask what Amazon is doing to keep workers safe, he said.
The e-commerce behemoth has been protested and criticized for its treatment of workers during and before the coronavirus crisis. Complaints reported in national media outlets range from high injury rates to lack of adequate pandemic safety precautions.
While acknowledging concerns, McCalister's underlying argument is that this is the best deal on the table.
The site has been mostly unused since the fair left in 2009. An attempt at a residential, office, retail and entertainment development there in 2013 fell apart. And McCalister said a plan conceived in 2011 and 2012 for a Michigan Energy Technology Agriculture expo failed to gain traction with financial backers.
Meanwhile, a new ownership group that includes NBA and Michigan State University legend Earvin "Magic" Johnson is coming together for 16 acres of the overall 158-acre site, years after first announcing a plan that has yet to come to fruition.
"I would have loved for the META expo, or the state fairgrounds to be a tourist site, because the state fairgrounds really touches Wayne, Oakland, Macomb counties," McCalister said. "... but on the other hand we cannot let the grounds just sit there."
Phillips said she disagrees with the argument that Amazon was the best option available — she said there could have been more ideas if Duggan's administration had negotiated more publicly.
"It just goes to the nature of closed-door discussions and negotiations that city officials are doing," she said.
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Amazon fairgrounds plan sees pushback over use, community engagement - Crain's Detroit Business
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