Michigan to spend $19M for ‘last piece’ to redevelop ex-GM plant in Lansing

• Lansing has waited for years for redevelopment at the site of a demolished General Motors factory
• Michigan taxpayers have spent millions remediating former factories and will spend another $19M to remove debris and contamination 
• Lansing officials hope the work will make the site ready for electric vehicle manufacturing

LANSING — Nineteen years after the last Pontiac Grand Am body rolled off of a General Motors’ assembly line here, Michigan this week committed $19 million to help bring manufacturing back to the razed facility.

The money comes atop millions already committed by taxpayers to clean abandoned GM factories in and around Lansing, but economic developers say they hope the property — still known as Fisher Body — can be reborn as part of the region’s growing electric vehicle manufacturing network now anchored by GM’s $2.6 billion Ultium Cells EV battery factory in nearby Delta Township.

But first, city and state officials say more public money is needed to finally clean what GM left behind when it closed the factory in 2005, then demolished and abandoned it.

“The buildings came down, but the underground concrete, infrastructure and contamination is all still there,” Lansing Mayor Andy Schor told Bridge Michigan. 

“So it's hard to get someone to come in and build on it, when there has to be millions of dollars worth of cleanup done first.”

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Toward that end, the city will use its new $19 million grant from the Michigan Strategic Fund, the state’s public funding arm for economic development, which on Tuesday doled out $87.5 million across 18 communities to increase the number of development-ready properties in the state. 

Lansing’s award was the largest, and officials said they hope it provides the final push to redevelop the polluted property.

“We see this as the last piece that's missing,” said Terri Fitzpatrick, real estate development office for the Michigan Economic Development Corp., the business recruiting office that recommended the grant approval.

Auto industry contamination is an expensive environmental concern in Michigan, causing at least $259 million in publicly funded environmental cleanups at 100 abandoned properties statewide, according to an analysis by Bridge Michigan. The true cost to remove contaminants is likely much higher, Bridge found.

The situation has prompted attempts at polluter-pay reform from Michigan Democrats. Last fall, they introduced seven bills to hold industrial polluters more accountable by strengthening cleanup laws and mandating that certain industries carry insurance to cover potential contamination costs.

The $19 million for Fisher Body follows extensive, publicly subsidized cleanups of former GM properties in Lansing, including $3 million to clean 57 acres abandoned during the automaker’s 2008 bankruptcy.

In nearby Lansing Township, another $21 million has been spent at two adjacent former GM factory sites to control contaminants such as 1,4 Dioxane and PFAS, two chemicals linked to cancer. 

Missouri-based NorthPoint Development put all three Lansing-area GM sites under contract in 2016, but still hasn’t finalized a purchase from owner RACER Trust, which was formed to deal with former GM properties.

NorthPoint officials told Bridge in summer 2023 that years of marketing hadn’t yielded a deal. 

Schor, the Lansing mayor, said company officials more recently told the city that they “can’t do anything until the property is … cleaned up and clear.” 

“So what we're doing is bringing it back to a place where it can be developed.”

Post-bankruptcy

All told, General Motors shed 89 properties during its 2008 bankruptcy, along with the liability for cleaning them up.

Federal bankruptcy court reached a settlement with the automaker, which as the “New GM” was immediately allowed to buy back factories, offices and land that it wanted. In Lansing, that included the Grand River Assembly factory and Lansing Delta Township, which makes SUVs.

The rest of the automaker’s real estate went into RACER Trust, which since 2011 has been charged with selling former GM properties and using a multi-million budget settlement to contain contamination on the properties to make them marketable. 

Michigan has 52 RACER properties, and many still for sale in cities including Pontiac, Saginaw and Flint, where the former Buick City site received a $5.9 million state grant this week.

The criteria set by the bankruptcy court left a financial disparity between what RACER is mandated to do to mitigate contamination and what the market expects for fast redevelopment of Fisher Body property, Bruce Rasher, RACER’s redevelopment manager, told Bridge.

RACER’s funding remains adequate for the ongoing monitoring, Rasher said. But he added that costs to clean some emerging contaminants, such as PFAS, were not within the trust’s original budgets. 

“Public funding needs to fill that gap,” to make contaminated brownfields attractive to developers who can build on green fields, Rasher said.

Moving forward

The recent round of state grants are part of the Strategic Site Readiness Program, which Gov. Gretchen Whitmer and lawmakers created in 2021 to woo large-scale developments to the state after Ford Motor Co. shocked officials by announcing an $11.4 billion expansion in Kentucky and Tennessee. 

The $2 billion Strategic Outreach and Attraction Reserve (SOAR) fund, rebranded as Make it in Michigan Fund, offered incentives to large developments, including GM as it planned the Ultium EV battery factory a few miles west of its former factories in Lansing. 

SOAR also targeted site readiness, as economic developers recognized that Michigan did not have enough industrial properties ready for construction.

Tuesday’s $87.5 million in grant funding followed a funding process in mid-2023 resulting in 72 applications requesting a total of $420 million.

Of the 10 properties receiving grants, 10 are brownfields that will share in a combined $39.3 million, about 45 percent of Tuesday’s total award.

Lansing’s $19 million grant will be used to remove the concrete factory foundation and remaining underground utilities, a move expected to stir up some of the site’s contaminants. 

Among them are levels of PFAS discovered recently that are higher than the state’s cleanup standards. The money also will cover PFAS cleanup,  in addition to possibly reconfiguring nearby traffic signals and routes into the property.

Funding only addresses the Lansing site, but Schor and others said they expect the work there to accelerate redevelopment at the nearby township RACER properties.

State Rep. Emily Dievendorf, D-Lansing, said the investment in the Lansing factory is worth it to persuade developers to build and create jobs in cities, rather than rural areas.

It’s not known how long the cleanup will take or how long it will take to find a buyer, but it will undoubtedly be faster than if the state had left the site polluted, Dievendorf said.

“Waiting wasn’t working,” said Dievendorf, who sponsored the grant funding request.