Packard Plant sold... for OVER $6,000,000 [Update: No it isn't]

[48202]

It is a cash sale. The county doesn't care how you come up with the money. Either you produce it, or you lose your deposit[[s).


What is the risk here?


If Hults produces the cash, great. If he doesn't, the county is still $205,035.00 ahead.


Are you concerned that a legitimate bidder will say, last month I was willing to pay a certain amount, but this month I'm not?

[MikeyinBrooklyn]

IMO it appears that the bidding process should have required that bidders to produce loan pre-approval of whatever amount they intended to bid.

It's weird, Lowell, but I remember reading in some news article in the last 2 months that the bidders had to put up like 5 or 10 grand refundable deposit to as a good faith show that they were a serious bidder. Now I can't find where I read that. Regardless, this process seems so chaotic that serious bidders for a property in Wayne County [[not necessarily the Packard Plant) might be kept away by characters like crazy Texas Dr. Lady and Bill "Eyes Bigger Than His Stomach" Hults.

I've never participated in any property auction, but this seems like a terribly un-businesslike manner of doing things.

[MikeyinBrooklyn]

What is the risk here?
If Hults produces the cash, great. If he doesn't, the county is still $205,035.00 ahead.
Are you concerned that a legitimate bidder will say, last month I was willing to pay a certain amount, but this month I'm not?

I think the risk is that as this process drags out, other would be developers might not be willing wait around forever. It also makes doing business with Wayne County or on a large Detroit reno project look super speculative [[beyond how speculative it is anyway). Ideally, a developer would have to deal with 1) the rehab of the property and 2) the vagaries of the market. To that we seem to have added a drawn out and unpredictable method of obtaining property.

Also, with regards to future auctions, people may think twice about bidding a large amount for a high profile property, knowing that kooky, unqualified bidders with no intent or ability to pay the bid amount are driving up the price. I don't what the solution is, although I would certainly require a tight payment schedule [[1 business day?).

[48202]

It's weird, Lowell, but I remember reading in some news article in the last 2 months that the bidders had to put up like 5 or 10 grand refundable deposit to as a good faith show that they were a serious bidder.

Prospective bidders paid $535 for the right to bid on a single property, or $5035 for the right to bid on multiple properties. Anyone who paid one of those fees and either did not bid, or did not win, was refunded either $500 or $5000. The remaining $35 fee was non-refundable.

If you won an auction and do not complete the sale, the county keeps the entire $535 or $5035.

I am pretty confident that the Packard Plant auction was treated at multiple sales [[$5035 deposit) because it is multiple parcels. The media is reporting it that way.

[MikeyinBrooklyn]

Thanks, 48202.

[48202]

Thanks, 48202.

No problem.

The starting price for the property was only $21,000. A deposit of $5000 for a $21,000 item is totally appropriate, maybe even on the high side. The county had no way of knowing that these people would bid it up so high.

[softailrider]

So this guy just tosses away $200,000.00 for absolutely no reason? Because he likes seeing his name in the paper? Because he's a lunatic? I must be missing something........

[MikeyinBrooklyn]

So this guy just tosses away $200,000.00 for absolutely no reason? Because he likes seeing his name in the paper? Because he's a lunatic? I must be missing something........

I think he just has delusions of grandeur. He has yet to demonstrate anything beyond a vague vision. He wants to heroicly renovate the historic but dilapidated Packard Plant, but he doesn't have the money, credit, or investors. He is one step ahead of the sheriff, hoping that someone will chip in before he dream is lost to another bidder. I think he is fooling himself as much as teasing Detroit. I feel he's sincere, just in way over his head.

[48202]

Maybe his CD account matures next week, and he doesn't want to take his money out early. Those things have substantial penalties for premature withdrawal.

[Vic01]

So this guy just tosses away $200,000.00 for absolutely no reason? Because he likes seeing his name in the paper? Because he's a lunatic? I must be missing something........

He's a gambler, he's gambling that the Wayne County Treasurer doesn't know what "deadline" means, and will keep on letting him pay $100,000 every month or so for the next year or two.
From what I've seen so far, I'd bet that Hults get another extension...

Maybe we'll see a "Send Hults Home" protest on Wednesday, or a "Welcome Fernando Palazuelo" parade on Thursday...

[Richard]

So now if Mr. Hults defaults and Mr Palazuelo says no it is okay I am not interested, then at that point it goes into the land bank at which point it can be sold for a dollar.

The city can offer to the next bidder but they cannot force it because they lost when the next higher bidder knocked them out.

So thats the choices.

Allow the time to work with a bird in hand.
Go through the process and end up back at square one losing not only the tax gain but future costs.

There may be more to this that is not being told,for instance,if it takes,as reported,a year for the city to clear the paperwork on one property for auction how did this one clear 46 in less then 6 month's.

Considering the past history,I would be just as leery of the city as the show me the money aspect.You really need to walk in there with at least 5 mil to cover partial clean up,taxes next year,stabilization etc.

That's still a chunk of change to gamble with .