Amazon looks to open $400-million distribution center at Michigan State Fairgrounds in Detroit

Detroit Free Press

After more than a decade of failed attempts, the old Michigan State Fairgrounds is finally being redeveloped with plans to build an Amazon distribution center.

Under the proposal, Amazon would invest $400 million to build a 3.8-million-square-foot distribution center at the site, bringing at least 1,200 new jobs to the city, Detroit Mayor Mike Duggan said at a news conference Tuesday. The distribution center is expected to open in 2022, and employees will make a minimum of $15 an hour, plus benefits, Duggan said.

One of the largest private real estate developers and investors Hillwood Investment Properties, along with local partner the Sterling Group, plan to purchase 142 acres at
the site of the former Michigan State Fairgrounds. The proposed deal would bring a 3.8 million-square-foot facility with more than 1,200 new full-time jobs.

Amazon will not pursue any tax breaks or incentives for the project, Duggan said

"This was the single largest development property left in the City of Detroit and what Detroiters need are jobs," Duggan said. "We need good-paying jobs and jobs of the future. It (the property) cost us $7 million and I wanted control of this site."

The City of Detroit has agreed to sell the portion of the State Fairgrounds at Woodward Avenue and 8 Mile that it owns for $9 million to the real estate company The Sterling Group, founded by TCF Bank Executive Chairman Gary Torgow and now run by his adult children.

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The Sterling Group and Hillwood Investment Properties will buy and develop the site. They've worked together before, building an Amazon distribution site in Shelby Township.

As part of the deal, the Sterling Group and Hillwood will pay for a $7 million Detroit Department of Transportation transit center. The indoor transit center will have heat and air conditioning, bathrooms, and free Wi-Fi, Duggan said.

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The land of the old Michigan State Fairgrounds on Aug. 11, 2020, that will be redeveloped as an Amazon distribution center.

Plan could bring thousands of jobs

The announcement ends a long-running bid by Duggan to recruit a "major employer or a group of employers" and bring thousands of jobs to the site.

But this project almost fell through after Hillwood and Amazon wanted to take up all of the 140 acres for the distribution center.

"I said, 'That's how you use suburban land, you build out on one or two stories and you take up the entire property,' " he said. "This is the last large parcel of land the City of Detroit has."

Talks broke down for awhile, and then Hillwood and Amazon agreed to build a four-story building on about half of the site, something Amazon typically wouldn’t do, said Duggan.

In this proposed development overview, future plans for the rest of the state fairgrounds site are seen. One of the largest private real estate developers and investors Hillwood Investment Properties, along with local partner the Sterling Group, plan to purchase 142 acres at the site of the former Michigan State Fairgrounds. The proposed deal would bring a 3.8 million-square-foot facility with more than 1,200 new full-time jobs

Duggan said that freed up other sites for future development, pointing to the city's success at landing auto parts plants as what potentially could be built there.

But the jobs Amazon is bringing are key, Duggan said.

"Amazon jobs are jobs of the future," he said. "People want packages delivered to their homes. This helps to diversify the city’s economy."

Duggan said the city will give Amazon lists of qualified Detroiters to fill these jobs. The city also is opening what it calls the "Detroit Entrepreneurship Academy" in response to Amazon's program that offers people the chance to run their own delivery business and partner with Amazon.

"If you want to own your own truck, run your own company and hire your own people, we're going to get you ready for that opportunity as well," Duggan said.

Changing hands

Some of the land at the old State Fairgrounds is owned by basketball legend Earvin "Magic" Johnson. He heads an investment group that has talked about redeveloping the fairgrounds for more than six years.

Last year, the investment group, called Magic Plus, finally bought a portion of the fairgrounds from the Michigan Land Bank, but not the full 160 acres it once intended to. Duggan said he doesn't know what their plans are for that portion of the land.

Amazon's fulfillment center during a media tour on July 26, 2017, in Livonia.

Detroit bought the remaining 142 acres from the land bank for $7 million two years ago. The state fair left the fairgrounds in 2009.

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The deal is pending City Council approval. If approved in September, construction could start in October, said Elie Torgow, CEO of the Sterling Group.

Contact Adrienne Roberts: amroberts@freepress.com.