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Detroit’s Blueprint for Advancing Industrial Site Readiness
The Verified Industrial Properties program aims to attract investment and development by simplifying site selection.
As policymakers focus on bringing manufacturing back to the United States, the nation may soon face an increased need for development-ready industrial properties.
The process of preparing industrial sites for development often goes overlooked in the grand scheme of economic development, but it is a crucial part of creating jobs and growing communities. The lack of a dedicated, intentional process for getting vacant properties ready for development can be a significant obstacle for regions and communities seeking to win investment in this highly competitive space.
In 2019, business leaders formed the Detroit Regional Partnership (DRP) to improve the economic trajectory of its 11-county region by attracting the next generation of companies, technologies and jobs. Early on, leaders of the nonprofit economic development organization recognized that industrial site readiness posed a significant threat to the region’s success, as vacancy rates in existing facilities hovered between 3% and 4%.
Three years ago, the DRP began scaling its Verified Industrial Properties (VIP) program. The program aimed to address the region’s long-standing site readiness issues by providing site selectors with detailed information about individual properties and their surrounding infrastructure. These reports include data on both current site conditions and future infrastructure development plans impacting the site, such as forthcoming road or utility improvements.
At the time, the program had nine pilot sites and funding of $500,000. Since then, it has grown into a $17 million program with more than 85 vetted sites hosted on a dedicated portal that is open to the public, with plans to scale to over 120 sites. VIP by DRP offers a blueprint to similar communities that have struggled to attract major developments.
Program Basics
VIP by DRP advances site readiness by conducting assessment reports on vacant properties and marketing them to site selectors and companies considering a move to the Detroit region.
The site assessment reports are conducted by one of five civil engineering consulting firms contracted by the VIP program, while the DRP’s real estate team conducts additional assessments on demographic and workforce data and provides drone and directional imagery.
Analyzing between 25 and 40 data points that consultants and end users have identified as priority criteria when selecting sites (see page 20), VIP by DRP has built a database of more than 400 vacant industrial sites across southeast Michigan. Each quarter, about 12 of these sites are invited to join the program.
VIP by DRP discovers vacant sites in the region through a variety of sources, including listings from CoStar and other real estate databases, target sites identified by the DRP’s county partners, and sites submitted for consideration by brokers.
A screen capture of the VIP by DRP homepage. Courtesy of Detroit Regional Partnership
There is no cost to join the VIP program. When accepting sites to the program, the VIP team considers a range of factors, including development potential based on initial site assessments and the acreage of the site. Another factor is site designation — brownfield or greenfield, urban, suburban or rural — as the VIP team seeks to include a variety of sites within its online portal.
For site owners, VIP by DRP acts as an extension of their team, helping to conduct necessary due diligence and promote their sites to potential companies looking to locate in the Detroit region. Sites selected for the program can receive up to an estimated $216,000 in grant support.
All sites in the program begin with a comprehensive site assessment report involving an initial property assessment conducted by the VIP program’s approved civil engineering land development experts. During this process, environmental and civil engineering teams conduct an in-depth evaluation of several key areas of the property, including utilities, easements, zoning and environmental conditions.
More than half of sites enter the second phase of research, which entails on-site investigation reports that can take from three to nine months. VIP by DRP has invested $3 million in this advanced phase alone, funding site assessment studies that site selectors and corporate end users often require for a site to be considered.
The findings of the first phase of the VIP program largely determine whether a site enters the second phase. The VIP team identifies sites with the greatest development potential and those that will meet the requirements of companies exploring the region for investment and expansion opportunities. Similar to the first phase, the VIP team seeks to ensure that a range of acreages, geographies, and greenfield and brownfield sites are advancing to this stage.
This proactive site investigation saves potential buyers up to nine months in their development timelines. The funded studies include a formal land survey that meets American Land Title Association standards, soil borings and a corresponding geotechnical report, Phase 1 environmental site assessments, and wetland delineation when dictated by land conditions.
The VIP program’s site studies provide “a much deeper dive” than what seasoned buyers typically expect to learn about a particular site, said Paul Hoge, senior vice president at Signature Associates, a full-service commercial real estate firm with eight regional offices in Michigan and northwest Ohio. “I think it actually enhances the marketability [of the sites] and the ability for people to understand what’s being offered.”
Dedicated to verified sites of 10 or more acres, including brownfield, greenfield, urban, rural and suburban sites, profiles in the portal include information on land use, proximity to infrastructure, and workforce data, as well as extensive maps and a drone video showing the lay of the land. Making this level of information readily available can help expedite the site selection and development processes.
In addition, developers and site consultants that choose to build on a VIP by DRP property are automatically considered for up to $100,000 in site activation planning. These funds can be used to get sites ready for development by conducting additional site studies, creating a site plan, conducting test fits or even investing in project management. The DRP prioritizes projects that create quality jobs in the advanced mobility and manufacturing sectors.
“The program can really unlock a lot of value, and there’s not a whole lot of risk,” said Marc Werner, regional vice president at NorthPoint Development. “It’s a true partnership that at minimum can help create more visibility. In the best case, there can be real dollars applied to your project.”
The Need for Development-Ready Sites
There is no shortage of competition when it comes to attracting major industrial developments. Companies investing in a new facility often have several options at their disposal and are operating on tight deadlines. Site selectors can’t necessarily afford to wait for their desired site to be prepared for development. The VIP program can shave as much as 12 months off a company’s or developer’s timeline.
For years, the Detroit region — comprising 61% of Michigan’s industrial real estate market — struggled to compete on the industrial development stage, largely due to a lack of readily available information about its industrial sites. Site selectors often have strict infrastructure specifications regarding water, wastewater and electric usage. Unable to promptly provide site selectors with this information, Detroit properties were routinely eliminated from consideration quickly, if they were considered at all.
VIP by DRP aims to solve this shortcoming by providing smaller communities with the expertise, partnerships and resources needed to land major industrial investments.
“Developers need the same information whether they’re going to a large community or a small community, and we don’t always have the resources to put that together, nor do our local landowners,” said Tyler Rossmaessler, executive director with the Flint & Genesee Economic Alliance. The VIP program offers “a great opportunity for us to have more firepower and more access to information.”
Case Study: Flint Commerce Center
In April, the recently constructed Flint Commerce Center, a VIP program site redeveloped by New York City-based Ashley Capital, hosted a ribbon-cutting ceremony to celebrate the successful lease of the industrial park’s first building, measuring 330,000 square feet. This project helped the city of Flint to land a major developer and tenants that will bring more than 100 jobs to the community.
The site was once home to Buick City, one of General Motors’ largest plants, employing 26,000 people during its heyday in the 1980s. After vehicle production ceased on the site at the turn of the century, it became one of Michigan’s largest brownfield sites, totaling nearly 400 acres.
When the former Buick City site was submitted to VIP, the team got to work conducting site studies to prepare the property for a potential buyer. Ashley Capital has invested $300 million into the site to attract manufacturing and logistics tenants and is projected to create around 2,500 permanent jobs for the community once the redevelopment is completed.
Site readiness takes significant funding and dedicated staff. As the VIP program works to help revitalize similar sites around the Detroit region, it can serve as a blueprint for flipping the script in communities that are traditionally overlooked in the industrial real estate market.
Shannon Selby is vice president of real estate at the Detroit Regional Partnership.
Deserving of AttentionVIP by DRP site assessment reports consider 25-40 data points identified by consultants and end users as priority criteria when selecting sites. These data points include:
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