Part Three: What's the Cost of the Hayes Lemmerz Site?

The Ferndale School District has entered into a purchase agreement for the nearly 34-acre Hayes Lemmerz site at Eight Mile and Pinecrest for $950,000 to consolidate the district's alternative and adult education program. But if purchased, it will cost more than that.

The site, which has sat vacant for more than five years, is the former location of a division of auto supplier Hayes Lemmerz. Previously, Ethyl Corp. had occupied the parcel from 1940 to the mid-1980s.

It requires renovation and, due to functions of the land's previous occupiers, there are questions of how environmentally clean the property is.

So the $950,000 purchase price doesn't include the renovation of the buildings or the environmental remediation, if needed, of the Hayes Lemmerz site. In addition to these costs, the environmental study to determine whether the site will need remediation is phased and altogether could cost $125,000.

The study has already begun and will be completed within 90 days from the signing of the purchase agreement on May 24.

The renovation and remediation of Hayes Lemmerz

TMP Architecture and George W. Auch, who are working with the district on this project, said renovation of the site is estimated at $7.5 million. This would include renovating the main building, which TMP Senior Project Manager Bill Weinrauch said is in "great shape."

The main building on the site has already been evaluated by TMP. Weinrauch said the windows won't need to be replaced, and the roof can be repaired. He presented TMP's initial plan to the Operations Committee last week for the main building, which mapped out a 32-classroom facility.

There are 11 buildings on the Hayes Lemmerz site with several "shanty"-type structures — four walls and a roof that were used for storage in the former facilities.

Depending on what the environmental study says, there could be remediation costs for the land. Ferndale Superintendent Gary Meier said there's no way to determine yet how much those costs could be.

Those costs could be a factor in the board's final decision on whether to purchase the land. "If it costs a half million dollars or $1 million to remediate, then we have to think about that," Meier said. "We hope that the (remediation costs) would be nominal, if at all."

Because schools don't pay taxes, they are not eligible to apply for Brownfield credits. Any remediation would have to be paid by the district.

Paying for the site, not part of the bond

The school district is exploring a , but the Hayes Lemmerz site is not part of that. Meier said the potential purchase of Hayes Lemmerz is separate from the school bond issue.

"For us to use the property effectively, we can't wait for the bond issue," Meier said. "If we move forward and purchase (Hayes Lemmerz), there is no way to wait for the bond issue to pass."

Meier said that if the board finalizes the purchase, the district will move forward with renovating the site regardless of where the bond issue is in the process. Meier said that by the time the bond issue makes it to the ballot – if it makes it to the ballot – the Hayes Lemmerz project will either be dead or moving forward.

He said the district would look to finance the purchase of the site, adding that the $950,000 would have a nominal repayment schedule. He said monies for renovation of the site would be appropriated through Public Act 99, which allows schools to borrow money to purchase real or personal property for public purposes and to pay it out over a number of years.

The district has been ending the fiscal year with a surplus for some years now. It is doing so again this year. Meier said that since the district has been looking into purchasing property to consolidate the alternative and adult education program, it has been putting away a percentage of this surplus to help pay for this initiative.

"Every year, a percentage of the surpluses is saved for this project, for this work," Meier said. "Sometimes you have to invest a few dollars to make a few dollars."

The city and the school

If the district purchases the Hayes Lemmerz site, about $149,000 in taxes would come off the tax rolls. The city portion of that is $50,000; $4,400 goes to the , and about $56,000 goes to the school district. The remainder goes to the county and various other taxing authorities.

Meier said he spoke with the city manager about the purchase of the property. Though the city has said it doesn't like to see that $50,000 come off its tax rolls, it will assist the school district as much as possible.

"There are many things we cooperate on," interim City Manager Mark Wollenweber said. "Sometimes we won't agree, but we will get over that, and we won't stop any cooperation.

"Where we can, we will continue to assist them, and we are happy to do it," Wollenweber said.

Meier said the purchase of this property would offer opportunities for the city and schools to work together.

"The school district would lose about $56,000 in taxes in the long run, but the purchase has the ability for collaboration and cooperation to recoup that funding for both the school and the city," he said.

Meier said that historically, there has been collaboration between the school district and the city, and he anticipates that would continue with the Hayes Lemmerz site.

"We leased the Kulick Center for a dollar for 99 years to the city," he said. "That's a very important part of the city's operation. There's been a lot of collaboration with the police. We share the cost of the school resource officer and have for some time."