Owner of former GM site says city of Janesville began freezing out its redevelopment plans months ago

janesville-city-hall

| By Neil Johnson, reporter-anchor, Big Radio |

Owners of the former General Motors site in Janesville say the city is ghosting them over the city’s plans to force sale of the 250-acre property.

Stephen Collins, vice president of GM site owner Commercial Development Company, says the city of Janesville hasn’t returned his calls for details of its plans to condemn and potentially acquire the GM site.

And Collins says Commercial Development still hasn’t gotten any formal notice from the city on the condemnation action. In fact, he says Commercial Development only learned of the city’s recent move through a local news article.

But Collins says that matches up with how the city has seemed to treat his company the last several months.

Collins says the city “slow-walked” review of an intermodal project his company proposed at the GM site two years ago. He says city staff tied up local consultants’ work for months, claiming the plans failed to meet rules in an overlay district the city applied to the GM site in 2019.

Two tenants who’d have run a train-to-truck intermodal station on part of the 115-acre, former JATCO haul-away yard on the GM site’s southern end eventually walked away from the proposal in frustration, Collins says.

City officials say they’re moving into condemnation because Commercial Development hasn’t done much in a half-decade to move the GM site forward.

City manager Kevin Lahner says the city seeks to condemn the property because the owner has left behind blight and tens of millions of dollars in environmental contamination along with lingering rubble that stand in the way of the kind of redevelopment the city wants to see at the GM site – a mix of industry, commerce and new housing.

Trouble brewing

Since around 2020 city officials have expressed frustration with Commercial Development’s handling of a brownfield site the city says appears to idle and in disarray.

The company’s inaction and at times failure to pay up on hundreds of thousands of dollars of property taxes and utility fees have drawn repeated legal warnings from the city over the last few years.

Commercial Development had cleared the main GM plant site of buildings, finishing the work in 2020 – although the company has left large piles of rubble on the site that’s drawn slaps on the wrist by the state Department of Natural Resources.

The city’s own rules require cleanup of acres of asphalt and concrete factory foundations on the site, but Commercial Development’s stance is that the environmental book on the GM site is considered “closed,” and the remaining concrete the company has left, according to the state Department of Natural Resources, serves as a man-made cap that keeps known hot spots of ground contamination covered.

City officials have pointed out that cap is deteriorating as trees and brush grow up through it and break it into pieces. Redevelopment would likely require removal or replacement of parts of the old cover.

One of the city’s main motives to buy the site is that it would allow the city to vie for major federal and state funding sources for cleanup, including removal of pavement now capping the 115-acre main GM plant site. It would include a dig-out of dozens of acres of spots where the DNR has flagged the soil below as being contaminated with petrochemicals.

The city characterizes the site’s capped-off ground soil contamination as the biggest barrier to mixed-use redevelopment of the site.

Collins says the city’s known for years his company’s plans were for industrial redevelopment, which he says likely requires considerably less city regulation and environmental cleanup than new housing.

He thinks layers of regulations the city has on the site have squeezed Commercial Development’s ability to market and sell some parcels, and he thinks that’s posed a bigger hurdle than known soil contamination.

For instance, Collins calls the city’s overlay district’s requirements “more onerous” than the site’s remaining environmental cleanup conditions.

Collins says “eight” different redevelopment plans at the GM site have failed to launch — and he says a few of them, including the intermodal development, foundered at least in part because of protracted city staff reviews he says had to do with struggles to meet requirements under the city overlay district.

Collins told WCLO the city’s apparent iciness toward Commercial Development seems to have increased over the last year under Lahner’s leadership.

What’s best for the GM site?

Lahner told reporters in late February the city lost interest in Commercial Development’s intermodal plan because it did not represent the “best, highest use” of the GM site.

Lahner called the prospect “underwhelming,” and he and city Economic Development Director Jimsi Kuborn said the city opted to pull support for the project.

Collins says the city designated the GM site last year as a blighted Tax Increment Financing District without discussing the matter with Commercial Development.

Collins says Commercial Development wasn’t involved, but he says at the time his company had no objections to the move.

Meanwhile, Commercial Development continues to see some interest from developers eyeing the GM site.

Collins said his group was poised to sell part of the main GM plant parcel to a large-scale data company that planned a large AI campus.

That project evaporated, although Collins doesn’t blame the city. He says the site apparently didn’t have the electrical infrastructure to support what he calls a plan for “huge computers.”

He says the city didn’t like another, earlier plan for truck storage at the GM site – although Collins says he “respects” the city’s feelings on that prospect.

Collins says even as the city’s condemnation process now gets rolling, Commercial Development has interest right now by a developer who’d launch a smaller-scale, 20-acre reuse prospect at the site. He did not disclose details.

‘Blindsided’

Collins says his company now sees evidence in state records that the city of Janesville began angling toward acquiring the property at least two years ago—including during a period of time when the city appeared to be seriously considering Commercial Development’s intermodal plan.

He says state Department of Natural Resources records indicate the city’s been talking with state environmental officials about the prospect of the city acquiring the GM site since 2022.

Collins says those discussions would have gone on “unbeknownst” to Commercial Development.

And they would have rolled out at a time when the city–at the time led by former city manager Mark Freitag—was publicly trumpeting the site as the location of a future intermodal site.

Freitag is now city manager of a Denver, Colorado suburb. Lahner was hired to fill the city manager role last year, as Freitag departed.

Collins says in more than 30 years and 300 projects, Commercial Development has never had one of its brownfield sites condemned, although there are public records in Michigan of the company in the 1990s selling off a shuttered, Old Style beer brewery property it scrapped out of equipment and metal but left part of a warehouse property standing.

The company says the warehouse stayed put because a buyer at the time wanted it.

Collins says his company feels “blindsided” by the city’s actions and its apparent unwillingness to speak with Commercial Development.

In a brief emailed statement, Deputy City Manager Ryan McCue says the city is “following legal advice” by not communicating directly with Commercial Development at this time.

The city is now poised to begin an independent appraisal for the value of the GM site—a calculation that’ll take into account market value, the owner’s unpaid bills to the city, and the overall cost of environmental cleanup necessary to gear the project for re-use prospects that would include housing.

The city council would have to approve the city’s purchase of any part of the property, and Commercial Development can bring its own appraisal to the table.

A forced sale through condemnation could require a judge’s decision to settle a sale price.

Collins sidestepped giving Commercial Development’s full stance on the condemnation, and he stopped short of saying what his company’s intended next steps could be. He says his company must now to wait to see the city’s appraisal.

“The ball is in the city’s court,” he says.