I bought myself a single share of General Motors stock back in December. So far, I’ve lost 9% on the deal. I consider it one of the best investments I’ve ever made.
That share gives me voting rights and legal standing within the company. If this rancid Renaissance Center deal gets done, I’m going to sue the shit out of GM.
In Detroit, you see a lot of half-baked development deals. But this one is so bizarre it defies financial sanity. As a shareholder, GM has a responsibility to maximize my financial gain. This project—the little we know about it—can’t possibly do that.
A Blizzard of BS
Developer Dan Gilbert and GM have come to the public, asking for help with their $1.6 billion scheme to redevelop RenCen’s five towers along the Detroit River.
Gilbert would bring $1 billion to the deal. GM would toss in another $250 million. And the city and state would chip in $275 million.
GM, which owns the building, says its role in the project would simply be a philanthropic one. If the redevelopment ever made a profit, the company claims, it would donate the money to charity. That is according to Dave Masserson, GM’s vice president of infrastructure and corporate citizenship.
But I don’t trust Massaron as far as I could throw him.
Just ask the people of Flint. He’s one of the main culprits who pushed the deadly water deal in Vehicle City.
Profits are supposed to be maximized and distributed to shareholders. That’s called fiduciary responsibility.
According to people in the demolition business, the potential cost to demolish all five towers would be no more than $50 million, which includes asbestos remediation. But let’s not quibble. Let’s say the demo costs would be $100 million.
Still, a $100 million taxpayer loss would be better than the proposed $275 million loss.
How much is the Renaissance Center worth, as is?
We now have a comparable price. Tower 600 recently sold for $9.2 million in an online auction. Weirdly, we still don’t know who bought it. But applying that same cost-per-square-foot to the five towers GM owns, their value would come in somewhere around $150 million. But let’s not quibble. Let’s say the sale price would land around $50 million.
Again, a $50 million profit for GM and the other tower owners would be better than a $275 million loss for taxpayers.
The math is simple enough. Sell it or demolish it.
Smoke-Filled Backroom
One can’t help but suspect the ultimate purpose of this backroom deal is to further enrich Dan Gilbert, one of America’s richest people. Gilbert is currently building Hudson’s Detroit, a shabby taxpayer-funded skyscraper that is in its eighth year of construction.
But Gilbert can’t find tenants. His main competition is the Renaissance Center, which contains more than half the city’s vacant office space. Get the taxpayers to take those towers down, and Gilbert’s problems are solved.
Crony Capitalism
The city looks better since bankruptcy. How could it not? But at what cost? And whose?
That’s where my one measly share of GM comes in.
The citizens of the Motor City got pick-pocketed over the decades by the financially felonious who eventually plummeted it into insolvency. With the highest property taxes in the country and the only city income tax and utility taxes in the state, Detroiters have no more to give.
So now the cabal turns its insatiable lust toward the suburbs and farms. It is they who paid for Detroit’s pensions over the past decade. And Flint’s water. Gilbert’s failed Q-line. GM’s EV boondoggles. The Detroit Institute of Arts. The Detroit Zoo. The SMART bus system. Now comes the increased fees for hunting licenses, drivers licenses, even barber licenses.
It’s all a license to steal.
I’ve got a crazy idea, let’s try capitalism on the Renaissance re-do.
Otherwise, I’ll see you in court.
Charlie LeDuff is a reporter educated in public schools. Follow him on X @Charlieleduff.
