Livonia — Some in this city view capitalism with suspicion, much to the distress of Livonia’s city officials, entrepreneurs, and business interests.
Meanwhile, a giant monolith looms over the city, the empty and decaying relic once called Sears. Formerly the anchor of the mostly forgotten Livonia Mall, the massive building sits on a plot of over 16 acres of unused land.
Rarely is this rotting behemoth discussed, and inquiries with city officials result in frustrated sighs and quick declarations of “That’s private land, we can’t do anything about it.” The location is, in fact, a big problem due to its rapid decay and because the building is not fully secure. Last year, Michigan Enjoyer revealed homeless people living in and around the structure, using it as a safe haven from the weather and other dangerous persons.
The owner of the building is, like the structure, immovable. On paper, it is owned and managed by a privately-held corporation named ESL Investments. The property is controlled by former SEARS Holdings CEO Eddie Lampert, a billionaire businessman and hedge fund founder, known more famously as a contrarian investor.
Lampert buys undervalued or depreciating assets and waits, and waits, and keeps waiting, for what is anyone’s guess, but common sense dictates a market overcorrection.
Lampert took the investment world by storm in 2004 and eventually took ownership stake in Sears and Kmart, merging both companies in a successful takeover. The first founder to make $1 billion in a year, his investment model was the toast of Wall Street, but the 2008 financial crisis severely impacted his portfolio and ill-timed investment in Citigroup further dimmed his rising star status.
With Sears and Kmart failing nationally, he took the reins and named himself CEO in 2013. His financial remodeling of Sears Holdings failed to save the once mighty American company and may have hastened the decline.
Sears in Livonia officially closed in April 2020 and only five locations remain in operation today, with Lampert shuttering, closing, and strategically selling off various properties under the ESL Investments banner.
Here’s where the speculation begins on his motive. Michigan Enjoyer spoke with experts who floated the notion Lampert was intentionally managing the decline. Under his leadership, Sears shredded employees, performed no ostensible store maintenance, and appeared willing to allow the properties to decline in value as the company lost more than half its market share.
So Livonia’s empty Sears building is stuck in a state of perpetual limbo. Lampert has attached unusual caveats to the property itself, such as a 30-day closing demand, making it virtually impossible for another developer to purchase the property.
Why? The Enjoyer received no response from ESL Holdings, but experts in commercial real estate and investments believe Lampert, like other contrarian investors, buys deprecating real estate with declining taxable value and waits out the market for buyers to come in willing to pay ten, fifteen, twenty times the value of the property. Folks like him are willing to wait for years.
The building is worthless at this point, a tear-down that might cost several million dollars. Any interested developer—and there’s been at least one, according to sources in City Hall—would have a major expenditure in not just the demolition, but land remediation.
Those are the hard facts, but city officials are already lamenting even the idea of redevelopment, with one city official stating: “The Sears at 7 & Middlebelt is going to be the one. The shit is most certainly going to hit the fan.”
One would think an enormous empty building serving as a rat’s nest of nefarious activity requiring police manpower might spark a YIMBY moment, but prospective car washes and gas stations ignite protests here.
Why? Because, according to one local business leader: “Many long-tenured and older residents worship empty buildings as a form of crippling nostalgia.”
But even more ominous is the pessimism around economic growth and an adherence to central planning as a means to limit and or stifle economic competition. Exhibit A is newly elected city council woman Eileen McDonnell, who openly lamented the notion of new car wash possibly pulling customers away from long-established car wash elsewhere in the city.
Yes, you read that right.
One day, maybe even tomorrow, Lampert will find his buyer with a plan for redevelopment. Odds are likely given the location and proximity to Walmart another consumer-based enterprise will look to set up shop on that pad, and the fight by locals to save an empty Sears building will commence.
Jay Murray is a writer for Michigan Enjoyer and has been a Metro Detroit-based professional investigator for 22 years. Follow him on X @Stainless31.
