Southfield purchases Northland Center

Officials say the building will be demolished and property will be resold

By: Kayla Dimick | Southfield Sun | Published October 7, 2015

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Eight months after a judge ruled Northland Center will close, the city of Southfield has announced the purchase of the mall.

The city announced Oct. 7  that it has purchased the mall, 21500 Northwestern Highway, from the court-ordered receiver for $2.4 million and plans to demolish, remediate and sell the property to a qualified developer, according to a news release from Community Relations Director Michael Manion.

“The city of Southfield purchased the 114-acre property to protect, maintain and ultimately increase the property values for Southfield’s home and business owners. The city does not intend to develop or own the property; we plan to demolish it and clean it up so it can be sold to a qualified property developer who will build a new, revitalized, mixed-use development containing office, retail and residential space on the site,” acting Mayor Donald Fracassi said in the release.

The news release also said the city plans to spend about $8 million-$10 million on the demolition and remediation, or removal of pollution contaminants, of the property. Manion said there is currently a $31 million mortgage lien on the property, which will be extinguished upon purchase.

“We bought it because we did not want Northland Center to become a vacant shopping center significantly blighting the community.  The Northland name is synonymous with Southfield, and it’s important that we find the finest development possible for this site,” Fracassi said in the release.

Manion said that in addition to taking advantage of low-interest and no-interest government loans and/or grants, funding for the purchase will be used from the restricted tax base initiative fund, which can only be used for city redevelopment. Over the past two years, $7.8 million has been set aside in the fund. The local improvement revolving fund, started in 1983 and reserved solely for capital projects, will also be used, Manion said. The LIRF includes $15.3 million, with $12.5 million in liquid assets.

“The city of Southfield will not have to increase taxes to purchase, demolish and clean up the property; nor will it have to increase taxes to replenish the funds being spent on the project,” Manion said in the release.

City Administrator Fred Zorn said in the release that through a published bidding process, the city plans to hire a private company to demolish and clean up the site. Within six months of receiving the title to the property, he said, the city will post a request for proposals to solicit bids for demolition and cleanup. The city also plans to seek grants to cover all or part of the cost of the demolition and cleanup, which will take about a year.

Downtown Development Authority Executive Director Al Aceves said the purchase of the property means big things for the growth of the city.
“It represents a very critical piece, not only for the city of Southfield, but for the DDA. We’re very pleased we’re able to acquire the property,” Aceves said. “It’s been a long process ― close to a year; we think the property can be used as mixed use. What that means is open-ended ― maybe some office space, retail, senior housing. I think the potential is limitless, really. So if we did it right, we believe this could put the city in the proper direction for the next 75 years or so.”

Built in 1954, Northland Center was one of the nation’s first suburban malls. In recent years, the mall has gone through a tumultuous turn of events, as Target announced plans in late 2014 to close its doors there and Macy’s announced plans to close in January. In February, Judge Wendy Potts approved the shutdown of the mall.

In a previous report, Farbman Group Senior Vice President Ron Goldstone said he believed the reason for the closure most likely was due to the lack of customers at the mall and the rent retailers paid. Rental income and revenue were not enough to outweigh the operating costs, he said.

Interested developers can contact Aceves at aaceves@cityofsouthfield.com or Business and Economic Development Director Rochelle Freeman at rfreeman@cityofsouthfield.com.

A formal bid process will be announced at a later time, Manion said in the release.

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