The St. Paul assembly plant's days are numbered, but the company says it will be mid-2012 before the site goes on the market.
"It's such a unique piece of property," said Tim Murnane, president of commercial developer Opus Holding, which is interested in the land.
Whatever the next chapter holds for the historic manufacturing site, it's not coming fast.
Ford will shutter the complex for good by the end of this year -- the United Auto Workers Local 879 that represents 750 workers there said the last day of production is scheduled for Dec. 22. But Ford has pushed off the date to start marketing the 137-acre site to potential buyers in order to finish its environmental assessment, which the automaker says it can't do with the assembly line operating. Instead of launching the search for a master developer in January as was planned, Ford now says it will wait until mid-2012 to hang out the "For sale" sign.
Sales of its other plants have taught Ford that the more information it provides about the site, the better the responses from bidders will be, said Jay Gardner, head of real estate for Ford Motor Land Development Corp., the real estate arm of Dearborn, Mich.-based Ford Motor Co. In an interview, Gardner acknowledged that with the plunge in commercial property values it's a lousy time to put it on the market, but said Ford is committed to selling sooner rather than later.
"I think that we're going to go forward regardless," Gardner said. "In the end, we're not a real estate company. We're a vehicle company."
After the Ford assembly plant closes, it will take six to 12 months to decommission it, he said. The process involves removing equipment, removing all the fluids stored inside the plant and razing the buildings. Ford hasn't decided yet what to do with the two-story training center built in 1999 with big state subsidies and which Ford operates with the state and the United Auto Workers.
The delay -- Ford originally planned to close the plant in 2008 -- means yet another wait for the city of St. Paul, which has been working for years on the site's future.
Merritt Clapp-Smith, a senior city planner for St. Paul's Planning and Economic Development Department and the lead on Ford site planning, said the latest delay makes sense given how critical the environmental assessment is to determining a sale price. Measuring contamination beneath the buildings on the site is difficult.
So far, data indicate the level of contamination "has been sort of typical for this sort of site," Clapp-Smith said, meaning heavy industrial manufacturing sites. In short, it's dirty. It's still early in the investigation, she said.
There's no plan yet for what level of remediation Ford itself will undertake. "Not until we know what the issues are," Gardner said.
Contaminants and tunnels
Early environmental assessment reports posted on the Ford page of the city of St. Paul's website list a cavalcade of contaminants. A 2007 report identified 152 "recognized environmental conditions" at the site, from various pits and trenches used to contain oil, paint, hydraulic fluids and other chemicals to the plant's former nickel plating operations and former hazardous waste storage areas.
Then there's the labyrinth of underground tunnels beneath the plant dating to when workers mined silica for making windshields and moved finished vehicles down to barges on the river. Gardner said Ford doesn't think the tunnels present any risk for future development, although not everyone agrees.
Given the size of the question marks, and the still-beleaguered real estate market, it's nearly impossible to put a price tag on the site. Neither Gardner nor Clapp-Smith would hazard a guess.
Both pointed to an analysis of the site done by Colliers International in 2007, before the recession. That report estimated that the site -- after being made ready to develop on, but not including remediation, demolition costs, or construction costs for new structures -- would be worth about $36 million to $56 million.
Jeff Patterson, the former Colliers executive who worked on the analysis (now with Minnesota Brokerage Group), said it's worth less given the downturn and the fact that it will be sold as raw land.
Patterson said he's not surprised Ford pushed off the date for seeking a buyer. The impact and magnitude of the environmental cleanup "will be high," he said.
"I would speculate that they are going to put out a national [request for proposals] and they're going to supply all the background information that they can, and they're going to say, 'You guys figure out what you can pay for this,'" he said.
Richard Palmiter at CB Richard Ellis, which will be marketing the site for Ford, would only say the site "represents one of the best real estate development opportunities in the Twin Cities in decades."
St. Paul's Clapp-Smith agreed.
"It is a site of national interest," she said.
Life at other Ford plants
One company that has already expressed clear interest in the site is Atlanta-based Jacoby Development, which has developed two Ford plants. Jacoby executive Scott Condra said he toured the St. Paul Ford site two years ago.
"I've looked at a number of GM and Chrysler plants," he said. "This one is definitely up there in our interests."
Jacoby was the developer behind Atlantic Station, a $3 billion live-work-play-shop district that opened in 2005 on the site of an old steel mill in Atlanta's Midtown area. It has since sold the development, which is about half finished.
In 2008, Jacoby and a group of private equity partners paid about $40 million for the 122-acre Ford plant next to Atlanta's Hartsfield-Jackson International Airport. Jacoby remediated it and is turning the site into a commercial development called Aerotropolis. The first tenant is Porsche, which is moving its North American headquarters there from northern Atlanta and has plans to also build a training facility with a racetrack. That's slated to open in mid 2013.
In March, Jacoby bought the 100-acre Ford truck plant in Norfolk, Va. Condra said he was attracted to the site because it's next to the Port of Virginia, a deep port that can accept big container ships and has a dedicated rail line.
Condra would only say Jacoby paid "north of $15 million" and that Jacoby financed that purchase itself. Ford is handling the remediation, he said. Jacoby resold about 25 acres to a Belgium-based logistics company and is trying to develop the site for green energy. Condra said there's about a dozen groups seriously interested in the site.
Given the Ford plant's location in St. Paul, a more residential-oriented development would be more fitting, he said, but easy road access would be an important issue.
Among the local developers expected to show interest is Ryan Cos., the developer behind Dean Lakes in Shakopee. One of the largest mixed-used developments in the Twin Cities, Dean Lakes includes 295 single family homes and townhouses along with 44 acres of retail, including a Lowe's, on a nearly 300-acre site. About 84 acres has been left open for trails and conservation.
Rick Collins, Ryan Cos. vice president of development, said the Ford site "will draw significant development interest," but that a lot depends on what happens in the real estate markets over the next year.
"The market is too challenging to forecast at this point."
Jennifer Bjorhus • 612-673-4683