This post was authored by Paul Beshouri.
UPDATE: A previous version of this post announced that the City wanted to buy Lafayette Towers. While they are exercising their first right of refusal as a potential buyer, it is not so they can actually buy it. Read to the bottom for new information.
Just as we were getting all excited for Wednesday’s big Lafayette Towers auction, we noticed that every document on the auction’s website had been branded with the word ”POSTPONED”. We were able to get in contact with HUD spokesman Jereon Brown, who told us that the auction has been pushed back to July 25th thanks to a crazy curve ball:
the City of Detroit might just make an offer on the place.
According to Brown, the auction was postponed so that Detroit could further consider exercising its right of first refusal, an advantage HUD often gives to city governments. Doing so would give Detroit the chance to make an offer on the Lafayette Towers before they’re offered to the general public at the foreclosure auction.
“The city is currently working the numbers to see if buying the building would benefit the city,” Brown wrote in an email to Curbed Detroit. (UPDATE: we now know this is not correct)
Are we missing something? It’s safe to say that regardless of how hard you “work” Detroit’s budget numbers, a spare $20M for some real estate isn’t going to materialize. Brown also confirmed that Detroit would be required to adhere to the same bidding agreement we covered a few weeks back. This would necessitate an all-cash sale, millions in proven available credit, and over $10M in required repairs. If cash, credit, and maintenance skills don’t strike you as falling within our city’s top ten strengths, we’re right there with you. (Detroit’s #1 strength: Asphalt)
Assuming Detroit hasn’t recently discovered vast gold deposits on Belle Isle, there’s simply no chance of a city-owned Lafayette Towers. So, unless there’s a more sinister motive behind this delay (which we’re not counting out), Detroit’s slice of Mies Van Der Rohe should get its new owner on the 25th.
On a semi-related note, if anyone has an old Monopoly set lying around, do us all a favor and donate it to the city council. We’d prefer they take out any future real estate urges on pretend property, rather than wasting everyone’s time pretending to buy real property. (Update: No. Don't do that).
UPDATE! 2:00 pm... We just got a call from the Press Secretary at the Office of Mayor Dave Bing. Sounds like this one is a little complicated and that the Mayor's office is going to make some sort of statement to Curbed later today. We'll keep you posted.
UPDATE #2: At 2:12 The Detroit News posted on the postponement too. We would correct their story to say that HUD site has had the postponement info up for a few days now. Not just since today (Tuesday).
UPDATE #3: 3:15 pm. We've just talked to Karla Henderson at the city who clears up the confusion over why the sale was postponed. The city is stalling the sale in order to work out some alternate options with HUD. Basically it is a top priority that this building not go into foreclosure again and they want to make sure a responsible buyer is found (ie: not an out-of-town speculator who does not know how to handle this one)
Here are the options on the table between the City and HUD:
1. Sale proceeds as previously planned after City's delay.
2. HUD updates the bidding criteria to limit who can bid.
3. The City acts as an interim in brokering the sale to get control of who the buyer will be. They are in talks with several developers that they think will be able to take responsibility for these important Mies Van Der Rohe-designed towers. Basically they'd be doing this to avoid a repeat of the current foreclosure situation and are talking to DEGC about strategy as well.
· Lafayette Towers To Be Sold At Foreclosure Auction On July 18 [Curbed Detroit]
· Lafayette Towers Sale Information [HUD]