Industrial Realty Group contends that the $28 million value assigned to nearly 206 acres of land that it purchased in December 2006 from the automaker is far too high.
Instead, IRG says the land and nearly 4 million-square-foot plant is worth about $2.3 million – the $1 purchase price plus a complex formula that includes the more than $3.2 million it estimates it`ll spend in environmental cleanup.
“If the value of the property were $28 million, do you think Ford would have sold it for $1?” IRG`s attorney, Abraham Lieberman, said Monday.
But the Vermilion school district disagrees, said the district`s attorney, Timothy Armstrong.
“It just doesn`t seem right that all that land and plant is just worth $1,” he said.
The district stands to lose about $500,000 in taxes if the value is dropped to what IRG wants, Armstrong said. IRG has only paid $55,303 of its $742,361 property tax bill for 2006, according to the records of county Auditor Mark Stewart.
At an October hearing of the county Board of Revision, which is expected to make a decision on the dispute Wednesday, IRG managing member Chris Semarjian, said the land simply wasn`t worth what it was when Ford was building vans there.
“I know everybody`s disappointed, but if we get to a point where the values are realistic then we can put people in. Then we can put the value back on the property like it should be, like it was with Ford,” Semarjian said. “It was $28 million because you had a major corporation`s vehicle assembly facility out there.”
Stewart – one of three Board of Revision members who will decide the dispute – doesn`t disagree that the old Ford plant probably isn`t worth what it once was, but he said he`s not sure that it`s worth as little as IRG contends.
When Ford closed down production of the Econoline in 2005, it left behind decades worth of waste and chemicals that need to be cleaned up, something IRG agreed to do when it bought the shuttered plant.
“The condition (of the property) and part of the reason it took so long to close the transaction was that we had to basically guarantee Ford that we would clean up the property,” Semarjian said.
The city of Lorain has successfully won state approval for a nearly $3 million grant that will help IRG with its cleanup. According to the city`s application for the Clean Ohio Revitalization Fund Grant, the company will have to kick in another $8.7 million in matching dollars as part of the grant.
Semarjian said taking on the environmental responsibility is the same as if the company had paid that amount in cash because the result is the same – IRG will have to pay for the land.
IRG also agreed to take out a $10 million insurance policy on the cleanup and will be unable to sell or mortgage the land until the cleanup is complete, Semarjian said at the hearing. If IRG doesn`t do the cleanup, the land will eventually return to Ford`s ownership.