$6.7 Million Bid for Dearborn’s Florida Apartments

Dearborn city officials say they have a serious bid on the table for the city’s Florida apartment building for retirees but it will be at least three months before any deal can be officially inked.

The unnamed potential purchaser has bid $6.7 million for the 50-year old Florida property. The bidder was one of four people who expressed interest in the building (although the city says just three of the bids were serious offers). In 2007, the Dearborn Towers apartment complex in Clearwater, Fla. was valued at between $8 million and $8.3 million, according to one informal appraisal. Another appraisal in March 2008 put the value of property at about $5.6 million.

So the current letter of intent the city has to purchase the building for $6.7 million is a good one but odds are good the company making the bid will come back with something lower. The potential purchaser has 45 days to conduct its due diligence on the building.

“Their will be negotiations at the end of this period,” Dearborn Mayor John B. O’Reilly, Jr., said at Monday’s city council meeting. “The best case scenario (for a sale) would be at least three months. I think it will be longer than that.”

When the due diligence is completed you can be sure the offer will be lowered to at least $6 million as part of the negotiations. Dearborn City Council will then have to decide whether the bid, whatever the amount, is a good one before entering into a purchase agreement.

For an earlier story on the Dearborn Towers, click HERE.

DeepSaidWhat.com welcomes your views and encourages lively -- but civil -- discussions. Comments are unedited, but submissions reported as abusive may be removed.

  • David

    We as residents are about to get screwed again, I believe, if we leave this decision up to Big Boy, and his yes men on the Council. Everybody watch out.

  • moe

    David you are right, this Einstein that we have making decisions for our City, couldn’t make a right decision, if his life depended on it. As long as he is dealing with the peoples investment, he has nothing to lose. He doesn’t own anything of his own (excluding his house — maybe), so he couldn’t analyze anything. The people of this town deserve better than he is giving us. The Big Boy thinks he is playing monopoly, however, its the residents interest that are at stake. Some of his department heads have said, to me that if you don’t agree with him, then he pouts, and calls you out — way to go bulley.

  • SameAsitEverWas

    Hey guys don’t you get it? The Dearborn Mack Daddy needs some quick cash so he can spend it all on his other scheme,a convention center!
    He will squander Camp Dearborn away also and continue to push for his money pit convention center. Right now there aren’t any businesses that want to come to Michigan for anything,so the big guy will be renting it out to the “red hat” ladies for a luncheon or maybe the city garage sale could be held there.
    Way to go big guy,keep selling off all of the things that made dearborn unique so you can keep driving this city into the ground.
    I at least want to be at the ceremony when you official rename the city “Highland-Dearborn-Park.

  • shallowSaidwhat

    Do you guys see how the Big Boy is at council meetings, he often throws temper tantrums….jeeze almighty!

  • shallowSaidwhat

    And i willing to be that these brainless people in the city will vote him back in again in 2013.

  • cloe

    I watched the council meeting.

    The lady that got up and asked questions about what would happen to the residents was blown off. Instead, he talked about how the negotiation process would go for the sale of the building.

    She was very polite and finally asked if the residents would stay. He said that it was between them and the new owner.

    You would think that they could put in a stipulation to protect the current residents. Of course, that won’t happen. They don’t care. It’s all about having more money to waste.

  • Logic and Reason

    It’s a rental building owned by the city. Nothing more. Short of building a new building, how is the city supposed to “protect” the current residents? Here’s an idea: The city has several apartment buildings in town; Hubbard East, Sisson Manor….. The residents of the Florida Apartments can move into one of those buildings. The rent is very reasonable. Nobody ever said the city had a duty to subsidize cheap rent in a waterfront building in Florida for Dearborn residents in perpetuity. Sell Hubbard Manor South and let the current residents pay market rate for housing in Florida, which is real cheap now anyway, and get the city out from under this Albatross.

  • moe

    LOGIC AND REASON YOU MAKE TOO MUCH SENSE FOR OUR ILLOGICAL RESIDENTS .

  • tdogg

    1. Selling this property now is a questionable deal, given the price of Florida real estate in the current market. I know a lot of people down there who think that market is going to turn long before Michigan’s.

    2. Cloe makes a very good point – that this is being done in a rather typical “high-handed” manner, without regard to the well-being of the many folks who moved there. I’m sure many relied upon the City’s continued ownership when they settled in. Now what? As Cloe points out, the answer seems to be “who cares?”

    Sure L&R, you’re right, its a rental – just like Trump, the new landlord can screw the little guy or gal. Btw – it would be very easy to negotiate a tenant holdover provision in the sales contract, but no doubt that is of no interest to the purchaser, so the City isn’t going to bother trying.

    Its just another reminder to everyone that the old days of caring about the citizens has taken on a different tenor now.

  • Logic and Reason

    “Its just another reminder to everyone that the old days of caring about the citizens has taken on a different tenor now.”

    Maybe more people are realizing that in the “new days” it’s not fair to the rest of us to maintain a rental property in Florida for a relatively very small number of people. For too long, the idea of “caring for citizens” was another way of saying “spend whatever it takes to keep each individual happy, no matter what”.

  • kay

    O’Reilly, as usual, has no respect for the Dearborn citizens. I disagree with Logic and Moe because of who we are talking about. You have seniors who have moved out of Dearborn to their other “Dearborn” and you think it’s just fine to say, “Sorry, nevermind. Move back to Dearborn.” ? I am not at all in favor of a nanny state but when you are dealing with seniors who have worked toward something throughout their life, you do NOT pull the plug like that. That is just heartless, not to mention unnecessary. Besides, who in their right mind would consider selling real estate now? For what purpose? He is so short sighted. I give credit to anyone who speaks at the council meetings when he has an agenda to sell. I do not trust myself at this point, afraid that I would give him back what he dishes out.

  • MyTwoSenseToo

    I don’t like the idea of possibly throwing people out of their homes; but it’s an apartment. Apartments get sold all the time and people get displaced. Its all about business.

    What everyone needs to understand is the city is going to need every penny they can get their hands on. Maybe we won’t get top dollar for this property now but we cannot afford to be particular. We should also be willing to give up Camp Dearborn. I wonder if it would make it easier to let these two properties go if the citizens were able to vote to sell them.

    Everyday the newspapers are talking about other cities (ie Wayne and Livonia) and how bad it is going to get next year because of Ford’s big tax abatement and property taxes taking another hit. City budgets are going to be disasterous. Do we think Dearborn will be any different? We are Ford Country.

    These cities have the option of laying off police and fire employees. Because the citizens of Dearborn voted to change the charter and include minimum police and fire employees per population we do not have this option. I am one person who can appreciate not having this option right now. When things are economically bad; these are two departments I want staffed to the fulliest. I’m sorry but pools and library’s etc… are luxury’s that should be cut first and not public safety. I do think that the police and fire should be prepared to give a little back to the city to show good faith to the citizens.

    I’m sure I will take much heat for my opinion.
    OH WELL!

  • MyTwoSenseToo

    I’m sorry if my post sounds insensitive but I stand by it.

    Dearborn citizens better wake up and smell the coffee because we are headed for a bumpy ride. Why isn’t anyone at City Hall talking about it?

    And don’t even get me started on the Dearborn School Board and the Teachers Union.

  • kay

    These are not simply apartments, but apartments that seniors who basically live on social security live in. It’s a little bit more complex than the average selling of a complex and asking people to pick up and move. Perhaps it would be more prudent to not sign any new rental agreements without a clause saying that within so many years, things will change. While I’m not sure if anything like this has been sent to current residents, judging by the mayor’s typical non-answer, I would bet not. No one wants the city to ‘suffer’ but full disclosure and planning are both good things.
    Regarding police and fire: Why is that the minute tax revenue takes a hit the first thing everyone talks about is cutting back on police and fire? I find this to be so ridiculous. From the political stand point, it seems to me that it is a form of black mail to ‘scare’ voters into voting for an increase. Why in the world would anyone think that cutting back on police and fire during hard economic times is a good idea? It makes no sense. As far as police and fire giving back; check this out before you speak. They give back plenty, work for days off rather that overtime, etc. In this day and age where people are desparate, pick something else. I would love to see where the city is cutting back on waste…then we should talk about cutting programs. And as I understand it, Camp Dearborn is turning a profit. So be sure to check your facts and financials before promoting the notion of selling. Not giving you heat, just suggesting that you check out what is really happening first.

  • tdogg

    The consensus is that fiscal trouble will continue to rain down upon us for many years. The posts on this site prove our level of awareness of the problem and the pain in the solution.

    That said, my comment was simply to support Cloe – that there is a way to manage the news (which comes as no surprise to anyone) that “you are going to have to move out of your home.”

    MTST and L&R – I agree with your comments on fiscal reality, but that wasn’t my point.

    Let’s show leadership by showing respect for our citizens.

  • SameasItEverWas

    Why would anyone think the administration would care about displacing people from home,just look at what the last administration did to the people on porath street. The came up with a bogus claim that after 100 years there is suddenly lead in the park,the claim alone stopped anyone from wanting to move into that area and then the city starved out the remaining residents there and eventually low balled their houses from them. Its no different than what the mack daddy is doing in florida now. ” Logic and Reason” thinks its great because its quick cash to replace all of the money this administration blows. Did we need 3 million dollar deal to replace garbage cans in the city that everyone seems to hate? Do we need to spend 80,000 to resurface the electronic digital sign in front of the civic center that works fine?
    Do we need to be spending 80,000 to repair foreclosed houses in east dearborn that will be worth 60,000 when they are done?
    I could go on and on,this spending occurs every month and the dearborn mack daddy just keeps looking for new ways to find more cash to blow on projects and schemes that never work.
    I think “Logic and Reason” needs to change his name to ” Cornie and Spin “

  • Wanting Better for Dearborn

    Kay,
    We are not kicking seniors out without any notice. If you recall, Voters agreed to sell the 8-story, 88-unit building in 2007. If the Big O would have acted sooner we would have gotten a lot more money for the property then, than we will now. I agree with My Two Sense. We can no longer afford to supplement rent out of state. We need to look at the future of the residence that actually reside in our City and pay City taxes.

    Camp Dearborn is a luxury. Profit or not this year, it also needs to go. Think of all the years it was a strain on the City.

    Also that Performing Arts Center should be sold. Maybe with some good management it could also make a profit instead of being a drain on this City.

    As long as this City keeps buying high (like the Montgomery Wards building) and selling low, we will continue to be in BIG trouble. We have no business being in the Real Estate business.

  • MyTwoSenseToo

    Kay

    If you read my post:

    I am pro police. I’m glad the city can’t lay off police and fire employees. My feeling about giving back is that if you look at other police departments many have given up money and benefits to help their city and job.

    Sure, Camp Dearborn turned a profit THIS year but it may not next year or the year after that.

  • Donna Hay

    Camp Dearborn may have made a profit but just how much did he golf course LOSE this year, last year and the year before?? How long are we going to carry these money losers?

  • Michael D. Albano

    Since we’re so close to Detroit, I too am glad per our city charter that the city cannot lay off police officers or firemen/firewomen.

    As “Wanting For a Better Dearborn” states, Dearborn voters gave the city the right to sell Dearborn Towers. Yes the timing is bad, but since the city is facing a projected $20 million budget deficit for the 2010 and 2011 fiscal year (July through June), and since there seems to be no end in sight for this recession, and the city may have to eliminate a large number of services and amenities, I don’t think the city has many other options at this point but to sell the Towers.

    In numerous meetings this year I have heard the mayor state that the city has repeatedly approached Milford Township supervisors asking to have Camp Dearborn rezoned from recreation to either commercial and/or mixed use but Milford always turns this down. The mayor has stated that the Camp being zoned recreational makes it worth maybe a max of $25 million, yet it if was rezoned to commercial or mixed use it might be worth $50 million.

    Based upon the financial figures I recently saw on the Camp, the golf course which used to make money to supplement Camp, has lost millions of dollars the past 2 years. Knowing that and the fact that in all my most recent visits to Camp there aren’t 1/20th the number of people as there used to be there using it, it is surprising that the Camp makes money.

    But what we need to remember is that the Camp has oil wells out there pumping in around $300,000 profit to the Camp per year and that the profit the city talks about that Camp has made the past 3 years is operational expenses profit only. This simply means that the city uses another fund to pay for all the improvements in Camp. If they added in the expenses of upgrades/repairs/enhancements the city has done to Camp the past few years, it is highly likely that the Camp would not be making a profit.

    And in order to sell the Camp, even if Milford changed the zoning, like the Dearborn Towers, it is the voters of Dearborn who must give the city permission to sell the Camp.

    Lastly, we need to remember that during the Orville Hubbard years, Hubbard purposely under assessed residential properties and a much larger Ford Motor Company than today paid well over 80% of our city property taxes. Today we have a much smaller Ford and due to a state law change way back in the late 70′s or early 80′s which ruled against Hubbard’s taxation of Ford, Ford now pays approximately 20% of all city property taxes.

    Recently Ford appealed the amount of their taxes again and a judge agreed, which means Ford is going to pay $4+ million less in property taxes, which is going to further devastate Dearborn and some other cities nearby.

    The part I am not clear on and I am hoping someone can inform me about is that when I look at a detailed map of Dearborn it appears that all Ford properties take up well over 40% of the properties in Dearborn. So why does Ford only pay 20% of the property taxes in the city???

  • MyTwoSenseToo

    Michael D. Albano

    As usual, you bring forward the facts and common sense. I was beginning to think the only thing on this blog that provoked any real interest was “chickens in garages”.

    You have an interesting question. Sorry, I don’t have the answer but I have a couple questions that maybe you know the answer to.

    Does the city still have a large “Rainy Day Fund” or has it been depleted like I suspect?

    Is it true that the city is joining other cities to sue the State Tax Tribunal to reverse its’ decision?

  • Michael D. Albano

    MyTwoSenseToo,

    I have been informed by a contact that the city has approximately $23 million in reserve (rainy day) funds. The city has had to use a few million of it the past few years to cover budget shortages.

    Based upon what I have read, the city is not suing anyone. The city of Dearborn has contacted Ford in an attempt to resolve the tax dispute issue. The original article about it in the Times Herald is below:

    http://downriversundaytimes.com/2010/09/04/property-tax-rates-in-dispute-for-automotive-companies/

    Also, related to just how bad it is in Dearborn and other areas, below are some excerpts I’ve taken from an article.

    The 10 American Industries That May Never Recover

    by Douglas A. McIntyre
    Wednesday, September 15, 2010

    It has become clear that jobs in some industries may never come back, or if they do it will take years or decades for a recovery.
    24/7 Wall St. examined the Bureau of Labor Statistics’ “Employment Situation Summary,” and a number of sources that show layoffs by company and sector. The weakness in these sectors will make it harder for the private industry, even aided by the government, to bring down total unemployment from 9.6% and replace the 8.3 million jobs lost during the recession. The losses in these industries have to be offset by growth in others before there can be any net increase in American employment.

    Some of the industries are obvious. Detroit will never employ the number of people it did five years ago. Domestic car sales hit 16 million in 2005 and 2006. That number will be closer to 11.5 million in 2010. More cars and light vehicles are made overseas now, in places like Mexico, to keep labor costs down.

    1. State and Local Government Jobs. The level of unemployment in this sector continues to rise. Budget imbalances in a number of states have already caused mass layoffs as tax receipts have dropped sharply. A recent report by the National Governors Association and the National Association of State Budget Officers found that 22 states furloughed employees and 25 laid off workers during fiscal year 2009-10. As an example, California slashed its workforce by tens of thousands — some were laid off permanently and some are out of work and may be recalled. Former eBay CEO Meg Whitman, who is running for governor of California, said she will cut the state workforce by another 40,000 and sharply cut pensions for new workers. Forty-six states face budget shortfalls that will total $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities. Municipalities face similar difficulties as property taxes plummet.

    4. Automotive Manufacturing. General Motors has cut over 100,000 people since the beginning of the recession in December 2007. Ford has cut over 20,000 and Chrysler 15,000. This does not include foreign car companies with workers in the U.S. By some estimates, every car company worker layoff leads to three more layoffs in related industries that supply the car and light truck manufacturing business. That includes hundreds of car dealerships that have been closed in the last two years.

    5
    6. Big Telecom. AT&T, Sprint-Nextel and Verizon have passed their peak employment levels. Employment in the sector will not recover and could shrink for two reasons: (1) The landline business is falling rapidly as home phone users move to VoIP, and (2) Increased adoption of cell phones. The cellular subscription business has been damaged by price wars meant to gain market share in the wireless industry — one that has stagnated due to a 90% market penetration in the U.S. Sprint made substantial cuts as it posted three years of losses. The most recent was 2,500 people in November last year. In 2008, AT&T said it would lay off 12,000 people. Verizon recently said it would fire 13,000 employees from its land line business.

    7. Newspapers. The layoffs in newspapers began in the 1980s as presses became more automated and tens of thousands of pressmen lost jobs. More recently, the changing habits of news consumption have increased Internet readers and hurt print, which has caused more job losses in press rooms. Reporters and editors have lost work as print subscribers have stopped paying for what they can get online for free. One recent study claims that the newspaper industry employee base fell from 767,000 jobs in 1998 to 619,000 jobs in 2008. The U.S. Department of Labor has forecast another 120,000 newspaper layoffs over the next 10 years.

    9. Realtors. The National Association of Realtors reports that there were 1,370,758 realtors in October 2006 — the peak of the market. By the end of 2007, the figure was below 1.2 million. The number is below 1.1 million today and has continued on a downward trend. Home prices have dropped so far and so few homes are sold, that the ability to make money in the business disappears by the day.

    10. Bank Tellers. Long before the recession, personal banking had begun to become automated. Over the last decade, banks have provided increasing access to banking accounts online, through call centers and at ATM kiosks. This technologically driven shift has been and will continue to be the chief cause of bank teller layoffs. According the the FDIC, since 2008, at the beginning of the recession, there have been 283 banks closed. Compared to the period 2000 to 2007, when only 27 banks closed, that’s nearly 10 times as many bank closings in less than half the time. And as of Aug. 20, state and federal regulators had closed118 banks this year, making it on pace to exceed the 140 banks closed in 2009. Although nearly all of these banks have been acquired by other financial institutions, bank branch closings still occur — employees and locations are consolidated. The single largest employee group at bank branches are bank tellers, and they will bear the brunt of the continued cost-cutting.

  • SameasItEverwas

    All of the devastation posted by Michael D. Albano was caused by liberal policies.Take a look at the states that are sinking,all run by liberal Governors or liberal congress in those states and their policies that collapsed the economy of their states. Michigan is another classic example,granholm ran this state into the ground as fast as the mack daddy is running dearborn into the ground. Just like those governors, he is addicted to blowing tax payers money until there is nothing left,then he will retire with a fat cat pension and leave the place in ruins just like granholm is going to do. Albano says the city is in bad shape but the mayor felt it necessary to fill upper management positions that have been left empty over the last 5 years,some were even created new,on top of that he decided it was necessary to give all the other upper management raises. Just like whats going to happen this November when the voters of this country vote to take out the trash,the same thing needs to be done in this city.

  • Number Five

    Number 5 on Michael’s list used to be “Community Organizer” but they removed it because of a bill that our president is going to encourage to subsidize thousands of Community Organizer jobs across the country. It’s going to be the next growth industry.