Published December 24, 2016 12:43pm EST
Betting On Motown: Peruvian Entrepreneur Buys Abandoned Auto Plant As Plan To Revive Bankrupt City
Peruvian Invests In Abandoned Packard Plant In Detroit
Fernando Palazuelo bought the plant for $405,000 and hopes it'll be a small down payment on the $350 million over the next 10 years to revive the plant, according to the New York Times.
At the heart of Detroit, America's largest bankrupt city in U.S. history, lies the shell of what was once the engine of Motor City.
The Packard Motor Car Plant was considered the crown jewel of the Packard Car Company which became in the late 1920's the dominant luxury car maker in the country, outselling Cadillac and other competitors combined.
But in the 1950s, the company filed for bankruptcy. The 3.5-million-square-foot factory was left behind and since then has become a 40-acre abandoned metaphor symbolizing the fall of Detroit from industrial powerhouse to a dilapidated and beleaguered city.
But Peruvian businessman Fernando Palazuelo sees things differently.
Palazuelo won a county-run auction and bought the iconic Packard property on December 31st for $405,000, a small down payment on the $350 million that he told the New York Times he needs over the next 10 years to transform the factory into a revived and successful new development.
A real estate developer, Palazuelo, could go by another name: "Dr. Revival." The 58-year-old specializes in buying broken-down buildings from South America to Europe and redeveloping them into businesses — especially in his hometown of Lima, Peru.
Now, his dream, as highlighted by the Times, is to turn Detroit's most iconic forgotten property into "a complex for light industry, warehouses, offices, and recreational activities."
He told the newspaper: "So many people have said to me that is the very last place I want to be investing money," he said. "But for me, Detroit is my new home."
And Palazuelo is not alone; the city has become the new home for foreign investors.
Chinese investors, for instance, are grabbing collapsed and abandoned homes in Detroit like shoes on a sale rack. News of the city's bankruptcy fueled social media buzz about an opportunity for investors to buy a slice of the American dream at bargain prices in what is currently one of the worst housing markets in the country.
Last summer, Chinese investors called Detroit brokers with inquiries about buying up to 200 properties at a time.
Even Michigan Governor Rick Snyder is looking for outside help.
The governor recently asked the Obama administration for help in enlisting foreign nationals to help save bankrupt Detroit. Snyder is seeking 50,000 work visas for the city over the next five years to go to people who are legally in the U.S. with advanced degrees or who show exceptional ability in certain fields — particularly in science and technology.
The difference between other investors and Palazuelo is the risk. The Peruvian entrepreneur faces a long road ahead helping transform the largest abandoned property in Detroit into a thriving metropolis again. He must convince businesses to overlook bleak neighborhoods surrounding the factory, determine how much of the plant is structurally sound and get investors and local officials to invest in his project.
A tall task but for now, he told the Times, he has hired security to monitor his property, as he begins to clean up the plant in sections, build an office, and an apartment for himself.