DETROIT — Amid General Motors' restructuring and cost-cutting efforts last year, the automaker also was in talks to sell its Renaissance Center headquarters, Automotive News and Crain's Detroit Business have learned.
The biggest U.S. automaker was in discussions to sell its glass-towered complex here to billionaire businessman Dan Gilbert, according to four people familiar with the matter.
Talks between GM and Gilbert in the fall did not advance far, at least in part because the complex built in the 1970s and early 1980s by Ford Motor Co. under then-Chairman Henry Ford II requires substantial upgrades, including a costly overhaul of the heating, ventilation and air-conditioning system, said three of the people, who asked not to be identified because the talks were private.
One of the sources said a sale to Gilbert could happen down the line, and another said GM is not believed to be seeking other buyers.
GM, in an emailed statement last week, declined to comment on the discussion and emphasized the "significant investments and improvements to areas within and around its headquarters."
"As a downtown Detroit-based company, we have regular discussions with other leaders and organizations about the city's ongoing development," GM said. "We won't share the details of those conversations or comment on speculation about specific discussions."
Bedrock, Gilbert's real-estate development, ownership, management and leasing company, said in a statement that it does not "comment on rumors or speculation." The company has a portfolio of more than 100 properties — primarily in and around downtown Detroit — with more than 15 million square feet of space. It is also developing billions of dollars worth of new buildings downtown.
Gilbert's decade of purchases is in stark contrast to the trend at GM, which has heavily invested in the city and region but has looked to sell or potentially shutter some operations, including a Courtyard by Marriott hotel across from its headquarters and its Detroit-Hamtramck Assembly plant. The factory is scheduled to end production by January, pending negotiations with the UAW this year.
GM has made substantial renovations to the Renaissance Center, however it canceled plans for a 120,000-square-foot addition in 2017. The company also halted reinvestment last year at its famed design studios in Michigan and another project to update its global propulsion headquarters in an effort to save money.
GM's recent cost-cutting measures, including potential closures of five North American factories and the slashing up to 14,000 jobs, are a major part of the company's plans to save $6 billion in annualized spending by 2020.
The last time there were reports about GM possibly selling its Motor City headquarters was as the company prepared for bankruptcy in 2009. It did not occur in part because of the negative impact it would have on the city's downtown.
GM purchased the 5.5 million-square-foot facility reportedly for more than $70 million in 1996, after Ford sold it in the early 1980s to an investor group. By 2004, GM had completed $500 million in renovations there, according to its website.
When built, the modernistic Renaissance Center was known as "a city within a city." It was meant to revive Detroit's downtown and economy following civil unrest in the late 1960s.
Kirk Pinho is a reporter for Crain's Detroit Business, an affiliate of Automotive News.