Ever want to own a domed football stadium?
The question was a plausible one Monday when it was announced that the Pontiac Silverdome — once home to the NFL’s Detroit Lions — was sold for $583,000, or about 1 percent of the $55.7 million it took to build in 1975.
The Silverdome, an 80,300-seat stadium located in Pontiac, Mich., is the latest example of how comprehensively the recession has socked southeastern Michigan.
Mass layoffs and automotive plant closures have wreaked havoc on the local economy. Budget deficits are deep, foreclosures are widespread, and the population shrinking – from about 2 million people in the 1960s to about 900,000 today.
“It’s certainly one of the most severe points in [the area’s] history, because of the economic crisis and the falling housing prices,” says Mark Skidmore, professor of economics at Michigan State University in East Lansing. “There’s been a massive exodus and the ones who are left are those who, by and large, are [lower] income.”
The foreclosure crisis started in the communities servicing the auto plants, but is now spreading to more affluent areas, says Jamele Hage, who is currently running a mortgage foreclosure program for Wayne County that counsels residents and works with lenders to renegotiate loans.
“We’re not just talking about blue collar workers anymore, we’re talking about well-paid, white collar professionals,” she says.
This year in Harper Woods, located west of Detroit in Wayne County, property values fell 19 percent. City Assessor Gerald Owczarzak says he expects values to fall another 19 percent in 2010.
“Every city’s been hit,” says Mr. Owczarzak. “In our city we have our share of foreclosures. Fortunately, we have people buying which is good. People are getting great deal on homes. But that is what is causing assessments to drop.”
The depth of the real-estate crisis also led to the collapse of the value of the Silverdome, which was considered to be worth $20 million as recently as last year and at least $3 million now. An Oakland County judge has halted the sale until at least Monday. A rival buyer filed an injunction to block the sale.
The city of Pontiac now owns the stadium and is keen to offload it because of high maintenance costs.
The more poignant indicator of Detroit’s economic slide, however, is the number of foreclosures. Across the four counties of southeast Michigan, there have been 150,000 this year.
The speed of foreclosures is ruining property values, Ms. Hage says. Home prices for resales are dropping on their own, but not precipitously. The average home sale dropped to $84,000 from $94,000 between 2006 and today, according to the Detroit Office of Foreclosure Prevention and Response. But foreclosed properties are worth one-fourth of what they were worth in 2008 – $12,000 today versus $48,000 in 2008. [Editor's note: This paragraph was adjusted to correct a mathematical error.]
“That’s what’s devastating our community,” she says.
But Hage is hopeful that foreclosures will slow, leading to a turnaround. Already, her program helped 2,100 families stay in their homes this year – a 60 percent retention rate. Her counselors get a warm reception at union halls, churches, and community centers.
“I thought it was going to be failure, but it’s cathartic,” she says. “People love it, they say,… ‘I’m not alone.’ ”
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