MI Foreclosures | Value Losses from Flood of MI Foreclosures Reflected in Auction of Silverdome

Pontiac Silverdome Auction

Reflecting the huge losses banks are taking on their inventory of MI foreclosures once resold on the open market, the recent auction of the Silverdome for just 1% of what it cost to build in the early 1970s reveals just how difficult things have become for commercial real estate ventures. However, that sale has been challenged by a rival buyer, and Oakland County Circuit Court Judge Edward Sosnick scheduled a hearing for Monday after issuing an injunction to halt the sale.

Home base to the Detroit Lions football team from 1975 until 2002, which cost $55 million to construct, it sold for just $583,000 to the highest bidder, a Toronto based investment group, Triple Properties, whose plans were to revamp it for men’s and women’s professional soccer teams.

The rival buyer, developer H. Wallace Parker of Silver Stallion Development, was approved to purchase the building over a year ago by the Pontiac City Council for $20 million (then reduced later to $17 million). However, the deal was vetoed by the city’s Mayor who felt the Development company lacked the funds necessary. Parker had plans to convert the dome into a race track and entertainment coliseum. The developer states it was prohibited from participating in the auction and claims the original purchase offer is still binding. Yet the city claims the contract has since expired, and the developer had not come up with the $250,000 necessary to participate in the auction.

The sheer numbers of continued defaults resulting in 150,000 residential MI foreclosures covering four counties this year alone is yet another rueful reminder as to what caused the value of the Silverdome to deflate so quickly.  Recent statistics show the value of Michigan foreclosure properties at just one-fourth of what they were in 2008 reflecting the steep decline over the last year alone.

With the onset of the economic crisis, communities linked to the auto plants were the first to take the hit, but the fallout is far reaching to the point it is now affecting even affluent areas. Though recent news claims the recession is near over, some feel it is nothing more than a short upturn before the recession cascades into another downward dip before leveling off. According to the Michigan Department of Labor and Economic Growth, unemployment for October was 15.1 percent; the highest in the nation. It is expected to continue to rise as local city governments wrangle with imminent layoffs of their own employees due to drastic budget cuts as a result of decreased tax based revenues.

In spite of the dismal statistics and continued decline of property values, thankfully, people still continue to buy homes. MI foreclosures are especially appealing to investors all over the globe who are keenly interested in the basement bargain prices they can get for these homes today.

The lowball offer for the Silverdome appears to be a dismal deal for the city of Pontiac. Hopefully, whoever wins the judgment of the contract will breathe new life into an old friend giving those who continue to reside here a renewed hope for a brighter Michigan future and a recovering economy where MI foreclosures become a thing of the past.