Towering Debts

Renaissance Center defaults

"Renaissance Center stands as a symbol of what is possible when people who live and work in a city combine their efforts toward a common goal." So said Michigan Governor William Milliken five years ago of Detroit's new $357 million cluster of five glass towers, a 32-acre complex aimed at reviving the city's decaying downtown area. Now Ren Cen stands as a symbol of hard times. The center defaulted last week on its mortgage debt of more than $200 million by failing to make a scheduled payment of $10 million.

Built by a consortium led by Henry Ford II, Ren Cen consists of a 73-story hotel and four 39-story office buildings. Since it opened in 1977, the center has lost $140 million, prompting the Detroit Free Press to call it "perhaps the country's largest white elephant." Ren Cen first fell behind on its mortgage in 1980, but managed to renegotiate its payment schedule. Nonetheless, as unemployment in Detroit surged, the center remained in the red. Some 40% of its space for retail stores is empty; 95% of its office area is occupied, but only at deeply discounted rents.

Last April Ren Cen's owner, Ford Motor Land Development, announced that it was selling the center for $500 million. But the buyers, Chicago Lawyer Theodore Netzky and two partners, failed to raise money to close the deal and are still looking for investors. The mortgage holders, four insurance companies and Ford Motor Credit Co., are meeting to consider options other than foreclosure. This file is automatically generated by a robot program, so viewer discretion is required.