Automaker could invest $1 billion on new facilities, real estate sources say
Ford Motor Co. is embarking on a 10-year plan to modernize its research and engineering hub in Dearborn, Mich., and consolidate the majority of its 26,000 local employees there in reconfigured and updated office and testing space.
Real estate sources familiar with the plans told Crain’s Detroit Business that Ford could launch the estimated $1 billion reinvestment in the complex after selecting an architecture firm. Crain’s is an affiliate of Automotive News.
While a Ford Land Development Corp. representative said Friday there were not yet specific plans to announce, the project outlined in a request for proposals document suggests building improvements and new building construction, building demolition, infrastructure upgrades, more green spaces and gathering places, and added parking.
The complex includes engineering offices, testing labs, parking and ancillary buildings. The automaker plans to weigh architectural options on how to best reconfigure the campus.
Brokers and architects say the space is due for a makeover.
“Based on what I know about that environment and what they have accomplished since then, anything they can do to improve that core asset and development arena would be so positive for the community, for Ford,” said Mark Woods, COO of Detroit area real estate firm Signature Associates Inc. Woods spent more than a decade as vice president of Ford Land, the automaker’s real estate subsidiary, before leaving in 2003.
Ford requested that bidders submit two master plan concepts: One that retains the existing dynamometer building and the Research and Innovation Center, and another without that requirement.
The five-building research and engineering campus was developed in the early 1950s, and additional buildings were constructed over the years to meet increasing demand.
Overall, Ford owns 71 buildings totaling about 13.1 million square feet in and around Dearborn, according to a Ford request for fee proposals/qualifications for a new campus facility and workplace master plan that was issued in November and obtained by Crain’s last week.
CoStar Group Inc., a Washington, D.C.-based real estate information service, reports the Research and Engineering Center comprises 1.9 million square feet.
“We regularly evaluate ways to maintain, upgrade and improve our campus facilities to meet the needs of the business,” said Ford Land spokeswoman Dawn Booker. “At this time, there are no specific improvement plans to discuss or announce.”
However, the RFP provides insight into what could come to the center, which is across the street from Edsel Ford High School in the triangular area bounded by Rotunda Drive, Village Road and Oakwood Boulevard.
“To accommodate the increased number of employees at the REC, substantial changes will need to occur throughout the campus,” the RFP states.
The project also would redesign the space with more modern amenities, ranging from gathering hubs in the offices to outdoor walking paths.
The center, which currently has about 13,000 Ford employees working there, would require redesigned spaces to reflect “the latest workplace trends and changing technologies in order to improve employee retention and the attraction of new talent.”
Ford is not the only Detroit automaker undertaking such a large overhaul of space.
In May, General Motors announced a $1 billion investment at its Warren Technical Center that is expected to create 2,600 jobs as part of a $5.4 billion investment plan at U.S. operations.
Work at the 60-year-old campus — the nerve center for GM’s global vehicle development that is home to engineers, designers, information technology workers and other employees — is expected to be complete by 2018.
It’s not clear from the RFP when the Ford engineering campus work would begin, or a final target budget, but it is envisioned as a 10-year plan.
The Ford RFP also says that the master plan must make the campus pedestrian-friendly and include “safe and attractive gathering places.”
Walking paths, water features and other green spaces and landscaping are to be incorporated into the design.
Modern work sites
The GM and Ford projects are examples of automakers adapting to more competition for talent and other factors, architects said.
Bob Kraemer, principal of Detroit-based architecture firm Kraemer Design Group PLC, said employers are increasingly considering workplace design as a key factor in attracting and retaining employees.
“We have, for about 20 years, over and over heard that when we do renovation of office spaces, after the fact, it helps with recruiting and retention,” Kraemer said. “It wasn’t done for that purpose, but it was definitely a side effect, and today, we actually pitch concepts that way.”
He said automotive companies are actually “the furthest behind (in updating their spaces) because of the legacy thinking.”
Ford’s move to renovate and modernize its space is a shift in the right direction for the 112-year-old company, said Matt Rossetti, president of Detroit-based architecture firm Rossetti Associates Inc., which has done interior design for Ford in the past.
“Ford, just like all the autos, had forgotten about design and quality,” Rossetti said. “They were so unbelievably boring, French vanilla spaces, tall cubicles.”
Rossetti said that on one Ford project, with a limited budget, his company came up with a “really inventive solution that came in on budget.”
But Ford didn’t react well, Rossetti said.
“They said the design was too interesting, that it looks like they spent money, and they don’t want their shareholders thinking that they spent money on themselves,” Rossetti said.
That’s not the right mentality to project — an inferior working environment sends a message to workers that they don’t merit the investment, Rossetti said.
“How could you possibly expect productivity to be anything other than terrible? I’m being a little dramatic, but frankly, the results are pretty much the same.”
When Kraemer Design Group was talking with Covisint Corp., a spinoff of Compuware Corp., about its new headquarters in suburban Detroit, space that could be used as a recruitment tool was an active selling point, Kraemer said.
It was the same with another client in downtown Detroit, the Archdiocese of Detroit. “It was the exact same situation,” he said. “They were in old space and they were having trouble recruiting people.”
A Ford Motor Co. RFP summarizes what a redeveloped campus and master plan for the automaker’s Research and Engineering Center in Dearborn should look like. It’s envisioned as a 10-year plan, but a specific construction timeline hasn’t been disclosed. Among the work expected:
— Improvements to office and testing space
— Building demolitions
— Infrastructure improvements, ranging from features that reduce energy use to walking paths
— Construction of new, state-of-the-art buildings
— More parking
— Consolidation of employees into a more densely occupied campus
— A phased redevelopment plan that ensures operations can continue smoothly for product development and testing during construction
Source: Ford Motor Co. Request For Proposals/Qualifications, November 2014.