According to records in 36th District Court in Detroit, there were hearings on the rent issue on Aug. 6, Sept. 4 and Tuesday, the last of which a representative for Palazuelo’s Arte Express Detroit LLC was not present.
A default judgment was entered that day.
A copy of the judgment says that Arte Express had not paid its $1,250 monthly rent since February and also owes $845.27 in common area maintenance and other fees.
The building’s landlord, Rick Portwood, the owner of Detroit-based The Display Group Ltd., declined comment, as did its property manager, Liberty Property & Asset Management, based in Troy, and its listing broker, L. Mason Capitani Inc., also based in Troy. A message was left with Portwood’s attorney, Walter Graves, who handled the rent case.
CoStar Group Inc., a Washington, D.C.-based real estate information service says Arte Express Detroit took 2,500 square feet in the East Grand Boulevard building, which is about 105,000 square feet.
Palazuelo, who was born in Spain but makes his residence in Peru, has been late on property tax payments in the past.
Municipalities generally send summer tax bills in July, with payment due in September; winter tax bills are generally sent in December, with payment due in February. Unpaid property taxes result in a property going into a forfeiture period during which it can be redeemed, and foreclosure if property taxes aren’t paid for three years.
In February 2019, the Detroit Free Press reported that he was $185,000 in arrears, although a representative said those were due to storm water drainage fees, not taxes. County records show the properties were redeemed in May 2019. Motor City Muckraker reported in June 2014 that Palazuelo was late on more than $80,000 worth of property taxes.
His redevelopment efforts have been slow to materialize so far, although he has previously spoken about the Packard Plant project as one that would take 10 to 15 years and cost hundreds of millions of dollars.
The first phase, a redevelopment of the former Packard Motor Car administration building, was already well behind its original schedule when the COVID-19 pandemic ground work on that building and across the state to a halt.
At the time of the administration building groundbreaking in May 2017, the project was expected to cost $23 million, including soft costs. Actual construction is expected at $16 million to $18 million. It received a 12-year tax abatement valued at $3 million, according to a Detroit Economic Growth Corp. document.
About a year later, there was a shake-up in the redevelopment project’s leadership in July 2018.
Packard Plant development director Kari Smith resigned, saying that construction predevelopment on the 121,000-square-foot had finished and more than 1,400 yards of contaminated debris had been removed.
Six months after that in January 2019, the iconic Packard Plant bridge over East Grand Boulevard collapsed and had to be torn down.
In June 2019, a Palazuelo-owned Grand Trunk Warehouse & Cold Storage facility at 1921 E. Ferry St. hit the market for $4.94 million to raise funds for the Packard Plant effort.