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A growing dream of urban farming: Financier Hantz wants to plant $30M into vacant lots

By Nancy Kaffer | Crain's Detroit Business

John Hantz plans to develop the first large-scale commercial farm in the city of Detroit. He plans to invest $30 million over 10 years.

Photo credit: Garrett MacLean

John Hantz's morning commute starts at his home in Detroit's Indian Village and ends at the Southfield office building that houses the Hantz Group, a financial services company.

Along the way, the financier drives the city, passes through some of Detroit's most-devastated neighborhoods, stopping at traffic lights and getting a clear view of dilapidated or derelict houses, vacant and overgrown lots.

Hantz is a Detroiter, but he's also a businessman, the kind of guy who keeps his eye on the bottom line.

By this time next year, he says, some of that land could be transformed, becoming the first phase of Hantz Farms L.L.C., an ambitious commercial farming operation that Hantz says can turn a profit.

“We have to move as a city from knowing why everything won't work to knowing why it will work,” he said. “At some point, we have to step into the fire.”

Hantz has been buying property on Detroit's east side, and plans to open shop with a 77-acre, noncontiguous farm growing food, trees and energy products — provided a few key pieces fall into place.

“We're down from a couple of hundred things that have to happen to a few things,” he said.

Hantz says he plans to commit $30 million over the next 10 years to bring the farm to fruition, with the end goal of 5,000 acres, said Hantz Farms Senior Vice President Matt Allen. Costs have averaged roughly $3,000 an acre, Allen said.

Chief among the unfinished business for the project is an alteration of the city's existing tax structure. At almost 82.97 mills, Detroit's commercial tax is the highest in Southeast Michigan.

“There has to be farm property tax parity,” Hantz said. “It's not going to be a special deal, but we need at least parity with areas of agriculture ... but I think most people will find that very reasonable.”

Hantz says the land he's purchased — both Hantz and Allen have been reticent about the precise location of the property, acknowledging only that it's on the city's east side, that acreage will be grouped into “pods” and that no relocation of residents has been involved — is now returning little or no tax revenue to the city.

But Detroit Mayor Dave Bing's not ready to commit.

“I'm not 100 percent knowledgeable about the agricultural (tax rate and) farms,” Bing said. “I need to study that more, to make sure, because even though that sounds like it's a good idea, I've got to talk to many more people to make sure that's the direction we want to go in.”

Detroit Economic Growth Corp. President and CEO George Jackson said a tax rate change is fine, as long as the land's being used to farm.

“We're not getting much tax from the land he's talking about anyway, so it's not like a major source of revenue for the city,” he said. “But if there was a day that it wasn't used for agriculture, I would want it to go back to the regular tax rate.”

Without a tax rate change, the project is dead in the water.

“I think that it will be a deal-breaker,” Hantz said. “What I would say is, it would not be practical.”

That's the crux of the financier's plans: While the urban farm has an element of altruism, it must also turn a profit.

Allen wouldn't give revenue projections for the farm's first years of operation, but Hantz said there's copious business information available on farming, albeit not urban farming.

“We had to make it profitable and sustainable, so let's go see what normal farmers are doing and how normal farmers stay in business, target costs around acquisitions you can afford, land quality,” he said.

Hantz said he's enlisted experts from Michigan State University and the Kellogg Foundation to assist with the project.

Allen said soil testing is under way to determine which parcels are suited to edible products. Hantz says the soil conditions have surpassed expectations.

For Hantz, urban farming is one part of the answer to a complex question.

“We don't have scarcity (in Detroit),” he said. “We don't have to take action on anything. There will always be another house for sale, always be another piece of property, always be another opportunity. So how do we create scarcity? We need a big project that takes a large chunk of property off the market in a constructive way.”

Land reuse, Hantz said, also must incorporate for-profit operations.

“Detroit has hit a renaissance,” Hantz said. “We are probably the best-equipped city in the country around good leadership in nonprofits, but people don't want to lose firemen, don't want to lose policemen ... so then something has to be for-profit. I see (the farm) as a way to anchor, deal with the blight and, in essence, attract new residents.”

The farm should spur additional development, he said, from other farming ventures to residential projects that could benefit from the farm's proximity.

“This is only one part of what needs to be multiple ideas like this in Detroit,” he said. “These things have got to work in concert, like the development idea. We're not interested in doing the development. Other developers need to step up, because this farm is going to take up all of my time.”

“I want to be able to stop at the light and think, "I made the right decision.' “

Nancy Kaffer: (313) 446-0412, [email protected]

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