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ANN ARBOR, MI-Though it will somewhat hurt the city in the short term, the recent purchase of the two-million-square-foot former Pfizer complex here by the University of Michigan, announced Thursday afternoon, will ultimately bring thousands of UofM Health System employees and research companies to the property, local and state leaders agree. The school, which owns adjacent property for its North campus and had actually sold Pfizer’s predecessor, Parke-Davis, the majority of the 174 acres in 1957,is buying back the property from the pharmaceutical company for $108 million.

Pfizer had announced in January 2007 that it would shutter the complex, which includes 30 office, laboratory and manufacturing buildings, by late this year. The company had numerous walk-throughs with potential buyers, including UofM and Forest City Enterprises Inc. The university will now take over the ghost town of a property, and expects to close by June after due diligence and compliance with state and regulatory compliance. The recent deal includes $12 million from the university to clean up any potential environmental problems.

University officials said in statements that they will use buildings currently on the property. “We have been building and renovating across our campus to meet the need (for health research facilities), but we have struggled to keep pace with the incredible productivity of our faculty and staff,” says Dr. Robert Kelch, the university’s EVP for medical affairs and CEO of the UofM Health System, in a statement. “This new space presents and unprecedented opportunity to fulfill their needs now and in the future, to recruit new faculty and their teams to our institution, and to develop our region’s power as a magnet for high-skill workers.”

The UofM Medical School dean, Dr. James Woolliscroft, will preside over a committee in 2009 to determine how to best integrate existing and newly arriving researchers whose interest are complimentary to how the university will use the space. “We will not rush to fill the space,” he said in a statement. Though the laboratories left by Pfizer are nearly in the configuration and condition needed, he said, some renovations will be needed.

He and other university officials said there will be extensive efforts to bring in private companies to the site to help build the bioscience research corridor in Ann Arbor. The specific uses for each of the buildings will be set after careful deliberations next year, Kelch said. The university will attempt to attract existing business to locate at the facility.

Leaders from the state and local community praised the site purchase, and the university’s promise to bring more than 2,000 workers to the property. “The new facility will give scientists an exceptional site where they can conduct critical health and biomedical research, and it will attract new business and development in the region,” says US Sen. Carl Levin, D-MI.

While the state has undergone a massive economic crisis, with almost 10% unemployment spurred by the troubles of the automotive industry, Ann Arbor, home to one of the largest and most respected universities in the country, has been a bastion of success for the Southeast Michigan region. The city’s office and retail markets, while taking a small beating, are still doing much better than the rest of the region, and companies such as Google are still attracted to locating in the city.

Mayor John Hieftje tells GlobeSt.com that he mourns the loss of millions of property tax dollars to his city, as the university will not pay property tax, but he rejoices in the promise of thousands of jobs. “All of our taxing authorities, including the city and the schools, will be hurt by this,” he says. “Pfizer paid $12.5 million in property taxes in 2008, and will pay about $9 million next year, but after that, it’s gone. But, the long term prospects are good, at least someone took the site, I know they were having trouble selling it. We’re doing well, I wouldn’t trade our position with any other city in the state.”

When Pfizer made its announcement last year, it made a large commitment to the city and various regional groups that it would find a buyer, and not let the massive complex sit vacant for long. Jesse Bernstein, president of the Ann Arbor Chamber of Commerce, tells GlobeSt.com that having the site back in play means a lot to the city. “More jobs means more opportunity, and better markets for everyone, including housing, the office market, everything,” he says. “It’s an incredible amount of space to fill, and we should see a lot more life-science and bioresearch companies come in to help fill the space, and maybe even see more development at the property. It’s in a great location, at Plymouth Road just off the State Road 23 exit.”

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