India-based automaker Mahindra plans to revitalize Flint's Buick City in a deal that could lead to 2,000 jobs.

Mahindra North America Inc. signed a letter of intent with RACER Trust to build a plant what is expected to be a $1 billion investment on the remaining 364 acres of the site, which was once the home to the majority of Buick's operations before operations ceased in 2010 following the General Motors bankruptcy.

Rick Hass, president and CEO of Mahindra North America, said the plan calls for the construction of a 1 million-square-foot facility with expectations to build another 1 million square feet in the future. He declined to discuss the investment total, but plants in similar size result in a $1 billion-plus investment, according to Crain's research.

"The investment size depends on how you manage it, whether it's a lease versus buy," Haas said. "We're weighing options. We're taking with the state of Michigan, but Mahindra is a $20 billion multinational company. They have the ability to self-finance if we choose to go that way. There are all kinds of ways to make this happen."

Mahindra is out of capacity at its Auburn Hills plant, where it manufactures an off-road vehicle called the Roxor, and requires more production space, the company said in a news release. It's also looking to bring more of its international offerings to the U.S., Haas said. He declined to reveal the company's product planning, but said there is interest in producing a commercial van and Mahindra's Marazzo, a front-wheel drive, body-on-frame compact crossover at the plant.

Mahindra also manufactures the GenZe brand of electric bikes and scooters, which could also be produced at the Flint locations, Haas said.

"Our story wants to be a mobility story," said Richard Ansell, Mahindra North America's vice president of marketing. "Probably sell large commercial vans to last-mile mobility options."

Mahindra would also move Roxor production to Flint and its Auburn Hills plant would serve as a product incubator, Haas confirmed.

However, Mahindra's expansion is highly contingent on its ability to secure a $6 billion contract to build next-generation delivery vehicles for the U.S. Postal Service. Mahindra is one of six finalists for the contract, which includes a 20-year parts supply deal, to build 180,000 delivery vehicles. USPS is expected to make its decision later this year.

Another finalist for the contract is Cincinnati-based Workhorse Group Inc., which plans to revitalize GM's idled assembly plant in Lordstown, Ohio, if it wins the contract.

The Buick City deal also seems to be in jeopardy unless Mahindra can secure tax incentives. The company said in the release that it's evaluating other sites as well and that where it invests "will be driven in part by the financial incentives that are available from the State of Michigan."

"Winning the USPS contract is a key element of our growth strategy but it's only a piece of what we have planned," Haas said in the release. "We have a long-term product plan and we believe the former Buick City site in Flint is a strong contender for what would essentially be Mahindra's first large scale manufacturing operation in the United States."

But Haas said the Flint project would likely continue even if it didn't secure the USPS contract.

"The postal service being a guaranteed revenue stream over six years means I have a nice mule to carry the rest of the auto business into the U.S. — makes it easier to talk about financing, etc.," Haas said. "If we were to get all that contract or a substantial piece of it, that provides a mechanism to bring the rest of the company into the U.S. If we don't get that contract … that means we go about it in a different way. Which product we would do would shift around, the order would shift around. It's not an on-off switch, but we have contingency plans for how we go forward on this."

Haas said the company evaluated locations in Detroit for the expansion but could not find contiguous land large enough with access to rail for its plan. He also eliminated any Greenfield sites from their planning.

"I rejected any Greenfield sites. Cutting any forest to put a plant up is not on my radar," Haas said. "We are looking for a site we can repurpose. A site where if we went into the area, it would mean something to the people there."

The Mahindra plant would be the second investment recently at the former Buick City. Southfield-based Lear Corp. opened a $29 million plant last year on 33 acres of the property. The 156,000-square-foot building opened in August at 902 E. Hamilton Ave. and is expected to employ more than 600.

The remaining Buick City property is a shade over 364 acres, according to marketing materials on the website of RACER (Revitalizing Auto Communities Environmental Response) Trust, which was created in March 2011 to clean up and dispose of 89 GM properties during the Detroit-based automaker's 2009 bankruptcy.

Plans for a $23 million "eco industrial park" on about 140 acres at the site were announced in February 2018. The project, led by the Charles Stewart Mott Foundation, did not come to fruition.

Buick City was originally developed in 1903, with automotive production on the north and south sides of East Leith Street. South of Leith, production stopped in 1999; north of Leith, it halted in 2010, and most of the buildings on both sides of the street have been demolished.

The site has faced environmental challenges recently as polyfluoroalkyl and perfluoroalkyl, or PFAS, were found on the property in April 2018.

PFAS were created in the 1940s and have been used by a variety of industries since. In some cases they can have adverse health effects, according to the U.S. Environmental Protection Agency. Those can include things like increasing the risk of thyroid disease, high blood pressure in pregnant women, kidney and testicular cancer, increasing cholesterol levels and decreasing a woman's chance of getting pregnant, according to the state.

A spokesman for RACER said the group "continues to find PFAS in various areas and (we are) working to pinpoint the source(s)."

"A lot of the sampling that we hoped to get done in the spring and early summer was pushed back because of the very wet conditions," Bill Callen, the RACER spokesman, said in an email.

A statement from the trust says environmental conditions "do not pose an impediment to the reuse of the property for industrial purposes."

"Before the remainder of the former GM Buick City property is sold, institutional controls will be in place to protect the health and safety of new end users and to safeguard the long-term integrity of any remedial measures."

Haas said Mahindra is concerned about the environmental issues on the site, but believes RACER Trust will mitigate those issues.

"RACER is really on the job on this. They are out doing what they have to do. Work done continuously on that site for a year almost," Haas said. "We met with them and they are taking the clean up out there very seriously, because they know I don't want to end up with residual liability on a site that is basically a 100-year old manufacturing site."

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