Buy of the Century
The U-M's fabulous Pfizer deal
by Yma Johnson
The U-M made out like a bandit on its purchase of the former Pfizer research complex. In 2001, the university sold fifty-five vacant acres near North Campus to the drug giant for $27 million, and the company announced plans to add $600-$800 million worth of new facilities there. Pfizer was still building in January 2007, when it announced it was closing the 3,100-person Ann Arbor operation. Now it's agreed to sell the entire 174-acre complex to the university for $108 million. In effect, the university got 119 acres-and thirty research buildings-for $81 million.
While it's clear the university got a steal, it's hard to quantify just how much Pfizer lost. Rick Chambers, the company's director of media relations, says he can only "confirm that the sale price is $108 million, representing a long-term capital loss." Just how much, he says, is "confidential business information." But doubling the city's assessed valuation of the land and buildings gives an estimated market value of $477 million. By that standard, the U-M paid less than 25 cents on the dollar.
The university is still reviewing details of the purchase, which is expected to close in June. The U-M News Service says the university will begin to move equipment and per-sonnel into the complex late this year. If tentative plans for a new biomedical research building on the site come to fruition, construction could begin in 2014. The entire move-in is slated for completion in 2018.
[Originally published in April, 2009.]