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Land Swap Seeks to Reinstate Construction of New Jail in Detroit

A three-party land swap has apparently cleared a logjam that has left the Wayne County jail in Detroit unfinished since 2013. The county commission voted in June 2018 to ratify a deal made by County Executive Warren Evans with the City of Detroit and a company owned by billionaire developer Dan Gilbert, who also owns the Cleveland Cavaliers NBA franchise.

Construction was halted on the county’s new consolidated criminal justice center in June 2013 after overruns threatened to push the project’s cost to $391 million – nearly double its $220 million budget. The project has sat uncompleted while the county searched for a way forward. Only one bidder – Walsh Construction – responded to a request for proposals to complete the existing project, which sits on Gratiot Avenue in downtown Detroit.

Under the deal, city officials will swap a 13-acre site north of downtown for a county-owned property on the city’s west side, which served as headquarters for American Motors Corp. before it was acquired by Chrysler Corp. in 1985. The county will then give Gilbert’s firm, Rock Ventures, the completed buildings in the failed jail project, selling the firm the rest of the land. In turn, Rock Ventures will build a new criminal justice center on the 13-acre parcel, agreeing to cap the county’s expenditures at $380 million. Gilbert’s firm also agreed to pick up the tab for a $500,000 stipend the county had promised Walsh Construction.

Gilbert and Rock Ventures made the initial proposal in 2017, but the deal hit a snag when the city’s Board of Education refused to sell the company a site it also wanted that sits adjacent to the unfinished jail project. Rock Ventures will now purchase the 1.34-acre site, valued at $130,000, for $200,000. The new jail carries an estimated price tag of $533 million, which is higher than what the county is obligated to pay. But there are also parking revenues from lots around the new site, of which Gilbert’s firm will get the first $30 million annually. The new jail also requires an upgraded HVAC system to mitigate bad air quality at the site.

The county’s new criminal justice complex will include a 2,280-bed jail, 25 courtrooms and five hearing rooms, plus offices for the sheriff’s department and the county prosecutor. A 160-bed juvenile detention facility will also be part of the planned construction.

Wayne County has about $50 million available from the unspent proceeds of bonds sold to finance the existing jail project, which the IRS says it can use for the new deal. The rest of the funds will come from the county’s general revenue and new bond sales, though Evans said they are “still kind of dabbling” about the exact arrangements.

Until the new jail’s completion in 2022, the county will pay $1.00 annually to lease the buildings it is transferring to Gilbert’s company – the Division I and II jails, a juvenile detention center and the Frank Murphy Hall of Justice.

A lawsuit to stop the deal, filed by a neighbor of the new jail site, Nicholas Miller, was dismissed by a judge in November 2017. The county has announced plans to hold more community engagement meetings about the construction project, which was expected to begin in October 2018.

“We made the best of a tough situation and have a definitive path forward to address the failed jail project. It’s been an albatross for the county for far too long,” Evans stated.

The convoluted land-swap arrangement indicates how far local officials are willing to go to ensure the new jail complex is built – and, presumably, filled with defendants awaiting trial who are too poor to post bond. 

Sources: www.michiganradio.org, Detroit Free Press, www.clickondetroit.com, www.crainsdetroit.com


 

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