CHICAGO -- Wayne County, Mich. is expected to vote Tuesday, Nov. 19 on a proposal to sell an unfinished, bond-financed jail project in downtown Detroit to a private developer.
The agreement calls for a real estate company owned by influential Detroit developer Dan Gilbert to pay the county $50 million for five county-owned properties near downtown Detroit. That includes $20 million for the failed jail site, and $30 million for other properties, including the Frank Murphy Hall of Justice, two jails and a juvenile detention facility.
The county and Rock Ventures, the real estate arm of Gilbert’s Quicken Loans, signed a memorandum of understanding last Friday allowing 180 days to review the proposed sale.
The county would move its criminal justice complex to a state-owned former prison in northern Detroit called the Mound Road Correctional Facility.
Wayne halted work on the jail project over the summer amid cost overruns that drove budget estimates to more than $400 million from $300 million. The county has since sued the contractor to try to recover the $154 million it has already spent.
“There’s a lot of work to be done to make sure Mound Road is feasible for the county’s purposes,” Wayne County executive Robert Ficano said in a statement. “At the end of the 180-day period we expect to have a plan, including tight cost estimates, to present to the county commission.”
A county committee has already recommended approval for the project.
The county sold $200 million of taxable stimulus bonds in December 2010 though the Wayne County Building Authority, with debt service payments coming from cash rental payments from the authority to the county, according to bond documents. The commission authorized a $300 million borrowing, but the county never tapped the remaining $100 million.
The rentals constitute a full faith and credit limited-tax GO pledge of the county, but are subject to property tax limitations.
