Plans are underway to transform a vacant parcel of land in downtown Detroit that was previously earmarked to house a bond-financed jail for Wayne County in Michigan.
The site, now owned by Bedrock LLC, Dan Gilbert’s real estate company, is to be developed to include a new academic building for the University of Michigan, residential buildings, a boutique hotel and conference center at a cost of $720 million.
In 2010, the county issued $200 million of bonds for the jail at the Gratiot Avenue site. The county halted construction of the jail in 2013 after having spent $157 million.
The city has seen a flurry of new developments which include another Bedrock led mixed-use development on the site of the former J.L. Hudson's department and redevelopment of the Book Tower and Book Building on Washington Boulevard.
“[Wayne County Executive] Warren Evans had the vision to move a jail off this site because he saw the possibilities of something better, and because of him, instead of 1,000 prisoners on this site, we’re going to have 1,000 graduate students,” Detroit Mayor Mike Duggan said at a press conference Wednesday.
The UM building — a $300-million, 190,000-square-foot research and graduate education center — is to be privately financed. The city has not been asked to provide any assistance at this point.
“At this point there is no city financial involvement in the UM building but I can't say ultimately with the financing will be,” said a source familiar with the project. “As far as the rest of the 14 acres, those plans are yet to be developed, so there is no city financing or borrowing in the picture at this point and certainly nothing has been requested.”
UM noted in a press release that development of the academic building is made possible by a major gift from UM alum and billionaire donor Stephen Ross, a Detroit native, and leadership gifts from Gilbert and other public and private sources. Ross is the founder and chairman of New York-based Related Companies. Gilbert's Bedrock real estate firm is the project's developer. Ownership of the site is to transfer from Bedrock to the university. Construction for the UM building is slated to commence in 2021.
Wayne County spokesman James Martinez said the project wouldn’t have been possible had the county not reached a deal with Rock Ventures to build a criminal justice center on East Warren Avenue instead of finishing the jail project at the Gratiot Avenue site.
“As far as the county’s role moving forward, it’s expected that Rock will eventually assign ownership of at least some of the Gratiot property it acquired from the County to U of M,” Martinez said. “Any such transfer of property involved with the agreement between Rock and the county for that property will require approval by the County Commission.”
Evans said Wednesday his administration aimed to get the best possible result at the failed jail site.
“Here we are on this once infamous former jail site that was designed to lock up members of the community,” Evans said. “Today that half built jail has been demolished at no expense to the taxpayers and we are ready to announce a major development that will unleash potential that we have in ourselves and the future.”
In 2018, Bedrock announced that it acquired the Gratiot site from Wayne County after agreeing to build a new $533 million criminal justice center near Detroit’s Midtown neighborhood. Since acquiring the site, Bedrock demolished the half-built jail structure and is currently using the site to support construction related to other in-progress developments in downtown Detroit.
Wayne County issued $280 million in bonds in August 2018 to help finance construction of the new jail complex. The county is also using $50 million of the remaining bond proceeds from the unfinished jail project. In 2010, the county issued $200 million of bonds for the jail at the Gratiot Avenue site. The county halted construction of the jail in 2013 after having spent $157 million.
The county's ratings, which had fallen to junk levels, have returned to investment grade. Moody’s Investors Service rates Wayne County Baa1. S&P Global Ratings rates the county’s issuer credit at BBB-plus and Fitch Ratings rates the county’s GOs BBB-minus.
