CHICAGO -- Wayne County, Mich. has abandoned work on a $300 million bond-funded new jail in downtown Detroit and formed a task force to study alternatives for the jail and cost overruns.
The task force comes after the county prosecutor’s office announced it was launching an investigation into the failed project.
The county ordered a 60-day work stoppage on the new jail in June after contractors said the budget was up by nearly $100 million. Wayne County currently operates three jails and had hoped to save money by consolidating services and costs at one facility in downtown Detroit.
The county issued $200 million of recovery zone economic development bonds in late 2010 to finance the project.
The new task force will examine the cost overruns and consider alternatives for the new jail. County officials have already named several possibilities, including selling the downtown site and leasing an abandoned state prison outside Detroit called Mound Road.
Several private investors, including prominent Detroit businessman Dan Gilbert, the Quicken Loans founder, are interested in taking over the site for their own development.
The county commission authorized a $300 million borrowing, but the additional borrowing hasn’t yet been needed. Original estimates put the cost of the project at $220 million, but the contractors estimates by mid-summer had climbed to $410 million.
The county has so far refused to release the audit.