DALLAS – Wayne County, Mich., has a green light to complete construction of a new county jail in downtown Detroit, which will require $200 million of bond funding.
The county said a site condition assessment showed it is structurally sound and "suitable for restarting construction next year."
"We are doing our due diligence to make the best possible decision for Wayne County and move this project forward," said Wayne County Executive Warren Evans. "These results strengthen the case for completing the jail and will be included in the information we provide prospective bidders on the project."
James Martinez, director of communication for Wayne County, said the county expects to issue bonds after a bidder is selected through the design-build request for proposal process.
"The RFP should be issued in January 2017 and we expect responses about 4 months after it is issued, which would be May 2017 at the earliest," he said.
The county government, which was released from state oversight in October, halted construction of the jail in 2013 after spending $151 million in construction, acquisition and design.
The county issued launched a request for qualifications process in September. Once the RFP is issued early next year, the county will not consider any alternative to the Gratiot site.
In May, Evans said the county would be open to moving the jail to another site to make way for a soccer stadium promoted by Quicken Loans founder and chairman Dan Gilbert, a major player in downtown Detroit real estate, only if it didn't increase the cost for Wayne County taxpayers and didn't delay the county's current timeline for completing the project.
"There's been no shortage of speculation about this project, but we're continuing to move forward with the Gratiot site," Evans said. "Once we issue the RFP, we're not looking back. It'll be full speed ahead on the Gratiot site."
The county has $510 million of long-term limited tax general obligation bonds and limited tax general obligation supported lease bonds. It also has $287 million of short-term limited tax general obligation delinquent tax anticipation notes. Moody's Investors Service rates $300 million of the county's long-term debt Ba2 after upgrading it one notch in September. It does not rate the county's short-term debt.
Fitch Ratings raised the county four notches to BB-plus in June.
The county entered the state consent agreement in August 2015 as it struggled with growing red ink. The pact allowed the county to work with the state to renegotiate contracts, improve its cash position, and reduce pension underfunding. The county has eliminated a nearly $100 million accumulated deficit and a yearly structural deficit of approximately $52 million by implementing the recovery plan aimed at aligning expenditures and long-term liabilities to match revenue.
