Wayne County, Mich., authorities say the Detroit Board of Education's refusal to approve a land deal won't interfere with its bond-financed jail project.
Officials from the Detroit Public Schools Community District had proposed selling a 1.34-acre parcel to Beaubien Associates, an affiliate of Dan Gilbert's Bedrock Management Services. Gilbert’s Rock Ventures LLC is proposing to build the county a new jail in exchange for a parcel of land in downtown Detroit.
The deal died Tuesday on a 3-3 school board vote, with one member abstaining.
Wayne County officials say that the small piece of land would have helped with the footprint of the project, but county spokesman James Martinez said it “does not prevent the criminal justice project from moving forward.”
The district was approached by Wayne County officials in October, according to information provided to the board. They expressed interest in the parcels in connection with the property swap deal between the City of Detroit and Wayne County for development of the Wayne County Justice Center.
Martinez said that the county is still working to finalize a deal with Rock Ventures to build the criminal justice center. He called the process “complex.”
Rock Ventures has proposed to build the County a jail, criminal courthouse, prosecutors' offices, sheriff's administrative offices and a juvenile detention facility in exchange for the downtown Detroit site the county had originally earmarked. The county halted construction of the Gratiot jail in 2013 after having spent $157 million.
In November the Detroit City council signed off on a deal for the county to acquire the land needed to proceed with the criminal justice center. Martinez said that the deal still needs Wayne County Commission approval.
“That approval would be contingent on having the Rock deal done,” Martinez said. “So I'd anticipate the administration bringing both the land swap and a deal with Rock before the Commission at about the same time, assuming a deal is reached.”
Under the land swap agreement, Wayne County would take ownership of a portion of a Detroit Department of Transportation property where the new jail would be built under the proposal being pursued by Rock Ventures. In return, the city would receive ownership of the 1.4 million-square-foot former American Motors Corp. site on Detroit's west side, which is currently owned by the county land bank.
Rock Ventures would build the county a new criminal justice center with a 2,280-bed jail, criminal courthouse, prosecutor offices, sheriff administrative offices and a juvenile detention facility at an approximate cost of $520.3 million.
The county would be responsible for $380 million plus the cost of acquiring the land and Rock would cover any cost overruns. The $380 million would be funded through a combination of unused proceeds from a $200 million direct-pay, taxable recovery zone economic development bonds sold in 2010 by the Wayne County Building Authority and the issuance of about $200 million of new bonds, according to Evans. The bonds would be issued after definitive agreement is approved.
The plan still hinges on an IRS decision on whether the county can use jail bond proceeds from the original borrowing to build on the alternative site.
Wayne County Executive Warren Evans is scheduled to deliver his State of the County speech on March 13. Evans said in his address last year the unfinished jail construction project represented one of the bigger challenges the county must tackle to remain fiscally healthy. The country has posted three consecutive budget surpluses, and increased the county’s pension funding level to 54% funded from 45%.
The county exited an emergency consent agreement with the state in 2016.