Joe Guillen

Detroit Free Press

At this point, it’s practically impossible to know exactly how much Wayne County would end up paying Dan Gilbert's Rock Ventures under his proposal to build a new criminal justice complex, because the cost depends on an undetermined amount of money the county would save with newer facilities.

The unknown variable is called an “operational savings credit,” which would be added to the $300 million the county would pay Gilbert's Rock Ventures to build a new jail and courts complex near I-75 and East Forest Avenue instead of on the site of the stalled jail project at Gratiot and St. Antoine.

The savings credit is to be calculated based on the difference between the estimated costs to operate and maintain the Gilbert-built criminal justice complex and the estimated cost to operate the county's jails and courts if the Gratiot site is finished and the Frank Murphy Hall of Justice is updated.

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A new criminal justice center at East Forest Avenue "through state-of-the-art engineering, technology advancements, new construction, consolidation of operations and otherwise, will generate significant, clear and demonstrable cost savings for the county," Rock Ventures wrote in its proposal to the county.

The credit's inclusion in the deal, however, is far from certain as county officials review Gilbert's offer in anticipation of negotiations over the next few months.

"It's very difficult to determine how it would be calculated now based on the information we have from the proposal," Wayne County Executive Warren Evans' spokesman, Jim Martinez, said in an e-mail. "We will review any proposal Rock has in regard to this, but it needs to be thoroughly vetted."

Evans is scheduled to give an update on the county's review of Gilbert's proposal on Monday morning.

Uncertainty surrounding the failed jail project complicates matters somewhat. Part of the savings at Rock's proposed complex would be measured against projected operational costs at the Gratiot site, which have been disputed over the years as county officials investigated how the project's costs ballooned.

The size of the savings credit is one of the major question marks surrounding Gilbert's proposal to take the disastrous jail project off the county's hands.

"It was an unexpected curveball and uncomfortably vague" is how Wayne County Commission Chairman Gary Woronchak described the savings credit portion under Gilbert's proposal.

"We have no explanation of what that is or any estimates," Woronchak said in a statement to the Free Press. "It also would increase the county's costs beyond the $300 million more that CEO Evans said was our limit."

Rock Ventures has offered to design and build a new 1,600-bed jail, criminal courthouse and juvenile detention facility at an 8-acre site near I-75 and East Forest Avenue. In exchange, the county would give Rock several of its jail and court properties downtown, including the existing juvenile detention center, the Frank Murphy Hall of Justice and property where the unfinished jail sits. Gilbert wants to redevelop the Gratiot site, possibly with a new Major League Soccer stadium. Gilbert for years has sought to redevelop the unfinished jail site near his Greektown Casino-Hotel.

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According to Rock's proposal, the new criminal justice complex at East Forest Avenue would be worth $420 million, leaving a $120-million shortfall from the county's $300-million payment, which is based on the estimated cost to finish the jail at the Gratiot site and renovate Frank Murphy.

Matt Cullen, principal of Rock Ventures, declined to give a range for the county's potential savings credit payment. But he said “it would be much smaller" than $120 million.

Rock Ventures' proposal does not say whether the credit would be paid in a lump sum or another manner. The credit is included in the proposal to even out the costs for both sites, Cullen said.

"We left open the formula because at the end of the day there’s a lot of work that needs to be done over the next 90 days to get everyone comfortable with the facts,” Cullen said in an interview.

Part of that work will be analyzing projected operational costs at the Gratiot site if Gilbert's offer is rejected and the jail is finished.

When the jail project was approved in 2011, county officials touted annual savings of between $20 million and $30 million. But that was based on savings derived from a newer, more sophisticated jail at the Gratiot site versus the existing jails.

But a county audit written in 2013 concluded "we were not able to examine detailed documentation to support how the savings, projected to range between $20 million-$30 million annually, would be achieved."

Former Wayne County Executive Robert Ficano's office objected to the audit finding because it claimed auditors were given documents about operational savings from design firm AECOM Services of Michigan. In a written response to Ficano's office, the county's legislative auditor general agreed to amend the finding. But the audit was never amended because it was turned over to the county prosecutor for possible criminal behavior and sealed.

Last summer, a new cost analysis of the stalled jail project was prepared for the county based on AECOM’s design. The analysis estimated $3 million to $10 million in savings annually, again, because of operational improvements between the county's existing facilities compared with a new Gratiot jail, depending on staffing levels. The cost to operate the county's existing jail facilities (Division 1 and 2) was $70.5 million in fiscal year 2015.

Estimated operational costs at the Gratiot site also are dependent on a forthcoming proposal from Walsh Construction, the only qualified bidder to agree to take the job of finishing the jail.

Martinez, Evans' spokesman, said Walsh's proposal is expected by summer.

Contact Joe Guillen: 313-222-6678, jguillen@freepress.com or on Twitter @joeguillen.