Lansing — Officials in Michigan Gov. Gretchen Whitmer’s administration privately discussed closing the Caro Center psychiatric hospital and scrapping a $115 million rebuild project before publicly announcing it would hire a consultant firm to assess options.

Critics contend internal emails disclosed by the state health department show the ongoing review — projected to cost the state $277,000 — is a charade to justify a decision that’s already been made. The potential closure has frustrated locals fearful of losing Tuscola County’s second largest employer.

But the state says the Myers and Stauffer LC consulting company was not aware of internal discussions and was hired to make independent and fact-based recommendations. Emails also show the decision to pause the project was spurred by a suggestion from the State Budget Office under former Gov. Rick Snyder, the Ann Arbor Republican who had helped break ground on the construction site two months earlier.

“A small window of opportunity exists in January 2019 to halt construction at this location on either a temporary or permanent basis,” the budget office said in a December transition briefing that alerted the incoming Whitmer administration to staffing concerns at the existing Caro Center.

Department of Health and Human Services Director Robert Gordon, whose hire was announced Jan. 10, “believes that closing Caro entirely is the correct path forward from a policy perspective,” Whitmer Deputy Cabinet Secretary Andrea Taverna said in a Jan. 15 email that Gordon later added to.

“We don’t want to build another facility there,” Gordon wrote in a separate Jan. 30 email after personally visiting the aging Tuscola County’s hospital, which was built in 1913.

Whitmer health policy director Meghan Groen then wrote in a Feb. 5 email to Gordon and other state officials: “It seemed very evident from our meeting and your visit that building another facility in Caro is not a viable option.”

Sen. Kevin Daley, R-Lum, whose district includes Caro Center, said he's “very disappointed that the director, a new guy coming into our state, would come in here and make statements like that before he’s had a chance to investigate it in a proper way.”

The emails were first obtained by WJRT-TV under a Freedom of Information Act request. The Detroit News, which had already asked for related documents, submitted a second request for the full health department disclosure.

The fate of the Caro psychiatric hospital has local residents on edge and has fueled claims the Whitmer administration is showing little regard for rural communities that voted for her GOP opponent in the fall election. It is a charge the first-term Democrat has denied.

Whitmer said Wednesday she believes the Snyder administration was “suffering from the same concerns” about Caro, including the Thumb region location that makes family visits and staffing recruitment difficult.

“I believe I owe it to everyone in our state, including the patients and the employees, to make sure that this is the right, best investment we can make in terms of addressing this important medical need across Michigan,” the governor told The News.

Budget Office sounds alarm

The Senate Budget Office sounded alarm bells earlier in December as the Snyder administration requested legislative approval for $6.9 million in supplemental state spending to help address “several, seemingly intractable problems in bringing clinical staff” to Caro. They included the inability to lure a psychiatrist to the facility “in part due to its remote, rural location,” according to the budget briefing.

The spending request, approved by the Legislature, also provided funding to address a “staffing crisis” after the facility was cited for multiple violations by the Michigan Occupational Safety and Health Administration in July. Findings included violent conditions and assaults on workers, with staffing levels as a contributing factor.

“Despite the appropriation of this funding, there is no guarantee that contracting for the necessary staff will be successful in either the short-term or the long-term,” the State Budget Office told the Whitmer administration in the transition briefing.

In some cases, residents had gone months without seeing a psychiatrist, the briefing said, while available staff was forced to work “an unsustainable amount of overtime.”

Caro is also one of four state hospitals for adults, serves up to 150 patients and has about 350 employees. The facility usually has a wait list of about 25 and still uses eight to 10 buildings on the site.

It serves the entire Upper Peninsula, northeast Michigan and the Thumb, stretching as far south as Macomb County. In 2017, 123 of the 149 patients were from a county adjacent to Tuscola County, according to data compiled by the county’s state lawmakers.

As of March, the state did not have a full-time psychiatrist on staff there. The health department in November offered extra pay, free meals and lodging reimbursement for psychiatrists at its other hospitals to assist at Caro, but no one volunteered so the state required temporary assignments.

Former State Budget Office Director John Walsh said there is “no doubt” that concerns about the Caro Center preceded the Whitmer administration, but told The News he did not discuss the option of halting the project with Snyder.

“One thing I carried as a departmental director is, wherever we had the opportunity to give the new administration the opportunity to review and decide on its own, that’s what where I wanted to be,” Walsh said.

Less than a month on the job, Gordon visited the Caro psychiatric hospital. He described it as being “in bad shape,” but told colleagues by email that staff members “are impressively dedicated and resourceful,” vowing to address the challenges they face “regardless of the construction plan.”

In the same email, he said the “leading idea at present” would be for the state to expand the Center for Forensic Psychiatry in Saline and build a smaller new facility “in a better location in Caro.”

Gordon proposed creating a commission to “help us get the right answer, build support for that answer, and perhaps hold off the Legislature from doing anything rash.”

He later told the governor’s office he planned to hire a consultant rather than a commission to review psychiatric facility plans, saying it would be “cheaper, easier to stand up, and easier to stay close to.” But Gordon admitted the approach could produce “less validation in the public eye.”

State officials called dishonest

The emails prompted Rep. Phil Green, a Millington Republican and son of the former state senator who led the push for the Caro project last term, to blast the health department and accuse it of being “out of control.”

“It is not surprising that the decision regarding the Caro Center would have already been made,” Green said in a statement. “What is surprising to me is the amount of dishonesty and conniving that went into making the announcement.”

The state had already spent $3 million on the new Caro project before halting it and bringing in a consulting firm. Green said he had previously told both the health department and budget office he feared their minds had already been made up.

“That they had to connive and come up with this elaborate plan to ‘do another study’ in order to come to the conclusion they have already made is the epitome of dishonesty and fiscally irresponsible,” he said.

But the state has not made any final decisions, and the outside firm leading the review "was not even informed" of the opinion Gordon had expressed in his internal email, said Lynn Sutfin, a spokeswoman for the Department of Health and Human Services.

The state hired Myers and Stauffer to conduct the assessment "because of the complexity of these issues and their expertise in addressing questions of this nature," she said. The firm had an existing contract with the state that is expected to cover the estimated $277,000 cost.

"When the director met with them for a kickoff conversation, he told them we were engaging them in order to get beyond opinions, and to gather the data and evidence in order to recommend the best possible decision for our residents," Sutfin said. "Nothing more and nothing less.”

Gordon was not available for a Monday interview. But since taking office in January and moving from Washington, D.C., he has had numerous conversations about mental health and the Caro Center with state hospital employees, mental health professionals, legislators and residents in need that led to the review, Sutfin added.

“Our priority is to ensure that Michigan residents have as much access as feasible to expert care," she said. "A major hospital construction project should be based on the best possible evidence about how to achieve that goal."

Local lawmakers insist that the Caro rebuild, already authorized by the Legislature, remains the best option for the state moving forward. And Daley said he is "optimistic" the project could still happen.

Questions about location and staffing challenges “were answered during the legislative process,” said Daley, expressing concern for patients expecting expanded care options.

“This is a three-year project to build this hospital, and if we put this project off and try to go to another spot, we’re not servicing those people. This thing is on the road to be built and open in the next two years.”

joosting@detroitnews.com