Detroit City Council delays vote on land swap needed to build $520M jail

Plans to build a $520.3-million criminal justice complex north of downtown suffered a one-two punch Tuesday when a lawsuit was filed to halt a needed land swap and the Detroit City Council delayed voting on the deal after raising a number of concerns.

The proposed land swap between the city and Wayne County would allow billionaire Dan Gilbert's Rock Ventures to build the complex but the proposal has drawn ire from residents living near the site east of I-75 at Warren Avenue. It would replace the so-called failed jail site on Gratiot Avenue next to the existing county jail downtown.

And although council voted to delay the vote until next Tuesday, county officials cautioned that if the deal is delayed into next year, it could cost millions.

"The timing is significant to us," said Zenna Elhasan, director of corporation counsel for Wayne County. "...A lot of those price quotes that were provided to us are based on a construction schedule. ... We're talking about millions that would increase the budget."

But residents have said they're concerned about the impact a jail there would have on their neighborhood and frustrated by what they believe has been a lack of public engagement. In recent weeks, community members have mobilized in an united effort to prevent the deal from moving forward, by vocalizing their displeasure and circulating petitions.

On Tuesday, one of the leaders of the community effort filed a lawsuit asking a judge to intervene and halt the deal. Nicholas Miller, who lives within three blocks of the proposed site, wants an emergency injunction to stop the swap from going through.

Miller filed the lawsuit in Wayne County Circuit Court against the city, Mayor Mike Duggan, the City Council and Council President Brenda Jones.

"I am alleging that the city should not be allowed to circumvent their own zoning ordinance and this is not a government purpose for the City of Detroit," Miller told the Free Press shortly after filing the lawsuit.

In the complaint obtained by the Free Press, Miller alleges that "multiple city officials have recognized that the county will not have to submit to city ordinances regarding the land use, traffic impact studies, site plan review or historic preservation that would otherwise be required" in similar projects.

It's not clear what impact the lawsuit could have on the deal. A court date has yet to be set.

Khalil Rahal, Wayne County's economic development director, told the Free Press he wasn't aware of the lawsuit until told of it by a reporter.

Councilwoman Mary Sheffield said she was aware of the lawsuit but she believes that because the county is leading the deal, it can't be forced to abide by any of the city's zoning regulations.

"We've received legal opinions about that already so I'm not sure how far he will get but I appreciate his efforts," Sheffield said. "I think he has good intentions but again, it's about securing some type of process so that the community's concerns are heard."

A handful of council members told county officials that they felt they didn't have enough information to vote on the deal.

"I don't feel like as of today you guys have done enough community engagement," said Councilwoman Janee' Ayers. "...Nicholas (Miller), he's been talking about things we don't even have in front of us. ...There are some things I don't have the answer to. Conceptually, I'm with it, but procedurally I can't say I'm 100% behind it because I don't feel like you've given us enough."

Related:

Detroit-county land swap deal still alive despite scrapped plan for soccer stadium downtown

Ford family joins Detroit's MLS bid, offers Ford Field as venue

Rahal told the City Council on Tuesday that the county is aware of the concerns raised by residents and some council members and said it is working hard to mitigate those issues.

"Lafayette Park stares right at the failed jail site (across I-375) and there are no higher property values in the city of Detroit than at Lafayette Park," Rahal said. "With that being said, we are going to work with the city. ... We're going to work on zoning issues ... We're going to do everything we can to encourage the flow of traffic back into that area. We're trying our best."

Rahal said after the meeting that the county is trying to do what's best for its 1.7 million residents.

"We need a new jail," Rahal said. "The jail conditions we have right now are not the most ideal. We've only got a few options that our predecessor put in our lap that we inherited."

Rahal said council delaying the vote until next week is OK, but beyond that, it will continue to drive up the costs.

Ground was previously broken at the Gratiot site under the leadership of former Wayne County Executive Robert Ficano in September 2011. Work was halted at the site in June 2013 when it was revealed that cost overruns were pushing the project $91 million over the $300-million budget. The idled site is costing taxpayers about $1.2 million a month in bond payments, storage and security.

"I think though the longer that we wait to come to a resolution, the more expensive it's going to get for taxpayers," Rahal said. "...Obviously one of the options is to finish it up at the site."

The proposed deal would give the city the former American Motors headquarters site on Plymouth Road in exchange for 11 acres of city-owned land needed to build the jail complex. The deal still needs to win approval from the Wayne County Commission, which has yet to discuss it, according to a spokesperson.

According to the agreement, Detroit has the option to forgo swapping the land and instead opt to receive the fair market value of the city property from Wayne County, estimated to be $757,000. The city has until Nov. 1, 2018 to make that selection.

The city has said it plans to market the vacant 1.4-million-square-foot American Motors headquarters on Plymouth Road on Detroit's west side for redevelopment.

The American Motors site is owned by the Wayne County Land Bank, which would need to approve the exchange of that site.

Wayne County would then give the existing, unfinished jail site on Gratiot in downtown Detroit to Gilbert's Rock Ventures in exchange for building the new jail complex.

Earlier this month, Gilbert scrapped plans to use the Gratiot site as a potential spot for a Major League Soccer stadium. But Rock Ventures Principal Matt Cullen said at the time that the company remains committed to building a mixed-use development on the Gratiot site, adding that it will become an "economic driver" for the community.

An offer from Walsh Construction to complete the unfinished jail on Gratiot remains on the table, if the deal with Rock Ventures can't be worked out. The county has until Dec. 1. to have a definitive agreement for the Wayne County Commission to consider.

But officials have said the Walsh proposal puts the county at risk for cost overruns, unlike the Rock bid.

Walsh’s proposal includes two jail options at Gratiot: one with nearly 1,608 beds at $269 million and another with 2,200 beds costing $317.6 million.

The county has said it needs at least 2,000 beds.

Contact Katrease Stafford: kstafford@freepress.com or 313-223-4759.