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http://www.freep.com/story/news/local/michigan/detroit/2017/06/29/wayne-county-jail-project/438544001/

Wayne County receives final jail bids; Dan Gilbert's tops $520M
Katrease Stafford , Detroit Free Press Published 9:46 a.m. ET June 29, 2017 | Updated 9:43 p.m. ET June 29, 2017
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Expert weighs in on Wayne County fail jail
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Ashraf Ragheb, associate professor of engineering at Lawrence Tech in Southfield, offers his take on Wayne County's unfinished jail in Detroit. Eric D. Lawrence Detroit Free Press

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(Photo: Romain Blanquart, Detroit Free Press)
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Wayne County is in the final phases of weighing two proposals — one from Walsh Construction to complete the unfinished jail on Gratiot and a $520.3 million offer from billionaire developer Dan Gilbert's Rock Ventures to build a new county criminal justice complex on land currently owned by the City of Detroit, adjacent to the original proposed East Forest location.

Both developers submitted their final proposals Wednesday, according to Jim Martinez, a spokesman for Wayne County Executive Warren Evans.

A final decision is expected in late July and would then go before the Wayne County Board of Commissioners and Wayne County Building Authority for approval. According to a news release from the county, whichever proposal is selected will require "extensive negotiations."

“The goal was to provide the county with alternative solutions to the jail project and we’ve done that. We’re finally able to fully evaluate the proposals and pursue what’s best for Wayne County,” Evans said in a statement. “We’ll work diligently to move this forward as quickly as we can. Just like everyone else in Wayne County, I’m tired of talk. I want the jail project resolved.”

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

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

Gilbert wants the land where the stalled jail project sits. A group led by Gilbert and Pistons owner Tom Gores wants to build a 23,000-seat stadium on the Gratiot jail site to host a Major League Soccer team. The investment has been estimated at $1 billion. The application for an expansion team filed in January listed only the jail site as a location.

In exchange, the Gilbert group in February offered to build the county a criminal justice complex on East Forest Avenue, just east of I-75 in Detroit.

But the amended proposal Gilbert submitted Wednesday moves the proposed complex to a nearly 13-acre site owned by the City of Detroit, bounded by the I-75 Service Drive, East Warren, East Ferry, Russell and Frederick. The site is currently home to a Detroit Department of Transportation maintenance facility and administrative offices.

DDOT Director Dan Dirks said in a statement to the Free Press that the department is open to considering any purchase proposal for the property, assuming it would reflect a fair market value.

"Any proposal also would have to consider the unique replacement needs of a facility like this one, which must be able to accommodate a large number of city buses, many of which are 60-foot long articulated vehicles," Dirks said. "However, our first consideration for any proposal is that it not negatively affect taxpayers or DDOT customers."


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Gilbert also outlined the timeline for the project, saying the company expects the county to reach an agreement with the city for land control of the Warren/Detroit Department of Transportation site by Sept. 15. Construction would begin March 6, 2018, and be completed Nov. 5, 2020.

According to the new proposal, Rock’s current plans for the redevelopment of the Gratiot site include office and commercial space, a hotel, residential space, parking and potentially a Major League Soccer stadium in conjunction with Platinum Equity.

A rendering of the northeast view of the proposed new
A rendering of the northeast view of the proposed new Wayne County criminal justice complex on land currently owned by the City of Detroit at I-75 and E. Forest. The proposal is from from billionaire developer Dan Gilbert's Rock Ventures. (Photo: HO+K)
"Rock’s development would complement the current development trends of Downtown Detroit towards a new urban neighborhood and the region’s center for sports and entertainment," Gilbert wrote Wednesday in a letter to Evans. "The economic impact study prepared by the University of Michigan Center for Sport and Policy projects that this redevelopment of the Gratiot Avenue site would produce in excess of $2 billion in economic impact."

Rock Ventures also wants the land where the Frank Murphy Hall of Justice sits, the current county jail and a juvenile facility.

Rock Ventures’ proposal offers to build the county a new criminal justice center with a 2,280-bed jail, criminal courthouse, prosecutors offices, sheriff administrative offices and a juvenile detention facility for about $520.3 million. According to the news release, the county would be responsible for $380 million plus the cost of acquiring the land, and Rock would be responsible for cost overruns.

“The logic has always been clear to me. It’s not about soccer and it’s not about politics. It’s about a county, with very real fiscal limitations, financing a desperately needed jail which has already cost taxpayers millions,” Evans said. “This decision is solely about what’s best for Wayne County.”

Gilbert wrote that since submitting the original proposal, his staff has spent a considerable amount of time to "significantly amplify and expand on the scope" of the complex.

Plans change

Gilbert and Rock Ventures has purchased dozens of buildings downtown over the years and have renovated and repurposed many. They have had their eye on the Gratiot site for at least four years, ever since construction on the jail was halted in June 2013 because of a projected cost overrun of about $90 million. The site is just a few streets over from Gilbert's Greektown Casino.

A proposal in 2013 offered the county $50 million for the 15.5 acres of land that includes the failed jail site, the Frank Murphy Hall of Justice, Wayne County Jail Division 1 and 2 on Clinton Street and the Wayne County Juvenile Detention Facility at St. Antoine and Macomb. Part of the money — about $30 million — would come after the county vacates the court, jails and juvenile detention facility.The county would relocate its facilities to the Mound Road Correctional facility near 7 Mile Road.

The thinking at that time was to build a $500-million high-rise and brownstone-inspired residential complex, along with walk-up retail and a hotel. And a study in 2013 commissioned by Rock Ventures suggested the move would have an economic impact on the county of more than $1 billion and create 6,000 jobs downtown and at the Mound Road location.

But then talk of the Detroit Pistons returning to Detroit began to swirl, and the idea of bringing Major League Soccer spurred interest in making downtown Detroit a sports and entertainment mecca.

So the proposal in February called for building a complex worth $420 million, in exchange for $300 million from the county and the transfer of the Gratiot Avenue property. That would have cleared the way for a massive entertainment district, including a soccer stadium.

"Our participation in this process has made us even more enthused about the community benefits the project will provide, and we look forward to the successful relocation of the Gratiot Avenue facilities," Gilbert wrote Wednesday.

According to the letter, Rock Ventures would work with the design firm HOK and Barton Malow, or another architect or contractor selected by the company and approved by the county, to design the criminal justice center.

Rock Ventures would be responsible for all costs associated with the design fees and costs for the center, testing, permits and related costs in connection with the construction of the Criminal Justice Center.

In addition to paying $380 million, the county would have to:

Transfer ownership of the Gratiot Avenue site and the East Forest facilities owned by the county to Rock Ventures.
Enter into an agreement with Rock that would allow the company to operate about 1,500 surface-level parking spaces located on or near the Warren/DDOT site. Rock would be allowed to collect parking revenues for 20 years, according to Gilbert's letter, initially at a rate of $110 per month, per space, for county designated employees.
"implement measures to support and encourage" employee use of such parking spaces.
Walsh's proposal

Walsh's submission comes a month after the county agreed to grant Walsh a six-week extension on coming up with a plan.

, and issued an addendum to the RFP which had a previous deadline of May 17.

Walsh asked for more time to re-evaluate programming, layout and structures outlined in the request for proposals for the jail facility to create a proposal that meets the county’s needs at the site.

Dan Gilbert's Rock Ventures proposes to build a newBuy Photo
Dan Gilbert's Rock Ventures proposes to build a new county criminal justice complex on a nearly 13-acre site owned by the City of Detroit, bounded by the I-75 Service Drive, E. Warren Ave., E. Ferry, Russell and Frederick. The site is currently home to a Detroit Department of Transportation maintenance facility and administrative offices. Photographed on Wednesday, June 28, 2017. (Photo: Romain Blanquart, Detroit Free Press)
And in April, Walsh asked for a two-week extension to continue to get bids from subcontractors and to ensure their proposal will include t

That extra time allowed Walsh to come up with two options at Gratiot, differing in bed capacity.

Those options were at the request of the county and would offer designs that include approximately 1,608 and 2,200 beds.

Walsh representatives said in a Wednesday letter that the company has met weekly with county officials about the project, which has been named the Wayne County Consolidated Jail.

Rock Ventures said initially it was prepared to build the county a new, high-tech criminal justice complex worth an estimated $420 million, in exchange for $300 million from the county, the transfer of the Gratiot Avenue property and a credit to be paid to the company for the savings a new consolidated criminal justice complex would provide.

Rock’s initial proposal was to build a 1,600 bed jail and criminal complex if the county paid the first $300 million and an undetermined amount for operational savings. Rock initially estimated the cost of the project at $420 million and promised to cover any cost overruns, according to the news release.

Rock’s original proposal also included an option to increase the jail to 2,000 beds, but required the county spend an additional $43 million above the $300 million.

Evans said at the time that although he wants to "move forward as badly as anyone," the county wants to make sure it takes the steps necessary to get the project right.

According to the county, an Internal Revenue Service decision related to the appropriate use of jail bond proceeds on an alternative site to Gratiot remains pending.

The county said in the statement that without a ruling in its favor, no agreement between the county and Rock to "construct a Criminal Justice Center on an alternative site is possible."

But the county said its optimistic that the IRS decision will not result in an "insurmountable obstacle" to the project.

“This is an extraordinarily difficult project and not taking the time needed to get a quality proposal doesn’t serve anyone’s interests," Evans previously said.

Contact Katrease Stafford: [e-mail] or 313-223-4759.

The latest proposals involving Wayne County's failed jail site:

Walsh Construction: Walsh would complete the unfinished jail on Gratiot at the edge of downtown Detroit.

Walsh has offered the county two options: finishing the jail with 1,608 beds for $269 million, or making it 2,200 beds for $317.6 million.

Rock Ventures: Wayne County would give the unfinished jail site on Gratiot to Dan Gilbert's Rock Ventures. Gilbert wants the site as a potential spot for a Major League Soccer stadium that would anchor a future commercial, residential and hotel development. This project could total $1 billion in investment and be done in a partnership between Gilbert and Detroit Pistons owner Tom Gores.

In return for getting the unfinished jail site, Rock Ventures would then build for the county an all-new $520 million jail and criminal justice complex on a 13-acre property further north, east of I-75 and across from Midtown. This land is currently owned by the City of Detroit, and has on it a Detroit Department of Transportation maintenance facility and offices.

The county would only be responsible for $380 million of the new justice complex's $520.3 million price tag, and Rock Ventures would be responsible for any cost overruns. However, the county would need to buy the land from the City of Detroit for whatever price the city wants to sell for.

Rock Ventures would build a justice complex with a 2,280-bed adult jail, 160-bed juvenile jail, criminal courthouse, prosecutor offices and sheriff administrative offices.

As part of the deal, Rock Ventures would also get ownership of land on East Forest Avenue, across from the proposed justice complex Rock wants to build. This East Forest land is the site where Rock Ventures initially proposed building the justice complex.

Additionally, Rock Ventures wants to operate a 1,500-space surface parking lot near the future justice complex. It would collect parking revenues there from county employees for a period of 20 years, initially at a rate of $110 per month. This setup could be worth several million dollars.