Detroit — Dan Gilbert has reached a major milestone in his quest to bring a soccer stadium to Greektown and build the county a new jail.
Wayne County officials announced Thursday that they struck a tentative deal for a land swap with Detroit that gives the county a portion of a Detroit Department of Transportation property near Interstate 75 and Warren in exchange for the shuttered American Motors Corp. headquarters on Plymouth near Schaefer on the city’s west side.
“This agreement gets us one step closer to a deal with Rock Ventures,” said Wayne County Executive Warren Evans in a statement. “Acquiring this land was one of the significant hurdles to Rock’s proposed criminal justice complex. We worked out a tentative deal that makes a lot of sense for the city and county, and we look forward to finalizing the agreement.”
Gilbert is trying to convince the county to green-light a $520.3 million proposal that would build the criminal justice complex, which includes a jail, on the DDOT property under the condition that Wayne County acquires the land from the city.
In exchange for the complex, Gilbert’s Rock Ventures wants to use the unfinished jail site in Greektown for a $1 billion mixed-use development anchored by an Major League Soccer stadium and high-rise buildings. That development could have more than a $2.4 billion economic impact, the company has said.
The Detroit City Council, Wayne County Commission and Wayne County Land Bank Board must approve the land swap, officials say.
Mayor Mike Duggan said at an unrelated news conference Thursday that he planned to recommend this week the deal to city council.
Duggan said the AMC property is a “serious source of blight in that neighborhood” and that he wants to target it for redevelopment “as one of our highest priorities.” He declined to specify future uses for the building.
“We need to address it,” he said. “We do think we have good plans to address it, we have the resources to address it and this is going to work out, I think, for the both of us. The county got their highest priority land, we got our highest priority land and neither of us has to spend any money.”
Rock Ventures did not respond immediately to a request for comment.
The deal grants Wayne County an 11-acre piece of the DDOT property located behind the bus terminal, so operations will not be disrupted, according to the county.
The DDOT site houses administrative offices and bus maintenance facilities.
Duggan said he supports using the site for a criminal justice complex. If the plan gets approved, Duggan said the city will meet with neighbors to assure them that the complex is an asset to the area.
“I do think Warren and I-75 is an ideal place for a criminal justice center,” Duggan said. “I think you’ll see restaurants and other development over in that area for jurors and witnesses and lawyers and the like.”
Evans said in late July that he was focusing on Gilbert’s offer, which was competing with Chicago-based Walsh Construction’s proposal to finish the jail at its current location on Gratiot.
Last week, Wayne County extended a $500,000 stipend agreement with Walsh to keep the firm’s proposal on the table as it looks to reach an agreement with Gilbert.
Local development experts say there is every indication that the county is going to ink a deal with Gilbert soon. However, one Wayne State University professor suspects negotiations are being prolonged to ensure a fair financial agreement.
“As long as county taxpayers aren’t being burdened with additional taxes or debt beyond what it would cost to complete the jail, it seems to me that everybody wins,” said John Mogk, a law professor at Wayne State who previously consulted the city on development deals.
Rock Ventures’ plan calls for a criminal justice complex with a 2,280-bed jail, courthouse, prosecutor offices, sheriff administrative offices and a juvenile detention facility at a cost of $520.3 million. The county would be on the hook for $380 million. Rock Ventures vowed to cover the risk for all cost overruns.
Wayne County still is waiting for Internal Revenue Service approval to use the existing jail bonds on the Rock Ventures’ proposed site instead of the Gratiot property, officials say.
The former AMC headquarters is a 1.4 million-square-foot facility that has been owned by the county’s Land Bank. Until late 2009, Chrysler Group LLC owned the building where 1,000 employees designed Jeep Grand Cherokees and Dodge Durangos. In 2010, the building was sold during the company’s bankruptcy.
The county included the deteriorating building in its 2015 tax foreclosure sale but was unsuccessful after the winning auction bidder didn’t pay a $500 bid.
Construction on the original $220 million county jail project in Greektown began in 2011, under then-Wayne County Executive Bob Ficano. That 2,000-bed project across the street from the Frank Murphy Hall of Justice was later halted in June 2013 after $100 million in overruns and charges of corruption.
About $151 million was spent in construction, acquisition and design of the jail, with much of the work done underground, according to officials.
The half-finished jail has sat unused at a cost of $1.3 million a month, county officials estimate.
Staff Writer Christine Ferretti contributed.