Wayne Co. focuses on deal with Gilbert for jail site

Nicquel Terry
The Detroit News

Detroit — Dan Gilbert might score a soccer stadium after all.

Gilbert’s vision to reshape one of the downtown’s key entrances by ushering in a $1 billion mixed-use development anchored by a 23,000-seat MLS soccer stadium at the site of the county’s unfinished jail in Greektown is closer to reality.

Wayne County Executive Warren Evans announced Monday that his office was attempting to reach an agreement on a $520.3 million offer from the billionaire businessman for the creation of a new criminal justice complex to be built elsewhere in the city, paving the way for Gilbert’s blockbuster Greektown development.

Gilbert’s proposal has been in competition with Chicago-based Walsh Construction’s plans to finish the jail site at its current location on Gratiot.

Evans said Monday that Gilbert’s Rock Ventures offered a better deal than Walsh but he would not make a formal recommendation to county commissioners until his administration finalizes a contract with Rock Ventures.

“While both proposals remain options, I’ve directed my team to dedicate their time and resources toward attempting to reach a contract with Rock Ventures,” Evans said in a release. “The Rock Ventures proposal has more upside, less risk and a smaller financial gap than Walsh Construction’s proposal.”

The possibility of a downtown soccer stadium featuring an MLS franchise comes amid soccer fever caught by fans who’ve enjoyed the success of Detroit City FC and a recent match at Comerica Park featuring European power clubs Paris Saint-Germain and AS Roma.

To make room for a soccer development in Greektown, Rock Ventures has proposed building a criminal justice complex near I-75 and Warren for the county with a 2,280-bed jail that would cost at least $520.3 million. The county would be on the hook for $380 million, plus the cost of acquiring the land from the city. Rock Ventures vowed to cover the risk for all cost overruns.

In exchange for the complex, Rock Ventures wants to use the unfinished jail site in Greektown for the mixed-use development, soccer stadium and three high-rise buildings. That development could have more than a $2.4 billion economic impact, the company said.

“On behalf of Rock Ventures, I’d like to thank Warren Evans and his dedicated team for their hard work throughout this process and their confidence in us moving forward together,” Rock Ventures Principal Matt Cullen said in a statement Monday.

“We are more confident than ever that this project represents a great opportunity for Wayne County, its residents and our entire community. We remain committed to working together to make the vision of a new criminal justice complex and mixed-use gateway project become reality.”

Rock Ventures anticipates the criminal justice complex would be completed by Nov. 5, 2020.

Alternatively, Walsh pitched a plan to complete the existing jail site with two options: one had 1,608 beds at $269 million and the other called for 2,200 beds at $317.6 million.

Peter Doherty, a spokesman for Walsh, declined to comment when reached by email Monday.

Rock Ventures originally proposed a 1,600-bed jail earlier this year with a criminal justice complex on East Forest.

Evans said expanded jail options make the most sense because the county can close its Division I, II and III jails resulting in long-term savings. A study concluded that the county would save $7.2 million a year by closing the Division III jail, according to the Evans’ office.

“Based on where we are today and looking to the future, it makes sense for the county to spend the additional money for the expanded jail,” Evans said in the release. “The county’s improved finances and credit rating have given us the option of financing the larger project in order to achieve this long-term benefit.”

While Detroit is not guaranteed an MLS franchise, Gilbert has joined forces with billionaire Pistons owner Tom Gores to make the city’s case for one. Gores-owned Platinum Equity and Gilbert-owned Rock Ventures want a franchise together.

A dozen cities are trying to woo the MLS as it weighs expansion possibilities. The professional soccer league plans to add four teams — two are expected to be confirmed by the end of this year, according to the MLS.

Greektown merchants said Monday they were excited about the prospect of getting the new development and a soccer stadium in the area.

Santorini Estiatorio restaurant manager Spilios Zafiropoulos said the unfinished jail has been an “eyesore” to downtown Detroit. The jail site, he said, needs to be distanced from the city’s booming downtown.

“Whether Dan Gilbert wants to do something with it or somebody else wants to do something with it, it’s prime real estate,” Zafiropoulos said. “If anything, it’s going to help the downtown area.”

New Parthenon restaurant manager Louie Golematis said downtown restaurants will thrive if Gilbert builds a soccer stadium and mixed-use high rises.

Golematis noted that Gilbert’s plan is better because it benefits two separate parts of the city.

“It makes the city grow in two different areas because you’re improving the city here in this area (Greektown) and you’re removing a prison that, in my opinion, shouldn’t be in the middle of the downtown,” Golematis said. “But you’re also taking (the jail) to an area down the street that’s going to help that area.”

Evans’ administration will spend the coming weeks negotiating a deal with Rock Ventures. If the two parties can’t reach an agreement, the county says it has 120 days from the June 28 proposal deadline to commence talks with Walsh on completing the existing jail site on Gratiot.

Mayor Mike Duggan on Monday commended Evans.

“I completely support the way Warren Evans is handling this,” Duggan told The News. “I’m confident we’ll work out the land transfer to allow the county to build on that site if that’s their final decision.”

Wayne County Commission Chair Gary Woronchak said Monday there are “sound reasons” for moving forward with the Rock Ventures proposal but county taxpayers remain his top priority.

“The determining factor for me is still whatever direction meets the county’s jail needs at the best value for taxpayers,” Woronchak said in a statement. “While I am hopeful that an agreement can be reached with Rock, I remain prepared to return to the plan to complete the partially built jail on Gratiot at I-375 if that turns out to be in the best interest of the county and its residents.”

Rock Ventures’ criminal justice complex would have a jail, courthouse, prosecutor offices, sheriff administrative offices and a juvenile detention facility at the location near I-75. Its proposed location currently houses administrative offices and bus maintenance facilities for the Detroit Department of Transportation.

Evans’ office is working to reach an agreement with the city of Detroit on purchasing the land.

Wayne County is also waiting for IRS approval to use the existing jail bonds on the Rock Ventures’ proposed site instead of the Gratiot property, officials say.

“Over the past few weeks, we’ve made progress with both Rock Ventures and the city of Detroit and we’ll continue those efforts,” Evans said in the release. “Having a new criminal justice center is the better option, but there remain significant obstacles that need to be resolved. We will continue to work tirelessly to address them.”

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.

Thomas Karadimas, owner of The Greek restaurant in Greektown, said having the jail at the entrance of downtown hurts the city’s image.

“I think it’s a terrific idea,” Karadimas said of Gilbert’s proposal. “In another two years, Detroit is going to be one of the best cities in the USA.”

Staff Writer Christine Ferretti contributed.