Finley: Wayne Co. crisis gives gov clout for Mound jail

Nolan Finley
The Detroit News

The Snyder administration hopes to use a consent agreement to fix Wayne County’s finances to also push the county to move all of its court and corrections operations — including the unfinished jail — to an abandoned state prison on Detroit’s east side.

Gov. Rick Snyder has long advocated consolidating courts and jails at the Mound Road site, freeing up valuable land downtown for commercial redevelopment. The administration pegs the cost of refurbishing the prison to accommodate the downtown courthouses and three jails at about $400 million. That’s about the same amount required to finish the jail and replace or upgrade the Frank Murphy Hall of Justice and the juvenile jail facility, both of which are in disrepair.

The county has balked at the move, contending the Mound Road site will be less convenient for the public.

Sources in Lansing and Detroit say the governor would like to see a solution to the jail problem as part of the consent agreement. But an official in the governor’s office said they would not condition the deal on the Mount Road proposal.

Wayne County started the jail under former County Executive Robert Ficano. It was supposed to cost $300 million to build and outfit. But after spending $150 million, the jail had barely risen from its foundation, and was already $100 million over budget. Construction was suspended in June 2013 when it became clear the county would not have the money to finish the project.

Less than $50 million is left from the initial $200 million bond issue, and debt service, maintenance and security is costing the county $1.2 million a month, contributing to its $52 million structural deficit.

County Executive Warren Evans asked the governor to review the county’s finances under the state’s emergency financial manager law with the goal of getting a consent agreement that would help him force contract concessions from public employee unions. Snyder agreed on Wednesday.

The governor, according to the sources, smells an opportunity to prod Wayne County to move on the jail. And it would seem the state has all the leverage.

For one thing, the county doesn’t have another viable option for resolving the jail issue. Evans has said he can’t deal with the jail until the county’s finances are in order. He’s also expressed doubt the county will ever find the money to finish the project.

Wayne County’s credit rating makes it unlikely it can raise another $250 million or so to complete just the jail construction, without taking into account the additional money that will be needed to upgrade the other facilities that are in poor shape.

To get an interest rate anywhere near affordable for the county, the state would have to back the bond issue — something the governor is reluctant to consider if the money is poured into the existing jail site.

But he might be more amenable to help with the financing of the Mound Road refurbishing, the sources say.

The governor’s staff has also been talking with Quicken Loans’ Dan Gilbert, who made an initial offer to buy the unfinished jail property, which is near his Greektown Casino.

The proposal now is to sell the jail and other criminal justice facilities in the area to Gilbert, along with the county-owned Guardian Building and its parking deck for roughly $150 million.

That money would go into Mound Road, greatly reducing the amount the county would have to borrow.

County operations now housed in the Guardian Building downtown would be moved to the state-owned former General Motors headquarters building in New Center, which houses state employees and has plenty of room.

This seems the best, and perhaps the only, way for Wayne County to get out from under the jail project disaster. It has a jail it can’t afford to finish, and other buildings that will soon need very expensive repairs. Its credit rating is junk, so it can’t raise money for the construction projects.

And it needs the state’s help to reach a budget-balancing deal with its unions.

Bowing to the governor’s desire to fill the Mound Road prison with Wayne County’s criminal justice operations is the likely price tag.

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