LeDuff: Yeah, A $300-Million Detroit Project, But Where's the Money?

October 30, 2019, 11:04 PM by  Charlie LeDuff

A conceptual watercolor painting of the $300 million Innovation Center,

Mayor Mike Duggan at Wednesday's event.

The mayor's ribbon-cutting events are as predictable as the swallows returning to Capistrano.

First, Mayor Mike Duggan gets himself into trouble. This time it's the revelation that his staff destroyed emails linking him to a romantic interest who received city money and preferential treatment.

Then, Hizzoner holds an event to change the subject, this time to announce that the failed Wayne County jail site will become a $300-million high-tech center to be run by the University of Michigan.    

“Instead of a thousand prisoners on this site, we're going to have a thousand graduates,” Duggan said at Wednesday's event.

Normally, not much happens after these made-for-TV pronouncements – remember the millions of dollars in private investment for the neighborhoods?

But this time there is reason to believe since Stephen Ross, the mega-developer, has thrown his considerable weight behind the idea. Big Boss Ross knows how to get things done with more than $15 billion in current worldwide development projects. He will be partnering with Dan Gilbert, who owns a hundred downtown buildings and the infamous jail acres he acquired after cutting a baroque development deal with the county.

My Skepticism

Having said that, my skepticism won't escape me. The conceptual watercolor painting of the Innovation Center is the latest in a string of conceptual watercolor paintings that began with the failed jail, then morphed into a neighborhood of townhouses, which then morphed into a a soccer stadium, which then morphed back into a neighborhood of townhouses and office spaces. And now the Innovation Center.

It's a well-tested formula: assemble the press, pack the stage with CEOs and a sour-faced governor, trot out those watercolors and voila! All is forgotten.

But there's one little problem in all this. Where's the $300 million? By the mayor's own admission, they haven't scraped the coin together. Here's an excerpt from page two of the six-page press release:

“Mayor Duggan, County Executive Evans and other project partners will take the next 90-180 days to asses the feasibility of the overall project...”

Classic sock puppet theater.

Stephen Ross and Dan Gilbert

Also, not answered in all this is how much in public subsidies will go to the project in a city that was recently bankrupt and struggles mightily with poverty. It's worth noting that the University of Michigan has an endowment of $12 billion.

But never mind all that. Hizzoner announced the development will have classrooms, a conference center, student housing, business incubator laboratories and a hotel. We're going to be just like Boston.

Wait a minute. A hotel? Were we not recently told by Gilbert's development people that the towering skyscraper planned at the former Hudson's site is on hold due to the fact that they cannot find a hotel chain to move in? 

That project, it should be remembered, is financed with hundreds of millions of dollars of public cash and future tax credits.

Where's Gilbert's Grand Structure? 

And Gilbert's supposed tallest skyscraper in the state? It doesn't even appear in the backdrop of the watercolor renderings of the tech center. Weird.

So, I drove over to the skyscraper hole. Nothing much was happening, as is the case most days. What's more, there are no grand architectural plans filed with the city. There are only permits for footings, foundations and the construction of lower level podiums. Who knows? Maybe it'll be a retro gas station and liquor store? There is said to be trouble with the financing since Ross backed out.

When I pulled up to the hole Wednesday morning, I was warmly greeted by a security guard. 

“Mr. LeDuff, I was radioed to be on the lookout for you,” he said. “If you could kindly move on, I'd appreciate it. They said you were on a rampage.”

“No,” I smiled. “Just looking out for your money.”

I had just come from the construction site of the new county jail and courthouse complex located across the street from the trash incinerator. Someone there had radioed in.

That $520 million development deal with the local governments netted Gilbert the failed jail property as well as the county courthouse and three nearby detention facilities. While he will put up some of his own money, Gilbert stands to net tens of millions of dollars unless the deal goes over budget. If it does, then Gilbert is contractually obligated to pick up the tab. 

But don't bet on it. Already, the project is $37 million over budget because some genius forgot to lock in a source for power and water. Gilbert has refused to pay more than $2 million to build the utility plant, and the county has acquiesced.

Council Out of the Loop

A supervisor at that new jail site told me it may take as long as three years before its ready to host a single inmate, prosecutor or judge. Good luck with that, Mr. and Ms. Taxpayer.

And so now we're treated to watercolors of a new tech center with no money attached. 

City Council members tell me they were not informed of the deal, and only learned about it in press reports.

But this is not about them. Or you. This is about Mike Duggan who gets to change the narrative for a few days. And in the meantime, Dan Gilbert continues to recuperate from his stroke

I think Ross put it best: “I wish Dan was able to be with us today.”

Me too. Get well soon, Mayor Gilbert. 

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Photo Of The Day 

Potd_img_5271_561 Peaceful protest in front of the Manoogian Mansion in downtown Detroit last night

By: Michael Lucido