In 2006, the Charter County of Wayne (“County”) selected AECOM Technical Services Inc. (“AECOM”) to be the program manager for the construction of a new Wayne County Regional Justice Center. The center would house the County’s jail, its juvenile detention facility, a number of its courts.
AECOM determined in a 2008 feasibility study that the County could not afford to construct the center, and in 2010 it proposed a separate plan for the construction of a consolidated jail. However, in October of that year, the Wayne County Commission (the “Commission”) voted 14-1 to issue notices of the County’s intent to issue bonds to finance both a $300 million jail and a $400 million courthouse. The notices that the County agreed to issue included letters. The Commissioners had an incentive to issue the bonds before December 31st when the federal Recovery Zone Economic Development Bond program to lower annual repayments would end.
The less feasible courthouse plan did not move forward, but the County allowed the jail plan to continue independently. The designed capacity of the facility was 2,000 beds. On November 4th, 2010, the Commission voted 11-3 to approve up to $300 million in 30-year bonds for the jail. AECOM presented its financial analysis to the County in December confirming a total expected project cost of $300 million. The IRS issued $200 million in bonds on December 22nd to finance the planned jail. Any additional bonds issued would not be subject to the same cost-saving federal interest subsidy.
In September of 2011, construction of the jail broke ground at the corner of Gratiot Avenue and St. Antoine Street in downtown Detroit (the jail is referred to as the “Gratiot jail”). Work continued until June 11th, 2013, when construction was temporarily suspended due to cost overruns: the County learned that the project was expected to run $91 million over the approved $300 million. At the time of the suspension, $147 million of the $200 million bond proceeds had been spent on the project. The total project cost would grow to $157 million due to outstanding work invoices and demobilization/closing costs.
The Wayne County Building Authority (“WCBA”) officially terminated its price agreement with the construction company, Walbridge-dck, on August 15th, 2013. With the construction contract terminated, the County considered a proposal from the State of Michigan to move the project to the vacant former state prison on Mound Road, Mound Correctional Facility (“MCF”). The State offered to lease the facility to the County for $1 per year. As the contract was terminated in August, Wayne County Prosecutor Kym Worthy announced an investigation into potential misconduct that may have occurred during the Gratiot jail project. The next month, September 2013, Judge Timothy Kenny in the Wayne County Circuit Court empanelled a one-man grand jury to investigate the claims.
With the future of the Gratiot jail uncertain, private developers submitted five separate bids to purchase the property along with four other downtown buildings: the Frank Murphy Hall of Justice, the Division I and II jails, and the Juvenile Detention Facility. On October 29th, 2013, after considering the five proposals, members of County Executive Robert Ficano’s administration presented their recommendation to the Commission. They recommended agreeing to a proposal from Dan Gilbert’s Rock Ventures LLC, which was to purchase the properties from the County for $50 million and develop them into commercial retail spaces, housing units, a hotel, and an entertainment complex. Rock Ventures controlled the nearby Greektown Casino and contended that moving jails and courts away from the area would benefit the neighborhood. On November 7th, the Commission missed its deadline to decide whether or not to accept the proposal.
Meanwhile, on October 31st, 2013, the County and the WCBA filed a lawsuit against three companies that had worked on the Gratiot jail project: AECOM, the program manager and design and engineering firm, Ghafari Associates LLC (“Ghafari”), an architectural firm and programming subcontractor, and Walbridge-dck, the project’s construction company and a joint venture between Walbridge Aldinger Co. and dck Worldwide LLC. The County sued for professional negligence, breach of fiduciary duty, breach of a guaranteed maximum price agreement, breach of an owner/architect agreement with AECOM and Ghafari, and breach of a pre-construction agreement with Walbridge-dck. On January 31st, 2014, AECOM filed a countersuit alleging that the cost overruns were caused by incompetence on the part of County officials. Walbridge also filed a countersuit based on the claim that the County owed unpaid balances from the Gratiot jail construction, and in September of 2014, the WCBA and the Commission approved paying the company a $6.7 million settlement. However, in December of 2014, a subcontractor that had worked under Walbridge-dck filed its own lawsuit against both the company and the County alleging that it did not receive all of the money it was owed from the project in the settlement. The County settled its lawsuit against AECOM and Ghafari on July 7th, 2016 for a total of $2.5 million. On September 16th, 2014 the one-man grand jury in the Wayne County Circuit Court indicted the County’s former CFO Carla Sledge, the Chief Assistance Corporation Counsel Steve Collins, and the jail project owner’s representative Anthony Parlovecchio for various forms of misconduct in connection with the failed Gratiot jail project. In April of 2017, the Michigan Court of Appeals threw out the indictment against Parlovecchio. Sledge and Collins still face charges.
In September of 2014, the County had yet to decide on a plan for the Gratiot site and the jail. On September 11th, members of County Executive Ficano’s office presented five possible plans for the jail project to the Commission. Two involved completing the 1,976-bed Gratiot jail and renovating the Frank Murphy Hall of Justice Circuit Court (“FMHJ”). The County could either do this while keeping the County’s Hamtramck (Division III) jail open or it could close the Hamtramck jail and outsource 400 people from the County’s jail population to other agencies. Both of these options would cost $372.5 million. Two other plans involved moving the jail and courthouse to MCF. The County could either build a 2,392-bed jail facility and courthouse there for $651 million or it could build a 2,008-bed jail facility and courthouse there and outsource 400 people from the County’s jail population to other agencies for $630.7 million.
The fifth option the County staff presented involved renovating existing facilities instead of building a new jail or courthouse. According to their presentation, it would cost an estimated $80 million to renovate the Division I and II jails and $20 million to renovate the FMHJ for a combined cost of $100 million. Including the $157 million already spent on the Gratiot jail project and the $0.6 million bond issuance costs for new borrowing, the staff concluded that the renovation plan would cost $257.6 million in total. According to Crain’s Detroit Business, this option was presented by officials as a “long shot” due to the age of one of the existing jail buildings.
On October 16th, 2014, the Commission decided in a 12-3 vote that the jail project would not be moved to MCF. The Commission had not made a final decision on a plan by January 5th, 2015, when a new County Executive, Warren C. Evans, took office. On April 27th, 2015, County Executive Evans released a “Recovery Plan” to attempt to avoid County bankruptcy and stated that the Gratiot jail project could not be completed until the County eliminated its structural deficit. In June, County Executive Evans formally requested that the Michigan State Government declare the County to be in a state of financial emergency; Governor Rick Snyder granted the request on July 22nd, 2015. On August 6th, the Commission approved entering into a Consent Agreement with the State in order to give the County authority to implement the Recovery Plan, and the County entered the agreement on August 13th.
The following year in July of 2016, the County hired a consulting company, Carter Goble Associates LLC, to design and oversee the completion of the Gratiot jail project for a price of slightly under $4 million. On September 9th at 7:30 pm, community members gathered at Gratiot Avenue and St. Antoine, the site of the unfinished Gratiot jail, to express solidarity with nationwide prison strikes and to protest the new and old jails in Wayne County. On the Facebook page for the event, 107 people indicated that they were attending and an additional 270 indicated that they were interested in attending.
On September 23rd, 2016, the County opened a Request for Qualifications (“RFQ”) to identify companies interested in receiving the contract to finish the Gratiot jail. After all qualifications were submitted, the County would issue a Request for Proposal (“RFP”) to selected companies, inviting them to develop and submit a full proposal for the jail. On October 18th, the State released the County from the Consent Agreement and on November 16th, Mannick & Smith Group finished its assessment of the unfinished Gratiot jail and announced that it was still structurally sound. On November 24th, the day of Detroit’s Turkey Trot run and parade, community members protested the County’s re-starting of the jail project by displaying a “No New Jails, No Old Jails” banner and passing out pamphlets titled “Stop the construction of the Wayne County Jail.”
Only one company, Walsh Construction Co. (“Walsh”), had responded to the County’s RFQ by the start of December. The next month, January 2017, Walsh’s was still the only submission and the County announced that the deadline to submit would be February 10th. Four days before the deadline, Rock Ventures made an offer to the County to build a new Criminal Justice Complex (“CJC”) on property between Warren Avenue and I-75. The offer included the County transferring the Gratiot site to Rock Ventures for redevelopment. On February 10th, the County extended an RFP to Walsh.
A Commission Meeting on February 16th, 2017 was delayed by 42 minutes due to approximately a dozen anti-jail demonstrators who entered the room. In advance of the demonstration one protest representative, Alicia Hilgers of Detroit Eviction Defense, said in a statement, “We don't want a new jail, whether it's built by Gilbert's Rock Ventures or any other company. In Detroit, our communities are struggling just to get by, and the county wants to spend millions of our tax dollars to lock more of us up when that money could be going toward creating more affordable housing or stopping school closures. Our communities know what we need, and it isn't more cages.” One person from the group was arrested. After the demonstrators were removed and the meeting began, the Commission approved a $500,000 stipend to be paid to Walsh for its response to the RFP in the case that the County decide to pursue a different proposal, such as that from Rock Ventures.
Another anti-jail demonstration took place on April 21st, 2017 in the form of a “speak-out” against the new jail. Protestors gathered in front of the unfinished Gratiot jail from 4pm-6pm. One focus of the demonstrators was to criticize the County’s choice to allocate funds to a jail project rather than community resources. Event organizer David Langstaff stated, “We’re trying to highlight the contradiction between spending hundreds of millions of dollars on the construction of a new jail while 18,000 people have their water cut off.” The demonstrators also advocated for broad restructuring of the criminal justice system and utilizing alternatives to incarceration.
Walsh and Rock Ventures submitted final proposals for the jail project on June 28th, 2017. The Walsh Proposal included options for a 1608-bed jail for $269 million or a 2,220-bed jail for $317.6 million, both at the Gratiot site. The County would be responsible for any cost overruns. Under the Rock Ventures Proposal, the County would be responsible for $380 million out of a total cost of $520.3 million to construct the CJC, which would include a 2,280-bed jail, a 160-bed juvenile detention facility, 25 courtrooms, five hearing rooms, and offices for the sheriff’s and prosecutor’s department offices. The County would also be responsible for the price of buying the land for the CJC, which at the time was a Detroit Department of Transportation property. Rock Ventures, rather than the County, would be responsible for any cost overruns. Among other stipulations, Rock Ventures would acquire the Gratiot jail site for redevelopment.
On July 31st, 2017, the County announced that it would focus its resources primarily on reaching a final deal with Rock Ventures, but the Walsh Proposal was not dismissed as an option. Despite the fact that the deal had yet to be finalized, the County began taking steps to enact the Rock Ventures Proposal. For example, on September 28th, the Commission approved a resolution to acquire the title to a foreclosed property after being advised by County Executive Evans that the property was near the proposed site for the CJC and that the land may be used as a part of the development.
On October 5th, 2017, still before the County finalized a deal with Rock Ventures, the Commission and the Detroit City Council (“City Council”) came to an unofficial deal for a Land Swap Agreement (“LSA”) to allow the County to obtain the property for Rock Ventures’ CJC. The LSA stated that the County would receive the property at 1301 East Warren Ave. bordering I-75, a Detroit Department of Transportation property at the time, and Detroit would receive either the former American Motors Corporation headquarters or $775,000. Under the agreement, the County would lease the East Warren Ave. property back to Detroit until June 1st, 2018.
Residents who lived near the proposed site for the CJC attended a community meeting to discuss the plan on October 19th, 2017. The meeting was not organized by the City Council or the County but by Nicholas Miller, a community member who lives three blocks from the site. Miller stated that he organized the meeting because he believed those in power had not addressed the community or its concerns. At the meeting, approximately 60 residents criticized the land swap deal. Concerns included neighborhood safety if a jail were to be built in the area. Residents also criticized Detroit and Wayne County leaders for a perceived lack of effort to seek community input. One resident stated, “I want to know why they can’t put that on the ballot for us to vote on.” Local leaders in attendance included City Councilwoman Mary Sheffield who represents the area, Detroit mayoral candidate State Sen. Coleman Young II, and representatives from Detroit Mayor Mike Duggan’s office. In a statement to the press, Councilwoman Sheffield expressed concern about the level of community input, asking, “Who decided this area? Was [the] community ever at the table? I’m not confident they were.” According to the Detroit News, Sen. Young stated, “We don’t need to be building more jails. We need to be creating jobs and opportunities for people in the city of Detroit to be able to feed themselves and feed their families.”
On Wednesday, November 8th, 2017, the County hosted a public meeting on the LSA at Bethel AME Church at 6pm. The Michigan Chronicle reported that an “overwhelming majority” of the community members in attendance opposed the LSA. The paper quoted County Executive Evans stating at the meeting that he would continue to dialogue with the community “ad nauseum.” The next day, the City Council’s Planning and Economic Development Standing Committee forwarded the LSA to the whole City Council for final review and approval. The City Council was scheduled to vote on the agreement on November 14th.
The morning of the 14th, Nicholas Miller filed a lawsuit seeking an emergency court injunction to block the City Council from authorizing the swap. Miller’s lawsuit was filed in the Wayne County Circuit Court against the City Council, the City of Detroit, Mayor Mike Duggan, and City Council President Brenda Jones, alleging negligence and violation of due process because the City’s zoning ordinance did not permit a jail to be located on the site. In addition to an injunction, Miller’s lawsuit sought a study of traffic and air quality (which Miller stated was a requirement of the City Code) and a report regarding the impact of the proposed CJC on the East Ferry Historic District in which it was to be located. A number of residents attended the City Council meeting later that day to express their concerns and urge City Council members not to approve the LSA. In response to comments from community members criticizing the jail’s planned location, Khalil Rahal, the Executive Director of the Wayne County Economic Development Corporation, defended the site choice by stating that “there is an incinerator nearby and there isn’t a high likelihood of having residential [development] there in the future.” The City Council voted to delay making a decision on whether to approve the LSA until the next week, citing insufficient information and insufficient time to address constituent concerns.
The incinerator referenced is the largest of its kind in the United States. It has been classified under the Clean Air Act as a major source of air pollution, and among the pollutants it emits are hazardous carcinogens and criteria pollutants that are harmful to the respiratory and cardiovascular health of those nearby. Between 2013 and 2017, the facility exceeded emission limits for pollutants of this type more than 750 times. It is located at 5700 Russell Street, across the street from CJC site at its northeast corner. In October of 2016, the Great Lakes Environmental Law Center targeted the incinerator with a lawsuit for alleged failure to meet safe emissions standards, and in May of 2018, a petition to shut down the incinerator was delivered to Mayor Duggan with 15,000 signatures. A separate facility that manages hazardous and non-hazardous industrial waste is located two blocks northeast from the CJC site at 1923 Frederick Street. Since October of 2015, the facility has received at least 7 violation notices from the Michigan Department of Environmental Quality. These violation notices were issued in response to allegations that the facility repeatedly released strong chemical odors and failed to maintain adequate negative pressure to prevent emissions from escaping. Due to air pollution from these facilities and the I-75 highway, former head city planner Hilanius Phillips had previously sent two petitions to the City Council discouraging general residential development in the area and predicting that residents would face health problems similar to those caused by the Flint water crisis. He reiterated this claim when the CJC site was announced, stating that those incarcerated at the facility, those employed in the jail, courthouse, or sheriff's office, and those who visit the building regularly would all be at risk.
Judge David Groner of the Wayne County Circuit Court denied Nicholas Miller’s lawsuit on November 21st, 2017 on the grounds that Miller’s claims that the jail would disrupt his quality of life and decrease property values were premature, that the Court lacked the authority to intercept the LSA transaction, and that the City had a right to sell its own property. Later that day, the City Council approved the LSA. Councilwoman Sheffield, who had voiced her opposition to the agreement before, was absent. Councilwoman Raquel Castaneda-Lopez had previously expressed concern about air quality at the site. However, at the meeting on the 21st, she voted in favor of the proposal, stating that she had received information about the CJC’s HVAC system to mitigate poor air quality. She also stated that the County committed to holding at least two community meetings in order to seek more feedback from the public. The Commission had not yet voted on the LSA. The County officially rejected the Walsh Proposal on December 1st, 2017 and announced that it would not finish the Gratiot jail. It also announced that Rock Ventures would pay the required $500,000 stipend to Walsh if a deal were to be formally made between Rock Ventures and the County to build the CJC.
County Executive Evans announced that the County and Rock Ventures tentatively reached a final deal on March 7th, 2018. The deal included construction of a CJC costing $533 million in total with the County responsible for $380 million and Rock Ventures responsible for the rest and any potential cost overruns. The County would transfer the Gratiot jail site, the existing Division I and II jails, the juvenile detention facility, and the Frank Murphy Hall of Justice to Rock Ventures. That day, the office of County Executive Evans sent a transmittal letter to Commission Chairman Gary Woronchak that submitted for review, consideration, and approval three documents: 1) the Development and Purchase and Sale Agreement between the County, the WCBA, and Rock Ventures, 2) the Closing Memorandum between the WCBA and Rock Development Group, and 3) the LSA with the City of Detroit. Also on that day, Wayne County launched a website about the CJC.
On March 23rd, the County announced the dates of the two community meetings it would be holding. The County advertised that the purpose of these meetings was for residents to be able to "learn more and ask questions about the planned criminal justice complex." The first meeting was four days later on Tuesday, March 27th. It took place at the Bethel AME Church from 6 pm-7:30 pm. On April 3rd, the Commission’s Committee of the Whole met and discussed "communication dated March 13, 2018 requesting Commission approval of a resolution to indicate the County's intent to issue bonds pledging the County's limited tax full faith and credit not to exceed $425,000,000 to pay the County's cost of its Criminal Justice Center project." 12 Commissioners voted in favor of approving the item; 3 were excused. At the same meeting, the Committee voted to approve the LSA, with 9 voting in favor, 3 against, and 3 excused. On April 5th, the Commission met and voted to formally approve both resolutions. County Executive Evans publicly announced the approval of the LSA on that day. County Executive Evans did not announce that the Commission had also approved releasing the notice of intent to issue bonds.
On April 10th, after the LSA had been approved, the County held the second community meeting at the same time of day and location as the first. Melissa Daub, a candidate for the Commission who attended the meeting, stated on her campaign Facebook page that “many concerned citizens of Wayne County” were in attendance and the discussion topics included “alternative/diversion programs, parking/traffic/public transportation around the site, environmental concerns, the need for a new facility, and the benefits to Dan Gilbert.” The notice of intent to issue bonds ran in the print version of the Detroit Free Press on Tuesday, April 17th, 2018. It appeared on the Classifieds page, A14.
On April 24th, May 24th, and June 4th, the Commission’s Committee of the Whole discussed (respectively) the Closing Memorandum, the Development and Purchase and Sale Agreement, and the resolution to issue bonds for the CJC. On June 7th, the Commission voted 14-1 to formally approve the agreement with Rock Ventures and to authorize the issuance of Distributable State Aid Capital Improvement Bonds. The Commission also voted to approve retroactive 2-year contracts that began on March 23rd, 2018 with legal firms Miller, Canfield, Paddock & Stone, PLC and Marine Adams Law, PC to provide legal services regarding bonds and the CJC.