Can Bob Ficano salvage his failed jail?

Wayne County hopes to salvage something from failed jail project

By Rod Meloni - Reporter, CFP ®
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DETROIT - It turns out salvage will play a key role in Bob Ficano's immediate future.

It is his sincere hope he can salvage something; perhaps make a silk purse out of a sow's ear [as my mother used to say], from the failed jail site. But in doing so, there will be considerable salvage of crushed concrete and steel at the failed jail project site as well.

Story: Dan Gilbert wins bid to buy, build on failed Wayne County jail site

From the beginning in 2011, the new jail project has been a multi-million-dollar loser for Wayne County and its taxpayers. Championed by former Ficano right-hand Azzam Elder and cohort Turkia Awada-Mullin, the idea was a simple and seemingly good one: Build a new jail that will allow Wayne County to escape its federal consent agreement designed to force the county to properly run its jails.

It was supposed to allow the county to empty out its old, decaying, overcrowded and inefficient jails downtown on Clinton Street in Detroit and its other facility in Hamtramck. It could then use just one centrally located jail. The new jail was supposed to have 2,600 cells and lots of bells and whistles making it more modern and less expensive by a long shot, changing the jailing game that has become a financial albatross for the county and its Sheriff, Benny Napoleon.

Napoleon goes over budget every year trying to staff the jail the way the federal judge requires. To do that he ends up paying deputies staggering amounts of overtime. In 2013 he started deficit spending in June when the fiscal year ended at the end of September. The actual budget overrun was $30 million.

But to be fair, the Sheriff is not alone in this river of red ink. No, this financial sleight of hand also lies at the feet of County Executive Bob Ficano and the County Commission. They budget the jail system for the required number of prisoners the federal judge says they have to, which is roughly 1800. That is nice on paper, but ignores the usual 2200 or so prisoners actually in custody on any given day and the other four hundred under house arrest being monitored on electronic tethers. At 2,600 beds the new jail was also supposed to take all of those pressures off.

Well, here we are at the end of 2013, two years after the ball started rolling and the new jail site bears the skeletal remains of a badly mangled Frankenstein. Its progress was stopped last May after it became obvious to Bob Ficano that he was shoveling money into a black hole. Coming in at an estimated $391 million, $91 million more than it was budgeted for, Ficano knew he had to shut it down. It was an embarrassing mess that went on all summer, with us in the media trying to figure out who might go to jail as a result of this boondoggle of boondoggles. In that time Ficano decided he had to try and recover something somehow. He appointed a committee of seven people from his office, the Wayne County Commission and the Building Authority. He tasked them with trying to figure out a way out.

As they went to work they soon found out it is better to be lucky than good. Dan Gilbert and his real estate point man Matt Cullen started talking about how the jails and courthouse all sit as the gateway into Detroit as you exit off of Interstate 375 and the jail construction project has been a horrifying eyesore for two years for those coming downtown for Tigers and Lions games. They were interested in coming up with a new plan for the gateway and brought it to the RFI committee.

Cullen showed off a billion-dollar creation, including a hotel, a retail and entertainment district that would complement next door Greektown along with lofts and townhomes. They offered to buy the Frank Murphy Hall of Justice, the two old jails on Clinton Street, the juvenile detention center and the seven acre failed jail site for $50 million. They also agreed to demolish and remove whatever remnants are left over when the county transfers what it can from the failed jail site out to the state owned, vacant Mound Road Correctional Facility. That certainly got the RFI committee's attention.

Several other bidders went to the RFI committee with plans but because Dan Gilbert, as owner of the Greektown Casino, had right of first refusal on the land, he wound end up getting chosen for the project.

It was fortuitous that Gilbert came along and that Downtown Detroit is on the upswing thanks in large measure to Gilbert. Over the past two years he picked up the development torch after the Ilitches and Peter Karmanos got the ball rolling. But the RFI committee had to figure out the other pesky part of this whole deal, how to get a new jail with 2600 beds built with the meager monies left from the $150 million-plus already spent on a doomed project. After working long hours they figured out it was best to take up the State of Michigan on its offer to move the jail site to the abandoned Mound Road prison site, bring as much of the new jail's cell pods, heating, cooling and electrical equipment from Gratiot out to Mound Road as they could and build a new, Spartan but very serviceable jail.

The goal is to spend $200 million, use Gilbert's $50 million, the $50 million left in available and unspent money in hand for the new jail and try and figure out how to sell another $100 million dollars in bonds it has authority to sell for the original jail. This may be a huge problem in that the County's credit rating is so bad it is likely not able to sell the bonds without help and the State apparently is not interested in offering its bonding authority to sell them. That is a very sticky wicket the RFI committee will have to work out. But this plan is what the RFI committee brought to the County Commission and the Building Authority today because as a group it believes it is the best deal it could strike considering current constraints.

Now let's take a moment to consider the audience Bob Ficano was selling to. He originally cut out the County Commission from any oversight or decision making of the new jail project after they green lighted the project at Awada-Mullin's prodding. Ficano never once brought a change order to the Building Authority and that was its main job, to keep the project financially on target. Ficano started cancelling Building Authority meetings as soon as he found out the jail was becoming irretrievably over budget. Then, when he had no choice, Ficano simply announced to the Commission and the Building Authority the project was nearly $100 million over budget and had to be stopped.

This is a room full of people only marginally less bloodthirsty than a Roman Coliseum audience when Ficano shows up. These people are not amused with his inability to manage a budget and even less so with his construction prowess. It was into that atmosphere Ficano and the RFI committee walked with their new jail plan. Ficano was asking for a vote as early as next week that would start a 90-day process to tie up all the deal's loose ends. Commissioners were feisty, telling Ficano that all the nice architectural drawings had little impact on them. They essentially told him they would not believe him if he told them what time it was. None of these people can be blamed for their skepticism. Once bitten twice shy! Yet being angry at Bob Ficano does not change the fact that some kind of exit strategy needs to be found to escape this financial disaster. Whether the Commission can get comfortable with the RFI committee's plan and green light the 90-day shakedown period is anyone's guess tonight. We will learn that soon enough.

In closing, my daughters brought home a shelter cat of questionable intelligence a couple of years ago. It bounces around and falls off of high perches wrapped in curtains or towels in a heap and then walks away as if nothing happened. I think of that feline as I watch this process unfold. Bob Ficano is trying to show cat-like reflexes as he tries to salvage something resembling a good deal out of his jail disaster. He's walking with his head up as if nothing happened.

Yet at the same time the FBI is combing over the failed jail mess with a fine tooth comb and Prosecutor Kym Worthy says there was criminal activity here. We will have to wait to see if someone ends up going to jail as a result of this fiasco.

There does not appear to be a great ending to this saga -- millions of dollars will likely be lost -- but this jail plan may just offer a glimmer of hope that something more than crushed concrete can be salvaged.

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