New Wayne County Jail: No sale, no move
DETROIT – Forget what you thought you knew about the new Wayne County Jail Construction debacle that's turned into a desperately dark and deep financial hole.
Local 4 News has learned the entire possibility of a bailout and clean break will not happen the way it's been recently portrayed in the headlines.
Wayne County Executive Bob Ficano has apparently decided the five proposed deals that would have turned the rusting and idled construction site into an entertainment district [a la Dan Gilbert] or an MLS soccer stadium [a la Silverdome Owner Triple Properties] either will not or cannot work. Thus, according to sources, expect no sale or a move.
Instead Ficano has a preferred deal he and his staff will pitch to the Wayne County Commission and the Building Authority next week.
The deal is complicated, has a lot of moving parts and more than anything is NOT likely to let us know much about how the old project went so badly off the rails.
The new jail project's $100 million cost overrun is nothing short of an embarrassment.
In order to build the jail using the currently budgeted funds, it would have only 1,400 beds -- which is 200 beds below the federal consent agreement the county has with the federal government.
The consent agreement to address jail overcrowding and other conditions is costing the county something like $30 Million a year in jail overtime. Also, at 1400 beds it would require the County to keep at least one or two other jails open.
The entire reason Ficano's team decided to build a new jail was to put all of the county's prisoners in one to save costs. So much for that idea!
The new jail's monumental failure is also a staggering blow to a spendthrift county government unable to come to a deficit reduction plan with the state of Michigan.
Needless to say, the state is watching how this all plays out. It was at the state's urging that Ficano moved forward with this half-finished jail site sale possibility.
The state suggested moving the operation to the now vacant 46 acres of the shuttered and state owned Mound Road Correctional Facility at the total cost of one dollar! But, because a prison is not a jail, the conversion costs would be significant.
What to do?
Ficano is fully aware the vast cost overruns are a serious problem politically and otherwise and tonight he thinks he has the solution. Today Local 4 News has learned that Ficano wants to tear up the current construction contract between the county, Aldinger & DCK Worldwide construction and project managers AECOM-Ghafari. [This is the contract that's now roughly $100 million over budget]
Instead, Ficano wants to deal only with DCK Worldwide and draw up a new construction contract that would create a public-private partnership, complete the jail at the originally planned two thousand beds and have DCK [as the new private owner] lease the jail back to Wayne County.
In order for this to happen, there would be roughly 90 days more of the jail site sitting idle while the contract is drawn up. But because the original contract would be voided the nearly $70,000 a day costs would stop.
This idea would seemingly solve the ultimate problem of delivering a completed jail. But what about the $100 million cost overrun on the old contract? Well, it appears Ficano is looking to pay DCK Worldwide the roughly $40 million he has left in the kitty to complete the jail project and is looking for DCK to work out a negotiated settlement with AECOM-Ghafari as a way to hopefully recoup millions of dollars of cost overruns from the original and derailed project. As previously stated, there are a lot of moving parts. EVERYTHING would have to go right in order for this program to succeed. As we have seen, very little has gone right so far. Among the numerous sources used today to cobble this story together, there is considerable skepticism. There are also a lot of questions looming.
Will the County be made whole under this scenario?
Will DCK Worldwide really want to do the public-private partnership if it cannot negotiate enough payback from AECOM-Ghafari?
What if the County Commission wanted to sue any of the entities that put the original jail project off the rails? Who was responsible for that disaster?
Why didn't the proposals to sell work? All of these remain unanswered tonight.
All of the parties who put in proposals to buy the property or properties around the new jail site have signed a confidentiality agreement and can say nothing.
Wayne County Chief of Staff June Lee put out this statement in response to Local 4's story tonight:
"The county continues to explore and vet a number of options for the jail project including a move to Mound Road, continuing construction at the current site as well as other public private partnership opportunities. We will be presenting all of the options with the pros and cons to the County Commission and Building Authority next week and we will discuss any concerns they have before proceeding down any particular path."
Next week promises to be an interesting and eventful one.
Local 4 News will continue to keep you ahead of this story.
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