Wayne County jail project: It's over downtown!

Wayne County ends contract in halted jail construction

By Rod Meloni - Reporter, CFP ®

DETROIT - The brown steel girders rust in the sun, the white plastic covering exposed cinderblock work flaps in the breeze and the meter continues to run like a taxicab's at the silent Wayne County jail project. The only activity you will see here in the days to come is what the construction industry calls "demobilization."

It's a fancy word for all the Walbridge/DCK construction workers picking up their equipment and leaving the site for good. Today the Wayne County Building Authority voted to end its contract with Walbridge/DCK, stopping a particularly sorry and expensive chapter in the history of Michigan county governance.

The current estimates place the taxpayer cost for this half-finished hulk at $120 million with a wind-down cost of between $5 and $10 million. The project, were it to be completed, was estimated to run another $91 million over budget. Because the construction is now officially stopped, that number is likely to come down somewhat.

More from Rod Meloni: Wayne County: Right back where we started from

This day had to come. The exceptionally costly aftermath of this debacle is far from settled and farther from sure. The current conventional wisdom, dropped on a surprised county commission yesterday, is the belief is that the State of Michigan, a nearly broke Wayne County and the bankrupt City of Detroit can partner to repurpose the now empty Mound Road Correctional Facility. It too sits empty near Ryan on Detroit's East side.

The goal is to create not just a new jail they all can use, but to make an entire court and corrections complex out there. In order for that to happen and Wayne County recoup its losses the Governor's office is "urging" Ficano to sell the jail site to one of three bidders. They would not only build an entertainment district or a Soccer Stadium, they would also put taxpaying businesses on the site. It's a win-win if they can make the numbers work. The reason for the quotation marks though is Ficano finds himself boxed in. The county cannot afford to build the jail on its own anymore with all the cost overruns and it has no ability to borrow any more money because its bond rating has been reduced to junk status. That unhappy development comes thanks to Wayne County's considerable deficit spending habits. In reality, the only place left to go is get help from the State which stepped into the process at that committee of the whole meeting downtown yesterday. You won't see one, but there is a for sale sign up on the parcel across from Ford Field on Gratiot that should salvage some kind of better outcome than the one taxpayers were looking at a week ago.

But there are too many twists and turns out here at the construction site to contemplate. The first order of business now is figuring out just what happened. Building Authority Chairperson Eileen DeHart says the County Executive's office treated her and fellow board members like "mushrooms." They stopped receiving monthly construction updates from AECOM-Ghafari late last year. No one at the time outside the Ficano Administration or the project teams knew why. Building Authority member Jim Saros told Local Four News on camera today he believes it was because a new building manager started looking at the books last October and found the project $50 million over budget. In his mind no one in the Ficano Administration wanted to expose that fact in public. Most of the meetings until May were cancelled and the couple that did happen did not have the normal project update briefings for the Building Authority. All the Authority members were told was everything was going smoothly. We now know that was not true. Authority members are particularly frustrated by being kept in the dark because it was their job to approve any "change orders" [cost overruns] and they were brought none of any significance.

"To wake up in the morning and read in the newspaper that this project is $91 million over budget absolutely it was a slap in the face!" Saros said after today's vote.

It was the County Executive's office that cancelled all of those meetings. AECOM-Ghafari would normally have taken part in those meetings providing statistics and insight into the development. Now the company is being pointed to by Ficano and his team as the bad acting culprit here; allegedly approving $42 million in change orders. Its contract is still in force with the county, but the expectation is that won't last much longer and a lawsuit is undoubtedly forthcoming in the months ahead unless something unusual happens.

Making that situation particularly poignant is the fact that the Ficano team, particularly Chief Financial Officer Carla Sledge [who is leaving the administration October 1st] was supervising the project with the Building Authority. Much of the conversation at today's Building Authority meeting surrounded the fact Sledge and the Ficano Administration thought it would be perfectly fine, and a cost savings, to go without a personal project manager. The county had fired its original manager, Anthony Parlovecchio, one month into construction. The Building Authority stressed today it had pleaded with Sledge and the administration to have its own project manager in place. They wrestled with this question for more than a year. Eventually a new personal project manager was hired. But, authority members were careful to point out in their meeting today it was in that timeframe this jail project careened off the budgetary rails.

Now, you're probably wondering if perhaps someone ought to go to jail in this jail fiasco. It certainly has crossed the mind of the county's auditor general Willie Mayo. He has been investigating this project for the better part of a year now. We were expecting to see his report last April. That presentation has been put off until the middle of August. The expectation is we will see it sometime next week. But this afternoon the Wayne County Prosecutor's office is confirming what Local Four News first reported last week: Mayo brought information to the prosecutor for criminal investigation as is his professional obligation as an auditor. Here is the statement out from Kym Worthy's office: "We have received a copy of the Auditor General Willie Mayo's report. However, it will not be released and we will not comment on the contents. We are conducting an investigation regarding the Wayne County Consolidated Jail Project. It is our policy not to comment on an ongoing investigation." That prompted Ficano's office to respond: "We only received his draft report yesterday and there are numerous inaccuracies we will address with Mr. Mayo. We also intend to ask the Auditor General for documentation supporting his conclusions." Said June West, spokesperson for CEO Robert Ficano.

Ficano himself and most members of the Building Authority are trying to push everyone's attention forward not backward. They envision a far better future for a jail that is part of a Federal Consent agreement. Saros told Local Four News today "there's going to be a loss. I mean, but it's not gonna be the kind of number that everyone's talking about. I think that number is recoverable because it's such a prime piece of property in 2013." It wasn't back when the county purchased the parcel from Greektown Casino was in bankruptcy court.

Everyone certainly is hoping Saros' assessment is correct. But there are no certainties; there aren't even any good estimates of what any of this will cost or what costs might be negated. It certainly was what the Building Authority fretted about today. The construction downtown for all intents and purposes is finished. Yet, this jail fiasco will be with us for years to come. Tonight no one knows at what cost.

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