Gilbert Wants State Help For Detroit Redevelopment Projects

MIRS, July 25, 2016 

In late 2012, the Legislature and Governor rejiggered local financing law to grease the wheels for a new downtown Detroit hockey arena for the Red Wings. A $200-million state issued bond the Ilitch development company must pay back followed (See "Unpaid Taxes Aside, House OKs Ilitch Property," 12/13/12). 

Now, Quicken Loans CEO Dan GILBERT is looking for some state government help for a host of developments to bring to downtown Detroit, as well. 

The argument Gilbert made privately to Gov. Rick SNYDER a couple of Fridays ago is, "if you did that for (Ilitch), why not for me?" This information is coming from two sources familiar with the behind-closed-doors negotiations between the businessman and the Governor. 

One item on the table is for the state to pick up the transfer cost of moving the Wayne County jail to the previous state prison on Mound Road. The price tag, according to one source is around $500 million. 

Gilbert also is eyeing a mixed-use project on the old Hudson store sight. He intends to build businesses on the ground floor and turn the upper floors into condos. His proposed revenue stream would include collecting a portion of the income tax revenue collected from the employees on the lower floors and a portion of the sales tax revenue generated from the sale of the condos on the upper floors. 

In addition, his request includes a piece of the state income tax collected by the state from the tenants in the condos. 

Any changes to the state's tax law, however, would need legislative sign-off and there is concern among that "Detroit fatigue" may be setting in among lawmakers after having navigated through the Ilitch property, the Detroit Public Schools (DPS) bailout and the city of Detroit bankruptcy. 

Also, just as the Ilitch property legislation was passed in Lame Duck 2012, it's likely lawmakers wouldn't get a sniff of what Gilbert has in mind until after the Nov. 8 elections.

"There is no way a House Republican is going to do anything for Detroit" prior to the election, according to one source, considering the state assistance given to the state's largest city in the last four years. 

The Governor apparently has not signed off on the deal and has his own concerns in that he has already pushed the Legislature to sign off on paying off $465 million in DPS debt while steering $150 million to a new Detroit school district to help with start-up costs. 

One hiccup in the talks was when Gilbert suggested building a new soccer stadium on the Wayne County jail site, raising the possibilities that the Detroit Pistons, now in Oakland County at the Palace, might move into that new facility. 

Apparently, once the Ilitch folks got wind of that, they became concerned because they were thinking the basketball team might move into the new Red Wings Stadium when it's completed after the 2017 season.   

Detroit Mayor Mike DUGGAN is aware of the talks, but his office reported he is not involved in any negotiations and it, of course, will not confirm that talks are going on. 

Snyder Press Secretary Anna HEATON would say only that, "Discussions are ongoing with the MEDC (Michigan Economic Development Corporation), but we can't offer comment on projects that are still in development."

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