Stadium Finance

Dan Gilbert Offers A Fancy Jail For Free Soccer Stadium Land

Surprise, suprise. It's a scam

Stadium Finance
Dan Gilbert, celebrating a fresh scam — Getty Images
Feb 08, 2017 at 12:09 PM ET

While Cleveland Cavaliers owner Dan Gilbert tries to fulfill LeBron James’ wish for another playmaker, the tentacles of his far-flung financial empire are reaching for millions in public dollars.

Gilbert, along with his dear chum and fellow tax dollar giftee, Detroit Pistons owner Tom Gores, would very much like to have an expansion Major League Soccer team of their own. One hitch: there’s no actual stadium in which said team might actually play. But at some point in 2017, MLS Commissioner Don Garber will go ahead and select two cities from a fairly large pool of potential candidates, many of whom are still trying to convince the various local, county, and state legislative bodies that “welfare for millionaires” is something other than a grift.

Having an approved stadium plan in place could help nudge a candidate’s bid to the top of the pile, so on Monday, Gilbert submitted a stadium proposal to Wayne County and it is a doozy.

You see, for years Wayne County has been trying to construct a jail on a chunk of land situated on Gratiot Avenue. Construction began in 2011 but the project has been stalled since 2013. What’s more, they’ve both exceeded the original projected costs and, despite the lack of activity, are continuing to rack up expenses.

Via the Detroit Free Press:

The county spent an estimated $151 million in construction-related costs at the Gratiot site and has about $49 million remaining from what it originally borrowed. Officials had previously said they expected to borrow an additional $200 million.

Gilbert expressed interest in the jail site soon after construction was halted on the complex after cost projections put the cost at about $90 million over budget. Since it’s been idle, the unfinished site has cost the county taxpayers about $1.2 million a month.

So, Gilbert now wants Wayne County to give him the Gratiot site for free, plus an additional $300 million from the county so he can build a billion-dollar “commercial development,” part of which would include a stadium to host an MLS team. (Gilbert didn’t break down what percentage of a billion dollars would be directed towards the stadium itself, but if we use the massive entertainment complex surrounding Quicken Loans Arena as a guide, it’s a relatively small chunk.)

In exchange, Gilbert’s holding company, Rock Ventures LLC, will construct a jail for Wayne County at a cost of $420 million, just in case anyone fretted that the prison-industrial complex was no longer a growth industry. To be more specific, Gilbert is promising to erect a “state-of-the-art, consolidated criminal justice center,” for which he would receive an additional, unspecificed amount of cash over the years in the form of, “credit to be paid to the company for the savings a new consolidated criminal justice complex would provide,” according to the Detroit Free Press.

Let’s do some quick back of the napkin math here. Gilbert wants to spend $420 million but only if he gets back $300 million, free land, and whatever the “credit” amounts to. Seems like Gilbert will probably turn a profit, right? That sounds like a terrible offer, particularly for a county that’s still hundreds of millions in debt and whose credit rating the major agencies, despite a slight uptick, still consider “junk.” Luckily, Wayne County officials are already raising a few eyebrows.

Commissioner Raymond Basham, D-Taylor, downplayed the possibility that the county would accept the offer, saying the “train has left the station” and comparing it to the unlikely event of a Lions appearance in the Super Bowl.

“The taxpayers have spent a tremendous amount of money on the failed jail project,” he said. “There is no good option other than to continue to move forward and get this thing done.”

Basham noted that for the offer to be attractive “it would have to be an out-of-this-world deal.”

The Lions will not appear in the Super Bowl any time soon and (hopefully) Dan Gilbert won’t be allowed to rip off Wayne County.