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MCS will be renovated w/o tax increase

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Kilpatrick: Depot will be renovated for police without tax increase

Wednesday, March 3, 2004

BY JOHN GALLAGHER and M.L. ELRICK

FREE PRESS STAFF WRITERS

Mayor Kwame Kilpatrick announced Wednesday that the city will spend from $100 million to $130 million to buy the derelict Michigan Central Depot and turn it into the city's future police headquarters.

Standing before the massive structure, in which every window appeared to be broken, Kilpatrick promised that the renovation would mark a milestone for the city and the southwest Detroit neighborhood where the Depot stands.

Paying for it all will not require a tax increase, the mayor said. Instead, the city will using the city's existing borrowing authority. As older bonds for earlier projects are paid off later in this decade, the city will issue new bonds to pay for the depot.

Voters do not need to approve the plan, but City Council does. Meanwhile, the agreement in principle announced Wednesday still needs to be finalized, including a final purchase price.

The city is buying the Depot from CenTra Inc., the Warren-based trucking and real estate network headed by Grosse Pointe businessman Manuel ``Matty'' Moroun, which also owns the Ambassador Bridge.

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MICHIGAN CENTRAL DEPOT RENOVATION: BACK TO GRAND

Mayor reveals plan for police headquarters

March 4, 2004

BY JOHN GALLAGHER AND M.L. ELRICK

FREE PRESS STAFF WRITERS

Mayor Kwame Kilpatrick announced Wednesday that Detroit, without raising taxes, will spend from $100 million to $130 million to buy the derelict Michigan Central Depot and turn it into a state-of-the-art police headquarters.

Standing before the heavily vandalized train station, a once thriving transit center but now a deteriorating hulk, Kilpatrick promised that the renovation will mark a milestone for the city.

"This building is a part of who we are," the mayor said of the historic 1913 station that closed in 1988. "This building has been a symbol of our dilapidation as a city. And now we want it to be a symbol of our renaissance, of our rebirth, of our resurgence."

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Kilpatrick wouldn't say how much of that up to $130-million cost represents the price of purchasing the depot from businessman Manuel (Matty) Moroun, saying the figure is still under negotiation. But Kilpatrick said that instead of asking voters to approve higher tax rates to pay for the purchase and renovation, the city would use existing borrowing authority.

As older bonds for earlier projects, such as the city's waste incinerator, are paid off in 2008 and 2009, the city would issue new bonds to pay for the depot work. Taxpayers would see no increase in their rates, and may see a decrease, the mayor said.

Asked whether voters would prefer even lower tax rates once the current bonds are paid off instead of a renovated depot, the mayor said that the city needs a new police headquarters, and it would cost just as much to build a new building.

Sean Werdlow, Detroit's chief financial officer, said the city could structure the bond deal so it gets money now to begin work on the project but wait until 2008 to begin making significant payments on the bonds.

Walt Watkins, the mayor's chief development officer, praised Kilpatrick's efforts.

"He's been accused of tackling some big elephants," Watkins said at a news conference outside the depot, "and this is a big elephant -- but these are things that have to be done if we're going to bring Detroit back to the type of city we all want it to be."

The city would buy the depot from CenTra Inc., the Warren-based trucking and real estate network headed by Moroun, who also owns the Ambassador Bridge.

Voters do not need to approve the depot plan, but the City Council does. That could prove contentious in the months ahead.

None of the council members attended Kilpatrick's announcement. The council was in session, and council members said they weren't invited. After learning some of the details, members' reactions ranged from opposition to skepticism to tentative approval.

Councilwoman Kay Everett said nothing the mayor says will convince her that moving the police from the current 81-year-old headquarters at 1300 Beaubien into a 91-year-old building is a good idea.

"To me, it's abhorrent to even go that way," she said. "Why create a monster when you don't have to? It's a Frankenstein."

Councilwoman Sheila Cockrel said the one-page letter with highlights of the deal given to the council Wednesday raised more questions than it answered.

Cockrel said she wants to compare the depot deal with other proposals to build a new police headquarters. And she questioned whether Kilpatrick could outmaneuver Moroun in negotiations on a sale price. Moroun's organization has been criticized over the years for high toll rates on the Ambassador Bridge and other business practices.

"When is the last time Matty Moroun did not make out best in a deal?" Cockrel said.

Councilman Alonzo (Lonnie) Bates said he preferred earlier proposals to let Moroun renovate the building and lease it back to the city. But he said he liked the few details he heard Wednesday -- particularly how the mayor plans to pay for it.

"Anything that wouldn't increase taxes, I'd go for that," he said. "Who wouldn't?"

Kilpatrick said the tentative deal calls for CenTra to sell not only the depot but the surrounding land, which could be used for parking, community development, and other projects.

Moroun's organization would be able to bid -- along with anyone else -- to be the developer who renovates the depot.

Kilpatrick said it may take until fall for the city to get a final survey and appraisal of the property and to do other normal "due diligence." Given that timetable and if the City Council approves the purchase, a normal two-year construction schedule would mean the new police headquarters would open in 2007 or 2008.

This isn't the first plan to renovate the depot, which Amtrak pulled out of 16 years ago. Over the years, people have suggested new uses like casinos and hotels.

In a rare public appearance, the reclusive Moroun, who said he grew up in Detroit, stood with the mayor Wednesday. "I love the city," he said. "The mayor's an awesome person who really takes charge, and I enjoy seeing someone who wants to brighten up the city, make it busy and vibrant for all of us."

Kilpatrick said the depot itself will house not only police administrative offices but public areas such as restaurants and community meeting rooms. The police headquarters is expected to require about 300,000 square feet of the 550,000-square-foot structure. The rest could house other city offices, the mayor said.

The mayor noted that one of the depot's four basements once served as a shooting range for railway police.

"The building's decay is substantial," Kilpatrick said, adding that it is "structurally sound." Still, the city could back out of the deal if it discovers extensive environmental or structural problems.

Under negotiation for the past year, the depot deal marks the latest of Kilpatrick's ambitious efforts to rebuild Detroit's physical landscape, especially in and around downtown. Among other high-profile efforts are the on-again, off-again deal to renovate the Book-Cadillac Hotel and the mayor's recently announced campaign to fund a new convention center to replace the aging Cobo Center.

"They're very complicated, very hard deals, but we must do them if we want to be a great city," Kilpatrick said.

If nothing else, the deal appears to be popular in southwest Detroit, the site of the depot. The neighborhood, while poor, is one of the city's fastest growing, with areas such as Corktown and Mexicantown adding new houses and shops.

Rose Martinez, who lives in southwest Detroit, was one of a few dozen people who stopped to listen in on Kilpatrick's news conference.

"It will take away another eyesore," Martinez said of renovating the depot. "We definitely want this."

Contact JOHN GALLAGHER at 313-222-5173 or [email protected] Contact M.L. ELRICK at 313-223-3327 or [email protected]

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