INTRO: Earlier this month, the Michigan Land Bank Fast Track Authority board voted to sell the former state fair grounds to three businessmen. Marvin Beatty of northwest Detroit, Joel Ferguson of Lansing and Magic Johnson. But some people are critical of the design and the sale price of the deal. Michigan Now’s Chris McCarus reports.
Joel Ferguson is 75. He’s won state-wide elections to the Michigan State University Board of Trustees. He’s the chairman. Magic Johnson is 20 years younger. They met when Magic was a boy and later Ferguson taught him about business.
A year ago, I asked Ferguson about his team’s plan for the 157 acre state fairgrounds. It lies unused at 8 Mile and Woodward.
“When you see it you will be able to have a good interview with me. We’ll give you to Magic. Let me give you a brochure.”
Magic has attended no public meetings. His mentor Joel Ferguson has attended one. The Michigan Land Bank has sold them the land. Critics don’t like the group’s design. They call it cookie cutter: big box stores and parking lots.
“When the developers develop that area how long will it take for the novelty to wear off?”
Magic Johnson has owned 32 Burger Kings. Lisa Franklin hopes he doesn’t own his 33rd at the state fair.
“In ten years some of the same strip malls that we’ve seen…what do they look like now?”
Franklin is the only Detroiter on the Regional Transit Authority board. The only 1 of 10. The state created the RTA and the Land Bank. She says the Land Bank should give part of the fairgrounds to the RTA so it could develop the land. Franklin fears Magic Johnson’s group will flip it. Just sell it back to the state for a profit later on.
“Let the RTA get an investor. Let an investor pay the RTA and we can use that money to pay for operating expenses until we get the ballot initiative or whatever they decide to do.”
The developers aren’t promoting the car-oriented design as much now. That makes Frank Hammer feel a bit better. He is a member of the State Fair Grounds Advisory committee. The law that allowed for the state fair to be sold also required the committee to be created. They give advice but don’t control what happens
“The ideas that came from the community which were walkable streets and transit oriented development. They have adopted the vocabulary of the things that the community is proposing. They have never given us anything back that reflects they’ve incorporated those suggestions.”
In May, University of Detroit Mercy brought in speakers from around the country. They were asked how do you get voters willing to pay for buses and trains? Denny Zane did that in Los Angeles. Zane says it’s smart to own land where you put your stations.
“It’s an opportunity to build a community base around the station area. So how you develop it is very important. The new model of mixed used higher density including housing as well as commercial uses for example is a crucial part of that kind of success.”
Los Angeles and other cities have gained profits alongside private developers. Frank Hammer has been worried Michigan taxpayers will get jipped.
“The purchase price? There was no purchase price.”
Municipalities often sell empty schools or other properties for $1 when they think the developer has deep enough pockets to finish the job. The Gateway project is the new big box store complex at 8 Mile and Woodward. Right next to the fairgrounds. Meijer Corporation got free land. So Joel Ferguson’s July 2012 proposal to the Land Bank reads that Magic Plus LLC should too. It reads:
“In determining the purchase price of the Michigan State Fair property, the best example of value is the Gateway project. Meijer would be provided 20 acres at no cost to Meijer.”
Another part of the proposal says that the state would receive 1% of the revenue from the sale or lease of the fairgrounds. Frank Hammer and the advisory committee kept hearing that for a year. So Hammer imagined:
“$1 million dollars of revenue. 1% of that and that would be $10,000. Not very much. The state would not be making out very well.”
I reported that the Land Bank had “been considering giving away the property for a dollar.” That was October 1. I was wrong. Frank Hammer and the advisory committee were also surprised.
“The Land Bank Authority had a meeting on October 2. That’s the first time it officially came out that all of a sudden we’re talking about $4.65 million.”
Land Bank spokesman Mario Morrow confirmed that by email. “No discussions were made public during negotiations. That is not ethical.”
No discussions were made public. The state didn’t name a dollar figure nor did Magic Plus LLC. Joel Ferguson’s staff asked me to call him. Ferguson swore at me and said:
“I owned two tv stations. And you’re exactly the kind of reporter I would have fired first.”
The next day he had a Lansing PR firm call to try to change my story. State officials wanted my story changed too. Mario Morrow speaks for both the Land Bank and the Regional Transit Authority. Morrow says the RTA is unprepared to get into the real estate business. Kim Homan is the Land Bank’s Executive Director. She said the Ferguson Magic group is likely to pay $7 million spread out over 11 years. The less likely option would be to pay $4.65 million by 2015.
Other state officials are more sympathetic to transit and community input. They say Magic Plus LLC will have to listen to the grass roots a lot more. And if they don’t then the state will take back the property.