A design rendering from a presentation about Warren’s proposed downtown development was included on the cover of the city’s 2022 calendar, mailed to residents in January. Council members blasted the administration’s choice to use the image, which features a Mercedes Benz, as an affront to General Motors Co., the city’s largest corporate taxpayer.

A design rendering from a presentation about Warren’s proposed downtown development was included on the cover of the city’s 2022 calendar, mailed to residents in January. Council members blasted the administration’s choice to use the image, which features a Mercedes Benz, as an affront to General Motors Co., the city’s largest corporate taxpayer.

Image from 2022 Warren City Calendar

Debate about Warren downtown plan boils over

Council rejects funding model, mayor vetoes action, plan’s future uncertain

By: Brian Louwers | Warren Weekly | Published January 17, 2022


“There’s no free lunch here. The downtown is a nice image, but it fails when it comes to financing.”

Pat Green, Warren City Council President

WARREN — Citing a lack of “public purpose,” the absence of key development details and the potential risk to the city in a changing commercial landscape, the Warren City Council has rejected the funding mechanism for the administration’s proposed downtown plan.

The action was later met with a veto from Warren Mayor Jim Fouts, who said “the decision was based upon a misleading and false narrative about taxpayer cost and taxpayer preference.”

On Jan. 11, Council President Pat Green, Council Secretary Mindy Moore, Councilman Jonathan Lafferty and Councilman Garry Watts voted to approve a resolution, put forth by Green, opposing what the item labeled a “$30 million subsidy” of a proposed “luxury hotel, high-end apartments and retail center.” Councilwoman Angela Rogensues and Councilman Rob Papandrea voted against Green’s resolution. The mayor’s veto was filed three days later. 

The back and forth came six months after the latest plan was presented to council members. The concept called for an initial investment of $30 million in gap funding, generated through the sale of bonds, to be repaid with business taxes captured in Warren’s Downtown Development Authority district and, if approved, transitional brownfield redevelopment credits through the Michigan Economic Development Corp. The investment, developers and administration officials said, would leverage up to $140 million in private development that would transform vacant city-owned land in the Civic Center, along Van Dyke Avenue north of 12 Mile Road, into an active “downtown” area with a grocery store and other commercial spaces, hundreds of residential units and a Marriott hotel.

Proponents said the result would be a $250 million boon for the local economy that would come at no cost to Warren’s residential taxpayers and would generate hundreds of commercial and construction jobs. Fouts and members of his administration said council members would be asked to approve the plan at various stages going forward. 

But in discussing his resolution, Green said the funding model put forth by the administration was impossible to approve, even as a starting point.

“Having met with many of you over the years, the one thing I can tell you is the residents are not interested in funding corporate America,” Green said. “We’ve done that enough. It’s as simple as this: Tax dollars are to be spent on a public purpose. When you pay city taxes, you have an expectation that those tax dollars will be spent in a manner to benefit the general public. In this proposed downtown, these are public dollars being gifted solely to a private entity.

“There’s no free lunch here,” Green added. “The downtown is a nice image, but it fails when it comes to financing.”

Moore said the council majority had been clear about its concerns regarding the financing and said those concerns went unaddressed by the administration. She said a lack of details in the form of a development agreement could put the city at risk at a time when the real estate landscape has changed since the plan was created, and as it continues to be reshaped by the pandemic. 

“I see so many things wrong with this. I want to know what the value of this property is before we start giving it away,” Moore said. 

She said former Mayor Mark Steenbergh and his administration floated the construction of a parking structure and other infrastructure improvements as an incentive for developers when they sought “a second chance” for downtown Warren in the early 2000s. Moore served on the council at the time. She said giving the property to developers while the council still has many questions about the development agreement was too much of a gamble. 

“This is not a loan. This is like putting $20 in a slot machine,” Moore said. “That ain’t a loan, and this is not either. If that hotel or any of the businesses, if that hotel goes out of business, what happens? We have an empty shell of a building, and who’s going to take it over? They’ve already said that once it’s built it will not be worth what they’ve put into it. That’s a red flag for me right out of the chute.”

She added that she has been in favor of a downtown for a long time. 

“I’m not in favor of this model,” Moore said. “I certainly indicated that I think we should send it back. Do a better job. Understand what this community is. The analysis that was done about the retail and the market and all that was done in 2015 and 2016. Man, has the world changed since then. It’s changed since a year ago, and I have no idea what it’s going to look like a year from now. 

“We’re not going to know how things settle out for a couple of years, and this, to me, is just a crapshoot,” Moore said. 

Rogensues took issue with the placement of her requested item seeking approval of the development and financing plan well beneath Green’s item on the agenda. Before the vote on Green’s resolution was taken, Council member Eddie Kabacinski addressed its placement and left the meeting in apparent protest. Thus, he did not vote on the item.

In her comments before the vote on Green’s resolution, Rogensues said her item was submitted “well ahead of time” and that it was “purposely put at the very bottom of the agenda.” Green’s item, she said, was “put at the forefront, which is gutting the financing of the project from the get-go.”

“What I think my colleagues are doing here is circumventing any cooperation with the administration to present a plan that captures constituent input, council’s input, subject matter experts and all those that have a vested interest in this project by attacking the one thing in the project that potentially garners folks the most political favor, which is the financing of the project,” Rogensues said. 

She added that the concerns presented were “not even fully factual,” and that the council majority simply sought a “loophole” to justify denying it for “purely political reasons” rather than work with the administration. 

“If they truly cared about you, they would have worked as hard as possible the past six months to actually produce a plan that both sides would be happy about,” Rogensues said. “Instead, I had to push to even get this item on the agenda, and when I was finally successful in doing so, they sought a loophole to not fully vote on the project and, rather, present this resolution, which isn’t cooperative or collaborative, to bring this project to life. It’s just purely a tactic.”

While she agreed that the financing is not a loan and said she is not always in favor of “public financing for private enterprise,” she questioned how her colleagues could routinely support tax abatements as incentives but not the use of captured business tax dollars to repay bonds sold to fund the initial $30 million investment by the city. 

“We have to collect property taxes to pay back the bonds that are issued out,” Rogensues said. “The unfortunate circumstance is this is how projects of this scale are funded in the United States.”

Papandrea said his colleagues had long sought an updated master plan and in the past supported a downtown development originally envisioned in the 1960s by the city founders. He accused them of ignoring the expertise brought by the “world class” development team, including Robert Gibbs, founder and director of Gibbs Planning Group; developer David Flaherty, CEO and principal of Flaherty & Collins Properties; and David Ong, of Acquest Realty Advisors, Inc., and Acquest Development. 

The proposed plan called for a 210-room Marriott “Tribute” hotel with a 5,000-square-foot ballroom and a reflecting pool, a restaurant with outdoor dining and a rooftop terrace with a bar overlooking the Civic Center. The commercial development included 60,000 square feet of space with 20-25 retail units, including a grocery store, and an initial phase of one-, two- and three-bedroom residential units, with rent ranging from $1,100 to $2,500 a month. 

“Must Warren be a second-class city, with second-class development? Is Warren less worthy than Royal Oak, Birmingham or Detroit? Visionary leaders in Warren have planned for decades a first-class downtown development to be a destination attraction for the Detroit metro area,” Papandrea said. “We now have a plan created by a world-class planner, Robert Gibbs, yet the majority of City Council would rather plan politics with this issue than push this city forward into the future.”

Lafferty said absent further details specified in a development agreement, the city and its taxpayers would be left to shoulder the risk if the developer were to “cut and run when the going gets tough.”

“This council votes on items that are both measurable and actionable. The mayor’s plan, and Ms. Rogensues’ resolution contains neither, which is why it was tabled in the first place,” Lafferty said. 

He said Fouts and his administration brought the plan to the council for approval after it was crafted and asked them to “take it or leave it.”

Do I support the concept of a downtown? Yes,” Lafferty said. “Is this the one and only plan we will ever consider? No. Do I welcome another plan and do I want to be involved in its creation? Absolutely,” Lafferty said. 

“Maybe the development of the downtown is entirely up to the mayor, but he can continue to use his rhetoric, or he can bring this council to the table from the beginning to develop a real downtown plan in partnership that meets the needs and desires of a world-class city that Warren can absolutely be, and I think we can all agree on that,” Lafferty said. 

Before the vote, Watts said he, too, would support the right project, one the residents want. However, he said the plan as presented isn’t it. He said investment is needed for developments elsewhere in the city, and for services residents need. 

“I’m not going to be part of it. I’m not going to approve any money for a project, not any taxpayer money, for sure on the DDA,” Watts said. 

He added, “There’s a lot of problems here and the mayor refuses to meet with anybody and to make any changes to this program. It’s on the mayor if this doesn’t go through at some point, because I want some kind of walkable downtown. I would like some kind of shopping area. I would like to have some business.

“I’m going to watch out for the taxpayers’ dollars. That’s what I was elected for, and I’m going to guard those tax dollars,” Watts said.

In his veto, Fouts said the proposed public-private partnership would generate a projected $2.5 million in new tax revenue for Warren. More jobs, a walkable downtown and more choices for Warren residents who now leave the city for shopping, dining and entertainment were listed among the benefits. He said the development would also inspire investments elsewhere in the city.

“With interest rates scheduled to go up early this year and with the increasing cost of construction, it is doubtful whether this project will be viable unless at least one council member decides to reconsider their negative action and vote in favor of the people of Warren,” Fouts said. 

“A majority of our citizens have wanted a local downtown for several decades. It was the will of the people that gave rise to the development plans created through the Downtown Development Authority,” Fouts added. “Every previous mayor and previous council majority has supported this concept except for the current council majority.”