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Loan Board sides with EM in sale of Southwestern

By T. Kelly
The Michigan Citizen

DETROIT — The law is the law, but not always — especially when emergency management is involved, or so members of the elected Detroit Board of Education discovered Feb. 28 in a hearing before the state’s Emergency Loan Board on the future of the former Southwestern High school building, a Detroit public school.

Southwestern sits close to the new bridge, the New International Trade Crossing, planned by Gov Rick Snyder. It is to Snyder’s benefit to demolish Southwestern. With the school standing and in-use, environmental laws would require expensive scrubbers be installed on Snyder’s planned bridge project, board members say.

Ambassador Bridge owner Manuel “Matty” Moroun, who has fought a multi-million dollar campaign unsuccessfully to stop the NITC, submitted through a subsidiary an offer accepted by the elected board members.

Snyder’s appointee, DPS EM Jack Martin, wants to sell the 16-acre site to ProVisions LLC for $1.05 million. ProVisions, based in Bingham Farms, describes itself as “a leading real estate, economic development and advisory firm serving public and private sectors.”  The company plans to demolish the Southwestern High building.

DPS board members do not want to see the building demolished. They supported the $1.175 million offer from 6500 15 Mile Road LLC, — a Moroun company — because of the “community benefits” it offers, Detroit School Board President Lamar Lemmons said.

The proposal would use half the building for offices for another Moroun company, Crown Enterprises, and the other half of the school would be available for DPS use, adult education and job training. Our proposal represents the highest price and best use, Lemmons said.

ELB members expressed concern when the DPS board went out for bids to counter Martin’s plan, interested parties knew the amount of the ProVisions bid.

“That’s a loophole in the law,” Lemmons told them and asked them to do their duty. “The law is the law.”

Jean-Vierre Adams, general counsel for the EM, said ProVisions was at “a competitive disadvantage.” She said the EM had “marketed the property for over a year. Only after (the EM’s proposal) was submitted and the price made public did other parties appear. They clearly had an advantage.”

According to the EM law, PA 436, Section 19 mandates that the disposal of any asset of $50,000 value or more must come before the elected board. The EM must submit his proposal for the property to the elected body and they then have seven days to accept or reject the EM plan. If the elected body rejects the EM’s proposal, they have another 10 days to then counter offer with a proposal of equal or greater value. The ELB then must choose.

All of the district’s experts — lawyers, accountants, real estate specialists — are under the control of the EM and available to him, but not to the elected body. They have to devise counter proposals on their own while adhering strictly to the time constraints imposed by PA436.

“Under the EM process, Jack Martin has always said we had to follow the letter of the law,” Lemmons told the ELB. “He has closed other facilities much to our consternation and he has told us the law is the law. We have told him this is not the best you can get. We don’t have the expertise; they have all the employees. We have relationships in the community and know the community. We knew the offer (Jack Martin received) was neither the best offer, nor the best fit.”

Lemmons said the board’s efforts to keep Oakman Orthopedic School, the School for the Deaf, and other schools open failed because of Martin’s insistence on following the letter of the law.

Board member Elena Herrada said the district spent $5 million on a new roof for Southwestern within the last five years. Other improvements included a new auditorium and track. Herrada, who represents Southwest Detroit, said Western High is overcrowded since Southwestern closed.

She said the community organization, La Sed had written a letter of support for the board’s proposal because of the community benefits within the proposal.

“Stop destroying our community,” she told the ELB members.

One other bid was submitted to the board. Apple Financial LLC offered a plan to demolish the building.

Under the law, the ELB must choose between the two plans. The members questioned lawyers about whether they could delay making a decision, but were told the law required a decision within 30 days of the elected board’s presentation of its offer.

The ELB members approved EM Martin’s plan with the understanding he would go out for new bids to secure the “highest and best use.”

Lemmons expressed disbelief at the choice. It was a bid for less money and deemed less useful to the school’s neighborhood than the plan submitted by the elected board, he said.

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