When Wayne State University broke ground on the $50 million Mike Ilitch School of Business on Wednesday, school officials and the media left out some key details about the burden on taxpayers and students.
More than six months after the university’s Board of Governors approved the construction project without details of the agreement,WSU President Roy Wilson asked the board to pitch in an additional $9 million for the “gift.” The board agreed, and one month later it approved a tuition increase of 4.1%, citing money problems.
Top university officials declined to discuss why the $9 million payment was necessary after approving the “gift agreement” with Ilitch, who is a billionaire and beneficiary of hundreds of millions of tax dollars for his projects.
WSU officials also declined to release a copy of the “gift agreement,” which outlines the university’s financial obligations over the building.
It’s a win-win for Ilitch, who is building a Red Wings arena next to the new school using more than $250 million in tax dollars. The $40 million donation allows Ilitch to write off the gift on his taxes, and it gives his company, Olympia Entertainment, the opportunity to say it is closer to reaching its goal of spurring development around the arena. Never mind that the property won’t be taxed like many of the buildings Ilitch operates in Detroit.
After university officials declined to release a copy of the “gift agreement,” which impacts taxpayers, Motor City Muckraker on Wednesday sent a Freedom of Information Act request to WSU President Wilson, Vice President and Chief of Staff Michael Wright and General Counsel Louis Lessem.
Soon after, Wayne State responded by saying it would need a 10-day extension – a move that keeps the agreement out of the public’s hands, at least for now.
Gift agreements are public records because they spell out the responsibilities of taxpayers and the university.
When the Ilitch deal was initially approved, at least one board member, Dana Thompson, abstained because she wasn’t given enough time to review the plan.
“As a former commercial real estate attorney who practiced at Morrison & Foerster in California, one of the largest law firms in the nation, I don’t approve deals that I don’t have ample time to review,” Thompson wrote in response to our questions on the day of the groundbreaking. “My goal as a member of this Board is to ask questions to ensure that the project completes on time and on budget and that we’re not in for any additional surprises like the $9 million we just approved in May.”
Wayne State has a history of declining to release public information and often has an adversarial relationship with the media.
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Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.