A year later, $10M grant to help former Michigan GOP chair stuck in limbo

Schostak

Developers Schostak Brothers & Co. want to build residential and commercial buildings on more than 560 acres in Salem Township, off the Gotfredson Road exit of M-14 in eastern Washtenaw County. Legislators in late 2018 gave the township $10 million to help install water and sewer lines. (Bridge photo by Mike Wilkinson)

One year since top GOP leaders approved a $10 million  grant to help a former Republican state party official with a real-estate development, a new battle is emerging that could delay and possibly scuttle the project.

The grant, quietly pushed by former Senate Majority Leader Arlan Meekhof, was the second of two $10 million grants to help bring water and sewer lines to 1,400 acres of largely undeveloped land off M-14 in Salem Township in eastern Washtenaw County.

The biggest landholder in the area is Schostak Brothers and Co., which had been headed by Robert Schostak, a former state GOP chairman and prominent Republican donor. The Livonia-based real estate company is asking to build more than 550 homes in the area.

Bridge Magazine first broke news of the grant early last year and wrote several articles about the outrage it generated and efforts by Gov. Gretchen Whitmer and others to block the money. 

They all failed, but now, as Salem Township inches toward spending the grant money for the utility lines, officials in neighboring Superior Township are raising questions that could thwart the project.

The township has agreed to spend up to $50,000 on a legal and engineering review of the sewer line, which would run through the township as it heads to a wastewater facility in Ypsilanti.

Ken Schwartz, the township supervisor, has long been skeptical of the grants and said township officials are leery of the potential impact on the largely rural area.

Salem Township Supervisor Gary Whittaker said his township has made a formal request of Superior Township to use the right-of-way along Gotfredson Road for the sewer line.

“We’re just kind of in limbo right now,” Whittaker said. “We’re just waiting for Superior to decide what they want to do.”

Steve Fisher, president and CEO of the Schostak-Fisher Group, told Bridge through a spokesperson that the company is working with local leaders and engineers for a solution that "preserves the area’s unique rural character while meeting or exceeding every regulation and requirement and obtaining every permit."

"While our fourth-generation family business is disappointed by the present delay, we remain focused on and committed to providing a high-quality development project and place for families to call home," Fisher said. 

A company affiliated with former Michigan Republican Party Chairman Bobby Schostak stands to benefit from two $10 million grants to install water and sewer lines in eastern Washtenaw County. (Courtesy photo)

Should Superior Township have questions that slow the project, it could have a big impact on the use of state money, which was directed to the township for use in its “urban services district” that straddles M-14.

Kurt Weiss, a spokesman for the Department of Technology, Management and Budget, said the first $10 million – approved in 2017 – must be spent by the end of 2022. The second $10 million must be spent by 2023, Weiss said. If the money is not spent, “it would go back to the general fund.”

So far, Salem Township has spent just $1 million on engineering for the project, Whittaker said. All told, the project will cost an estimated $40 million and private developers –  not the township – would be required to pick up the balance.

Whittaker said state officials have offered assurances that the money would still be allocated if work has begun on the lines and the deadline passes.

Those guarantees, however, came from aides to former Gov. Rick Snyder, a Republican. His successor, Gretchen Whitmer, is a Democrat and temporarily blocked the grants last year.

The 2018 grant was part of a $113 million package of spending doled out during a lame-duck session, as part of a negotiations with Snyder to pass his own spending plans. The spending was decried as pork-barrel politics, as it included lawmakers’ pet projects for parks, roads and schools in their districts.  

Among other projects, lawmakers approved a $2.5 million grant to study the feasibility of launching rockets in northern Michigan.

And while the water line project that would help Schostak was located in Salem Township, local officials were adamant that they didn’t want the money.

Whittaker, the township supervisor, said he didn’t seek the grant, nor did local lawmakers. 

Meekhof, whose district was over 150 miles away from Salem Township, told Bridge last year that lawmakers “believe there’s economic development that needs to be done and that’s what government [is] good at –  building infrastructure.”

Salem Township has long identified the M-14 area for development –  but only if water and sewer lines are paid for by private developers. 

Another neighboring community, meanwhile, also has eyes on the grant money.

Kurt Heise, supervisor of Plymouth Township, said he’s talked with state officials and asked them to spend the money in his community cleaning up the site of the former Detroit House of Corrections.

Heise, who has been critical of the Salem Township project, said he doubts that all the parties can agree in time. If that’s the case, he said, it should be put to other uses.

“This is money they’re sitting on and they’re not going to get it spent,” he said.

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Comments

Kevin Grand
Thu, 01/09/2020 - 7:07am

Gosh, that's so sad that cronyism didn't pay off!

janet watz
Thu, 01/09/2020 - 8:30am

This whole thing smelled from the very beginning. The township doesn't want it, the $ were approved in lame duck, the R pushing it doesn't live there--sounds like another political favor. I hope Superior Township stalls long enough for the deadline to pass. I'm sure there are better ways for the millions to be spent!

Charles Buck
Thu, 01/09/2020 - 8:30am

Michigan has lake shore homes toppling into Lake Michigan because no governmental entity, local or state, is willing to help by spending a single dime on shoreline erosion protection measures, yet the state with one of the slowest population growth rates is billowing forth cash grants for private residential developments for the politically well connected. It's absolutely outrageous. Whoever is behind this Salem Township scandal should have their driver's license gender identity changed to "C" for crook and be deported to Ohio. Salem Township's general fund unrestricted fund balance boasts over $11 million in untapped reserves. They could take in zero revenue and still operate at current expenditure levels for over four years, according to their 2019 financial statements. Yet they have their hand out to the state for development grants? Unbelievable!
https://treas-secure.state.mi.us/LAFDocSearch/tl41R01.aspx?&lu_id=5279&d...

Lynne M
Mon, 02/10/2020 - 12:34pm

Please read the article more carefully. Salem Township did not seek the grant. We do not want the property developed. If someone wants to develop it, it is their responsibility to pay for the improvements. This was clearly done as a favor to a political croney, not even a Salem Township resident.

David Hogberg
Thu, 01/09/2020 - 9:49am

Just so stinky!

David Waymire
Thu, 01/09/2020 - 10:37am

I once saw Arlan Meekhof asked why he supported massive cuts to the discretionary part of revenue sharing (which goes to existing cities, which need infrastructure far more than this project)...His response "It's called discretionary revenue sharing. We used our discretion." In other words...he didn't care about the health of cities. And that's a major reason why our state isn't growing.

James tomlinson
Thu, 01/09/2020 - 10:50am

Gop always for sale

Ray Kuzmin
Thu, 01/09/2020 - 10:53am

Yep the whole thing smells of 'lame duck sewerage'! And now that Kurt speaks of the 'old' Department of Corrections Facility that was abandon and torn down, one has to wonder why it couldn't have been continued to be used replacing other (a lot) older facilities that DOC presently in use? The Plymouth Facility really wasn't that old! And don't let anyone tell you that there isn't a 'good old boy system' within DOC! They are very protective of their turf and budget!

Jeffrey C Grey
Thu, 01/09/2020 - 11:12am

Is this Publication an unbiased attempt at the Truth ? I find the adjectives, camouflaged innuendo and lack of the other side's points, found in many of your stories, align with the current Left of Center major media. I know your effort to be unbiased is commendable, and I know we all have personal biases. Your collegiate professors may be to blame. I know mine are; for my right of center views, as will as having successfully worked in the competitive field of Marketing and Sales my entire life. You may want a think tank of retired business types that can comment on the fairness of everything "Non-Government". Which of course is were all of America's (and Michigan's) wealth is generated. Keep up your good efforts, but watch the Spin from your younger disadvantaged "Wisdom-wise" writers.
Kind regards,
JCG

Bones
Thu, 01/09/2020 - 12:05pm

Defering to free market think tank is why this country is dissolving, but please, wealthy old person who's out of touch with reality, tell us more about how graft is good and how we should be subservient to the likes of the Mackinac Policy Center

middle of the mit
Fri, 01/10/2020 - 4:04am

This publication YOU are going to tell us is biased? The same publication that posts commentary from the AEI, Heritage Foundation and the Mackinaw Center for Public Destruction?

Where do you get your information from? Faux news?

I will ask you one simple question. The same question I ask everyother conservative on this site. Where do you live?

If you live a taxhole city instead of the rural countryside that everyother conservative lives in....YOU are a hypocrite.

YOU won't move to a lower tax area. Why?

I can tell you why. You won't like it, but it is literally why people from my area graduate and leave.

Jobs and pay.

They don't exist in Republican areas.

There are jobs here. And there is good pay here. But there isn't much of a career. Just scroll down the thread a little a while and you will find out what I am saying is true.

What is happening in the big cities is starting to happen right here in OUR backyard. And WE aren't willing to pay people enough to live where their services are needed.

And it is all because people of your "stature" think that those that "serve them" are below them, that they don't or shouldn't have to pay lessor humans to do the "dirty work" that NEEDS TO BE DONE but NO ONE wants to do. But how does it get it done if there are no workers to do it?

Guess what?

Michigan is about to have it's own serious problem with homelessness....if it doesn't already.

And guess what?

I hope you have read your Bible.

Because what you do the least of these....YOU do to HIM!

Make no mistakes, and those are NOT my words.

But hey........you just worry about your portfolio.....that IS YOUR GOD...ISN'T IT? (Mammon)

Can you see the wisdom in those words that came from the Bible?

And where is all of Americas and Michigan's wealth generated from?

I thought Biznizz needed CONSUMERS TO PURCHASE THEIR PRODUCT TO GENERATE WEALTH FOR THEMSELVES.

sTOOOPID ME!

Billionaires will purchase their products from other Billionaires and ALL will BE GOOD!

Is that why Bill Ford and Mary Bara aren't visiting EVERYTOWN MI every month of the year? As opposed to the employees that used to visit EVERYTOWN IN NORTHERN MI?

At some point in time...YOU are going to have to accept the BS that you have spewing...................is BS!

Why? Because someone like me is going to tell ya what you are spewing...................is BS!

Why?

That is what I do!

Arjay
Thu, 01/09/2020 - 11:42am

Developers should pay for needed infrastructure. if it costs $40 million to bring water and sewer to 550 new homes, then the developer can add that to the price of the new homes. If others want to benefit from the infrastructure, then they can pay a proportionate share to the developer. Government should not be in the business of taking money from taxpayers and giving it to private developers, even if it means more money will be returned to the government entity. Have you ever seen taxes go down just because the government has more income? Of course not. They just think up new ways to spend more money.

TW
Thu, 01/09/2020 - 5:33pm

The articles always cite around 550 homes but if you look at the full plans for the area it's closer to 1,000 along with big box store, restaurants, shopping, and other businesses. This is because they broke it into 2 separate developments and only talk of one when its convenient. They keep downplaying the size and scope to get things passed. Get one passed and then "spring" the second on people afterwards and claim it was always planned. In reality its bigger than people realize and the impact to the surrounding areas would be significant.