November 12, 2013 / 9:51 PM / 4 years ago

Michigan board approves 30-year Belle Isle lease

LANSING, Mich., Nov 12 (Reuters) - A Michigan emergency loan board on Tuesday approved a plan for the state of Michigan to lease Belle Isle park from Detroit for 30 years, with possible extensions up to 60 years, rejecting a competing plan from Detroit’s city council that would have limited the initial lease period to 10 years.

The three-member panel, which was appointed by Michigan Governor Rick Snyder, unanimously approved the lease, which is for 30 years with two optional 15-year renewals. The state also has said it will spend up to $20 million to improve facilities on the island park in the Detroit River in the first 18 to 36 months of its management, which will begin in 90 days.

Michigan Governor Rick Snyder, Detroit Emergency Manager Kevyn Orr and other state officials signed the agreement last month over objections from the Detroit City Council, which had proposed a lease of 10 years, with two 10-year renewals.

The state said it hopes to finance the improvements through grants, bonds and private donations, and the longer lease will be helpful in seeking funding for the upgrades to the island’s public facilities, it said.

“One of the key terms involved with this was the financing terms and the time involved as was stated,” said Bill Nowling, Orr’s spokesman. “We think that 30 years is important to get all the financing in place so that we can get the improvements in place over time. Ten years is just too short of a time to do that.”

Leasing the island to the state has been a priority of Orr’s since he was appointed in March. Snyder had put forward a similar plan in January, but the governor pulled it from consideration after Detroit’s city council could not bring the measure to a vote.

The state’s emergency manager law required the city council to approve the lease agreed to by Orr or propose an alternative that would have saved the city the same amount or more.

Detroit City Councilman James Tate attended Tuesday’s meeting and told reporters he was “not terribly surprised” that the city’s alternative lease plan was rejected.

Tate said the council would engage with the state and the emergency manager to ensure that the agreement addresses some of the council’s concerns, including the request for a guarantee that funding for the island is in place prior to turning over operation of the island to the state.

“When the deal is done you can’t walk out with your head to the ground,” Tate said. “Now you have to make sure that whatever was approved, it works. It’s about accountability at this point.”

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