Q&A with Mayor Deirdre Waterman: Pontiac's Phoenix Center, and possibly the city itself, is at risk

For all the small businesses that have opened in its downtown core, and the larger employers that have moved within city limits these past several years, the City of Pontiac is at a crossroads.

In 2016, after three emergency managers and seven years of state oversight, the city was finally back under the control of its elected mayor and city council.

Now, Mayor Deirdre Waterman, first elected in 2014, is saying that Pontiac is faced with one of its most important decisions yet.

The Phoenix Center, a decades-old parking garage that serves the neighboring Ottawa Towers with a now-shuttered amphitheater on top, is at the center of a settlement that could plunge the city into bankruptcy — or lead to a renewed interest in downtown development.

It all depends on how the city manages to find the nearly $20 million necessary to cover the repairs needed to bring the Phoenix Center up to code and cover a settlement owed to the owners of the Ottawa Towers. And all this by Nov. 1, 2020, no less.

The mayor recently released a FAQ for citizens that delves into the details of the deal, and why it’s important that they get involved. We sat down with Mayor Waterman, via Zoom, and asked her all about it.

On how this all started:

During the economic crisis, we didn’t have the money to maintain the building. Some parts have been deemed unsafe.

The emergency manager at the time said to demolish the garage, an $8 million tab. But there was a conundrum. The Ottawa Towers owners, its investors, said, "No, I’m entitled to have parking. You can’t demolish the garage or I will sue." They then launched the first of many lawsuits to prevent or forestall demolition. The emergency manager then said if they sue, we’ll condemn the building. And then I entered the picture.

The crux of all this is that the emergency manager didn’t realize that when the original documents were signed with GM (the original owners of the towers), the owners of Ottawa Towers have perpetual easement rights to park in the garage. It took Pontiac a number of years to unravel all this.

What led to the settlement:

We have new developments. We’re eliminating blight. There’s a lot going on to rebuild the city and its morale. But we’ve already lost the Silverdome and people have fond memories of attending events at this amphitheater.

The judge allowed the mediation because I was never part of one. And we were fortunate that the mediator was Judge Steven Rhodes, the judge that oversaw Detroit’s bankruptcy. He said, in essence, that it wasn’t looking good for the city but we’ll do the best we can, that we don’t want to turn back the progress we’ve made in Pontiac.

It took close to two years but we came out with saving the Phoenix Center, saving it as a mascot for the city.

Why the current solution isn’t viable:

Council passed a resolution to take $7 million from our rainy day fund for construction but the financial advisor said that it would be harmful to the city in the long run, that $7 million is not enough to cover the settlement.

There’s been a lot of political wrangling. But we need to alert citizens what is at risk here. As time ticks down, costs increase. Since the original agreement under the emergency manager in 2012, costs have gone up.

I didn’t want to veto the $7 million because I want to give the council a chance to come to financing the project. But the financial advisor will tell them $7 million isn’t good enough, that defaulting on the settlement will change the rating of the city and challenge our ability for future bonds.

What to do next:

It’s easy to get caught up in politics but we have to move on this. Council has to make a wise decision. A judgment against us could amount to something that every citizen and business owner would have to pay. The economic peril could be upwards of $30 million. For taxpayers, that could be $800 to $1,500 per person and a judgment levied could force us to have to pay that in one year. The $7 million from the council is just a stop-gap.

The upside is that the city can pull this off. This is the key to opening downtown to development.

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Read more articles by MJ Galbraith.

MJ Galbraith is a writer and musician living in Detroit. Follow him on Twitter @mikegalbraith.