The Megasite is used to reward political allies reports the detroit news

Whitmer appointee scores business windfall through governor's jobs strategyBeth LeBlancCraig Mauger
The Detroit News

View CommentsMarshall — A businessman whom Gov. Gretchen Whitmer tapped to develop a plan for Michigan’s future has already secured a victory for his family-owned company through the governor's current job-creation strategy, using his connections to win a no-bid $178 million contract to prep a factory site in the Marshall area.
The taxpayer money for construction giant Walbridge, whose board chairman is John Rakolta Jr., moved through the Democratic-led Legislature in March as staff at the Michigan Economic Development Corporation provided updates via text messages to the influential businessman, according to records obtained by The Detroit News.
A Detroit News investigation found the money for Walbridge's site preparation for a Ford Motor Co. electric vehicle battery plant flowed through unconventional channels that avoided additional levels of oversight normally required for taxpayer-subsidized economic development projects.
In mid-February, Rakolta had sought assurances from at least one Republican lawmaker that the money would move quickly through the Legislature — an effort that seemed to backfire when Republicans instead tried to strip Walbridge’s money out of the budget.
"They land the deal, announce it, then come and bully us into passing it," said House Republican Leader Matt Hall, R-Richland Township.
Hall said Rakolta asked him on Feb. 16 to vote for the funding for the Marshall site.

"I’m not going to be pushed around by those types of calls," Hall said of the Rakolta's lobbying. "For me, it was about looking at what other states paid for these deals and trying to bring Michigan around to what other states did.”

About three months after the Democratic-led Legislature pushed through the March spending plan that funded Walbridge's $178 million site preparation contract, Whitmer appointed Rakolta to lead the state's new Growing Michigan Together Council. Whitmer's executive order tasked Rakolta and others on the commission with developing recommendations on population growth, education, infrastructure and “comprehensive economic development strategies."
Walbridge, a Detroit-based industrial construction firm, would not answer any questions about Rakolta's involvement in securing the money for Ford's Marshall battery project and would not say why neither Walbridge nor Rakolta are registered to lobby lawmakers.

But Walbridge spokesman Eric Dresden said Rakolta is a "longtime advocate for Detroit and the state of Michigan."
"His appointment as co-chair of the Growing Michigan Together Council reflects the recognition of his dedication to making Michigan a state where families want to work, live, and build their lives," Dresden said.
Rakolta, a Republican donor, was the longtime CEO of his family-owned Walbridge before serving as former President Donald Trump's ambassador to the United Arab Emirates from 2019 to 2021. Walbridge publicly disclosed $2.2 billion in revenues in 2020, the most recent year available. After his ambassadorship, Rakolta resumed serving as chairman of the company's board of directors.
In a statement, Whitmer spokesman Bobby Leddy said Rakolta is "widely respected by both Democrats and Republicans in Michigan," and has the expertise needed for a commission focused on Michigan's population woes and economic future.

"… The governor has full confidence that he is the right choice to co-lead this council," Leddy said.

Incentives and then someOn Feb. 13, Ford announced that it planned to invest about $3.5 billion in an electric vehicle battery plant park in Marshall. As part of the deal, Ford pocketed about $210 million in direct tax incentives plus a 15-year property tax abatement worth about $775 million over the life of the tax break.
Walbridge, a longtime Ford contractor, announced on its website that it would be building the factory for Ford. But the page contained no information about site preparation in Marshall.
A little more than a week later, Michigan Economic Development Corporation CEO Quentin Messer Jr. and Ford’s government affairs chief, Christopher Smith, came before House Appropriations to ask for another $750 million, this time arguing that the money would be used solely for site preparation in Marshall.

Documentation given to some lawmakers at the Feb. 22 meeting and marked “subject to NDA (non-disclosure agreement)” included a breakdown of where the $750 million would go, including about $294 million for “pad ready site improvements” and listing “MAEDA/Walbridge” as the contracting entities.

Messer referred to the document during his testimony.
"What we have before you, not a dime will go to Ford," Messer told lawmakers. "This will go to making sure the infrastructure is secure as you asked.”

At the time, Messer referred to the funding as “SSRP,” or part of the Strategic Site Readiness Program, which largely requires approvals by the full chambers, then a Michigan Strategic Fund board vote, and lastly, a final approval of a transfer of the funds by the House and Senate appropriations committees.

Instead, a week later, only $120 million of the $750 million requested would be routed through SSRP in a supplemental spending bill that went before the House and Senate. The other $630 million was inserted as direct appropriations, avoiding the many-layered approval process required if it were distributed through the Strategic Site Readiness Program.

About $330 million was appropriated to the Michigan Department of Transportation to rebuild and expand roadways near the Marshall development and $299 million was earmarked for “land acquisition and predevelopment site work” for a megasite in Marshall.
To date, the $299 million earmark marks "the largest direct appropriation the MEDC has administered," said Otie McKinley, a spokesman for the agency.
The bill containing the funding was sponsored by House Appropriations Chairwoman Angela Witwer, D-Delta Township. It's not unusual for budget chairs to sponsor most appropriations bills.
Money moves to Marshall agencyAfter the budget’s signing on March 8, the Michigan Economic Development Corporation would move within about two weeks to shuttle the first $185 million installment of cash to the Marshall Area Economic Development Alliance, according to Treasury records obtained through a public records request.
A second large chunk of $75 million was distributed in August. In all, since the start of the year, the Marshall Area Economic Development Alliance has been allocated roughly $418 million, including a $120.3 million allocation approved earlier this month.
The Marshall group said it contracted with Walbridge for site prep because of the company's partnership with Ford for the building of the eventual factory. Ford initially told The News it was not involved in site preparation, then, a day later, said it had introduced Walbridge to the Marshall Area Economic Development Alliance.
"We introduced Walbridge to the MAEDA team and strongly endorsed their involvement in this project, given they have been a construction supplier to Ford for 105 years — and they have expertise on a number of EV projects — including some with Ford in other states," said Emma Bergg, a spokeswoman for Ford.
The Marshall Area Economic Development Alliance would not release its contract with Walbridge, but said it pays Walbridge as invoices are submitted for work and, as of late August, it had paid the company $74 million of the $178 million the contract is expected to cost.
Besides the Walbridge funding, MAEDA has another $241 million that it will spend on design, permitting and infrastructure benefiting site preparation and construction at the Marshall site.
The $418 million in taxpayer money allocated to MAEDA so far this year is a drastic increase from the money the agency usually handles. For the year period ending June 2022, the organization reported $1.5 million in revenue and $1.4 million in expenses.
Because MAEDA is a nonprofit, normal disclosure policies that cover government agencies don't apply.
'Do we still need the House?'Before lawmakers had even composed a budget bill for the site prep funding, Hall, the House Republican leader, said he received a call from Rakolta asking him to expedite the funding.
Hall, who previously represented Marshall and signed a non-disclosure agreement to be part of conversations surrounding the megasite, said he had voiced concerns to Whitmer's office and MEDC staff about the amount of taxpayer funding being requested for site preparation, particularly when it came to the money set aside for Walbridge. He wanted the MEDC to go back to the bargaining table with Ford to haggle over a lower site prep dollar amount.
But Hall said state officials ultimately refused to renegotiate, for reasons he believed had to do with the risk of losing the project in a repeat of Michigan’s 2021 loss of Ford EV and battery plants in Kentucky and Tennessee, where Walbridge is constructing a multi-billion-dollar EV and battery manufacturing complex for Ford.
“There wasn’t even a bill before the Legislature yet, and Rakolta called and wanted me to move faster to approve the deal,” Hall said. “... He certainly had a lot of inside information about the conversations I was having with the governor.”
Neither Walbridge nor Rakolta are registered to lobby in Lansing, according to state records.
A person is required by state law to register as a lobbyist agent if they are compensated more than $725 a year to lobby public officials on behalf of a client or employer. A company or organization is considered a lobbyist if it spends more than $2,900 a year on lobbying public officials, or $725 in a year lobbying a single public official. Large Michigan corporations with business before the Legislature generally register with the Secretary of State's office to lobby.
State records show the Michigan Economic Development Corporation was aware of Walbridge's eventual role in the Ford project, and was also in communication with Rakolta as the site prep money moved through the Legislature.
When Messer presented to lawmakers on Feb. 22, he did so with a document summarizing the funding in front of him listing MAEDA/Walbridge as a recipient of the site prep funding. The document, which said it was subject to a non-disclosure agreement, is visible in House video recordings of the meeting and was distributed to some members of House Appropriations. The News obtained a copy of the document.
And Terri Fitzpatrick, the MEDC's executive vice president and chief real estate and global attraction officer, communicated with Rakolta via text message as the money moved through the Senate and House, according to documents obtained by The News through a public records request.
On Feb. 28, as a spending bill containing the funding moved to the Senate, Fitzpatrick texted Rakolta a screenshot of a news article indicating the bill would be voted on shortly.
"Do we still need the House?" Rakolta replied.
Fitzpatrick responded in the affirmative, then sent two other screenshots a couple of hours later of an article indicating the money had passed and the Senate vote board showing which senators had voted for and against the bill.
"We hear it passed both chambers with immediate effect just now," Fitzpatrick wrote later. "Will get update in the morning."
GOP tries to block moneyHouse and Senate Republicans, who are in the minority, attempted during the Feb. 28 and March 1 vote on the funding to block key provisions in the bill that would benefit Walbridge.
Amendments from Rep. Tom Kuhn, R-Troy, and Sen. Mark Huizenga, R-Walker, would have stripped the $299 million site prep allocation from the budget. Another from Rep. Donni Steele, R-Lake Orion, would have required all existing contracts on the project be rebid to determine whether the work could be done at a lower price.
The amendments were rejected by the Democratic majorities. In Lansing, it's rare for the majority party to accept amendments from the minority party.
Huizenga, in remarks on the Senate floor, indicated he believed the money would be better spent on state and local road infrastructure; his amendment would have redirected funding to city, village and county roads. Kuhn said leadership recommended he introduce the amendment, but it was also a step he supported because of the lack of transparency in the process.
“It’s unbelievable,” said Kuhn, noting he’d served for years on boards at lower levels of government where more transparency was demanded. “You have the (Open Meetings Act). You have the FOIA. We go through budgets detail by detail at the local level. Everything is done in transparency. But you bring stuff up here and it's done in a dark back room.”
Kuhn and Steele and more than a dozen other Republican and Democratic lawmakers interviewed by The News were unaware Rakolta’s company was the intended recipient of a share of the money they voted on. Many didn’t recognize his name.
Rakolta lands spot on commissionWalbridge's team wouldn't give details of its contract with MAEDA or with Ford, but pointed to Walbridge's long history with Ford in a statement provided to The News.
The company said Rakolta's advocacy for the state was responsible for landing him on Whitmer's population commission. Walbridge declined to answer a question regarding the potential conflict between Walbridge's receipt of a $178 million state-funded contract and Rakolta's role in leading the commission.
The group is tasked with examining ways of growing the state’s population, improving education, shoring up infrastructure and developing “comprehensive economic development strategies” benefiting communities and economic mobility.
At the announcement of the council in June, Rakolta said the state lacked the "cultural cohesion" needed to "compete on a global basis today."
"I’ve had firsthand experience with that listening to my clients," Rakolta said. "Many of you know I build auto and battery plants across the globe, and 50 years ago, our company was doing 80% of its work in the state of Michigan, and the percentage has been reversed. We’re now doing 80% outside.”

A year before his appointment, in March 2022, Rakolta told Bridge Michigan that the state needed to get serious about landing electric vehicle and battery plants. He said Michigan had essentially been "non-competitive" and incentives were just a step to correcting course.
"If we're going to be competitive, we're going to have to broaden those incentives … to get more than one or two battery plants," Rakolta told Bridge Michigan.

Rakolta typically contributes to Republican groups and pitched in last minute to Republican gubernatorial candidate Tudor Dixon's failed campaign in 2022 to deny Whitmer a second term.

But a few months later, in December 2022, Walbridge contributed $10,000 to Whitmer’s nonprofit, Michigan Strong, according to a public disclosure.
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