While Gov. Gretchen Whitmer seeks to raise the state’s corporate income tax among other taxes, one Michigan community is seeking to shield its residents from a proposed tax increase to pay for a massive sports and entertainment complex.

Romulus officials have once again shot down a private developer’s proposal to raise taxes for the development.

Kenneth Bardwell and his advisors presented a plan to the city of Romulus last month, requesting $152 million in public bonds with a 15-mill tax increase and a 2% sales tax in a limited area of the city to pay for his proposed $1.44 billion development.

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The city’s attorneys at Miller, Canfield, Paddock and Stone PLC have responded that much of that proposal isn’t permissible under state law. Bardwell’s funding request was an impossible legal and financial ask of the city, Crain’s Detroit reports.

Public-private funding for commercial real estate development is common and often receives backing from the state in the form of taxpayer-funded subsidies. Developments in Grand Rapids to build a soccer stadium and Lansing to build a new skyscraper have received millions in incentives and reimbursements from the Michigan Economic Development Corporation.

Gov. Gretchen Whitmer will present details of her proposed 2025-2026 budget at her State of the State address Wednesday night, but she has already revealed that she’d like to increase the state’s corporate income tax to raise money to fulfill her campaign promise to “fix the damn roads.” Business groups sounded the alarm that the governor proposed increasing the CIT from 6% to an estimated 8%, which would make it among the highest in the U.S.

Bardwell has a lack of development experience and a track record of failed attempts in other states. Plus, public bonding for private development has been controversial and left cities in debt in Detroit suburbs before.

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The city’s attorneys have “serious legal concerns with the proposed financing proposal, including hurdles and issues under the Michigan Constitution, federal and state law.”

An approximately $150 million bond is about six times the city’s annual budget, Crain’s Detroit reports.

The proposal does not ask for the city itself to directly back the bonds. But if it were asked to, it would represent more than five times its current debt of $28.32 million. And the city couldn’t anyway because it would put it above the 10% debt limit, based on the state equalized value. In Romulus’s case, that’s about $1.675 billion.

Because the bonding would be from the Tax Increment Financing Authority, but have no backing from the city, Miller Canfield attorneys said they would be “very speculative and bear interest at rates significantly higher than market interest rates for investment grade credit bonds, such as the other bonds issued by the city and the TIFA.”

A 15-mill tax increase within the TIFA district, which currently has a millage rate of 27.8 mills; such an increase would represent a 54% hike in property taxes.

While Bardwell has been persistent in his plans for a large-scale development —proposing various versions for more than two decades — nothing has been built. He has pitched the proposal not only in Romulus, but also in Van Buren Township and other communities across the country, Crain’s Detroit reports.

Last March, Bardwell’s revived sports and entertainment complex plan received conceptual approval, Crain’s Detroit reported. The site features both ponds and wetlands, quick access to both Interstate 94 and I-275, and Detroit Metropolitan Airport. It would be developed with a mid-sized arena for sports and concerts and other events.

Bardwell has been pushing his plan, in various forms, for two decades or more. But an early proposal raised red flags when some of the prominent politicians billed as being involved with the event and the project denied their involvement. There were other concerns about ownership of the land, why a proposal wasn’t formally submitted to the city, and Bardwell’s lack of development experience.

Crain’s reported that the 2007 version of the project failed over the land issue. In an interview last year, Bardwell said his plan in 2007 was geared more toward a community-center type development; while now it’s geared more toward youth sports.

“This is very different from what we were proposing,” Bardwell said in 2024. “This is more travel sports, from basketball to hockey, soccer, football, extreme sports, even golf.”

Despite coming to the city with a new proposal, Bardwell and his Motown Sports Group Holdings LLC are up against several hurdles—including a trail of bad publicity from failed developments in Vandalia, Ill., east of St. Louis, and Winchester, Ky., outside of Lexington.

New York City-based industrial/warehouse park developer Ashley Capital owns the site, according to Susan Harvey, senior vice president in the Canton Township office.

Harvey described Bardwell as “determined” to bring his project to the finish line, even as the property owner has fallen out of contract with him more than once. A sale is currently expected to close in April, Harvey told Crain’s Detroit.

Bardwell’s financing proposal that includes raising taxes is a no-go for several reasons, according to Miller Canfield’s opinion.

First, the law firm states, special sales taxes cannot be instituted in tax-increment financing districts, such as a DDA, or the city itself, and the Michigan Constitution prohibits anything greater than a 6% sales tax.

In addition, Bardwell’s proposed uses of public bond funding — developer fees totaling $10 million, working capital expenses totaling $12.1 million and private land acquisition totaling $35.2 million — are not allowed under Michigan law, Miller Canfield said.

Bardwell also requested $77.8 million in bond proceeds go to “horizontal development costs,” which the law firm said was an ambiguous term. Bardwell advisors later said it meant public infrastructure such as roads and sewers, which are permitted uses of bond proceeds.

The attorneys also expressed concern about project assumptions on revenue and timelines spelled out in the funding request.

“The anticipated revenue generation and project completion timelines outlined in your proposal appear highly aggressive compared to independent feasibility assessments,” Miller Canfield’s letter to Bardwell’s team says. “Given the scale of the project and the required investment, the city cannot assume the financial risk of issuing bonds at this stage.”

In response, Bardwell and his team say they will shift gears and reevaluate the financing proposal prepared by a Connecticut advisory firm after receiving the city’s determination.

Kevin Krause, Romulus’s economic development director, said Bardwell and his team received the letter from Miller Canfield last week. They responded by “asking for additional meetings to clarify the proposal,” Krause said.

The area is zoned for a regional center and entertainment district, and the city is on board with a project that would attract economic development and draw tourists and visitors to the area.

“We just need to make sure that the burden of that isn’t on the taxpayer,” Krause told Crain’s Detroit. “It’s a private development and they need to have a capital stack in place that isn’t relying on the taxpayers to do it.”