Commission presses for clarity as enhancement grant costs rise and tunnel change order appears
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Summary
City Administrator Chad Baugh and Lenawee Now representative Pat Farber reviewed the South Main Street pedestrian tunnel change order and the broader enhancement grant program. Staff said change‑order overages will be paid from the enhancement grant (not the city general fund); Pat reported roughly $7.06 million spent to date and described $7.9 million remaining and urged rapid, shovel‑ready projects; commissioners sought clearer budgets, roles and a memorandum of understanding with Lenawee Now and MEDC.
City Administrator Chad Baugh and representatives of Lenawee Now gave an extended briefing on the status of the city’s enhancement grant and the South Main Street pedestrian tunnel, a long‑running project that has generated safety and budget questions.
Baugh told commissioners he signed a change order for tunnel materials that requires roughly an additional $300,000 and said those expenses are expected to be covered by earmarked enhancement grant dollars, not the city’s general fund. He asked the commission for direction on next steps and clearer communication with residents about the project’s history and costs.
Pat Farber, representing grant administration partners, said the enhancement grant originally funded three main projects — riverfront redevelopment, a park house project and the tunnel — and urged fast action to use grant funds within the grant time frame. “Today, we have expended $7,059,435,” Farber said, and he stated verbally the amount remaining to spend (about $7,936,166 as reported in the meeting). Farber said a short application form will be used to vet shovel‑ready projects and suggested setting aside smaller pots (for example, $250,000) to support quick façade improvements and downtown priorities that can be implemented rapidly.
Commissioners challenged staff on transparency and decision authority. Several asked who controls reallocations if cost overruns occur, whether Lenawee Now or the city will sign off on projects, and whether the city will be asked to replace projects originally planned for the enhancement grant. Staff said MEDC guidance indicates Lenawee Now holds legal responsibility for grant reporting and that the city and Lenawee Now should enter a memorandum of understanding to clarify roles and approvals.
Why it matters: the enhancement grant totals multiple millions of dollars and funds projects that shape downtown investment, trail work, and infrastructure. Commissioners emphasized they expect to approve projects on city property and requested a clearer budget showing how much of each project (Town Square, Winter Street, tunnel) remains and what reallocations are proposed.
What’s next: staff said they will work on a draft agreement with Lenawee Now and MEDC, provide a forensic audit update, and return with a clearer spending plan and budgets for the Town Square, Winter Street and tunnel projects.