Controversial land deal critical to future of Marquette, NMU Foundation says

A controversial land deal involving 23 acres of a former hospital near downtown Marquette is not only legal, but crucial to the future of the region, officials with the Northern Michigan University Foundation said in a letter to Michigan Attorney General Dana Nessel.

The letter is a response to a previous inquiry to Nessel from state Rep. Sara Cambensy, D-Marquette, earlier this month. Cambensy asked Nessel's office to review the deal, asking a variety of questions about its legality. The foundation is a separate legal entity from Northern Michigan University, but exists to raise funds solely for the university.

More: State lawmaker asks Nessel to review Northern Michigan University Foundation land deal

"The law was adhered to," the letter, provided to the news media by the foundation, said. "Community trust was earned, not breached, and efforts to prepare the former hospital property for redevelopment were done in broad daylight ...

"As stated by a citizen at one of the public meetings of the City Commission, there are two futures for this site. One is the present path we are on, leveraging a variety of resources to facilitate demolition and prepare the site for development. The other is a 23-acre blight island with an uncertain future in the heart of Marquette and next to NMU's campus."

The controversy centers on land in the middle of Marquette that had been home to Marquette General Hospital. After being bought by a for-profit company, LifePoint Health, it was vacated in favor of a new facility across town.

The old hospital facility and land sit mostly empty now — a few weeds are popping up in parking lots and signs announcing the closure are stuck over wayfaring signs on the hospital property.

In 2018, LifePoint put the property up for sale and the Veridea Group entered into a purchase agreement for the property. That agreement eventually fell apart in 2019.

Veridea Group is owned by Bob Mahaney, who was appointed to Northern Michigan University's board in 2015 by then-Gov. Rick Snyder. Mahaney was the liaison between the university board and the Northern Michigan University foundation board until he resigned that post in October 2021. The nonprofit NMU Foundation raises funds for the university and is legally separate from it.

In 2021, the foundation and LifePoint had discussions about the hospital property, which led to the foundation agreeing to buy the land for $1. It has yet to close on the property, foundation officials told the Free Press earlier this month.

The foundation then put out a request for bids, looking for a developer to take on the project. Veridea was the only group to submit a bid, the foundation said. A mix of parking, a hotel, offices and residential areas are planned for the site, although details are still being worked out.

The foundation and the developer have worked with city of Marquette officials to put together a brownfield plan to capture tax incentives to help pay the $20 million cost of demolition, and lead and asbestos abatement on the site.

Then $8 million was included at the start of the month in the state budget to help also cover costs tied to demolition and redevelopment.

Cambensy raised several issues in her letter to Nessel, asking for an investigation.

Is "there is a substantial conflict of interest from an NMU Board of Trustee member using public office for personal gains through his private development and investment company (Veridea)?" she wrote. "Second, is there a significant taxable gain and advantage made by the private entities by having the NMU Foundation accept the old hospital property from (LifePoint) for $1 instead of selling it at fair market value?"

In its own eight-page letter to Nessel, the foundation took issue with all the concerns raised, saying it has gone above and beyond in sharing information with the public, even though it isn't required by state law to do so.

Nessel's office has not said whether it will launch an investigation or respond.

Contact David Jesse: 313-222-8851 or djesse@freepress.com. Follow him on Twitter: @reporterdavidj. Subscribe to the Detroit Free Press.

This article originally appeared on Detroit Free Press: Northern Michigan University responds to land deal inquiry