Michigan paid $10M before ‘red flags’ froze ex-House speaker’s pet project

• Michigan paid $10 million of $25 million grant now paused for ‘red flags’
• Grant went to nonprofit founded by ex-aide to House speaker
• More than $800,000 went to ex-aide’s separate for-profit firm

LANSING — Michigan paid nearly $10 million of a $25 million project championed by the state’s former House speaker before freezing additional funds and ordering an investigation into “red flags” about the plan to build Clare health center, records show.

The Michigan Department of Health and Human Services disclosed those taxpayer expenses Thursday, a day after Bridge Michigan exposed new details of the grant, which was awarded in December to a nonprofit founded by a former aide to then-House Speaker Jason Wentworth, who had pushed to fund the Clare regional health campus project through the state budget. 

The new state accounting confirms that David Coker Jr.'s nonprofit, Complete Health Park, reported using $3.5 million of the initial funding to buy roughly 70 acres of land for the development project from current state Rep. Tom Kunse, who succeeded Wentworth in the Legislature in January weeks before the sale went through.

Coker previously told Bridge that "no one is being paid above what we should be paid" and “there's not one guy... that's going to be pulling  $500,000 a year off this.” 

Related: 

• ‘Red flags’ surround $25M health campus pushed by ex-Michigan House speaker
• Michigan doles out millions in secret. Bills to change that may be tough sell
• Proposal to ban solar developments on farmland withdrawn amid confusion

But the new spending report raises new questions about potential profits for the former legislative aide. 

It shows $823,000 in spending covered "other expenses" for IW Consulting LLC, a separate for-profit firm that Coker founded in 2020 and is working on the Clare project. 

It's not clear whether any of that money went to subcontractors, including a former associate recently indicted for alleged bank fraud.

Coker did not immediately respond to a request for comment. 

Before freezing additional grant transfers in late March, the state said it had reimbursed the Complete Health Park nonprofit a total of $233,000 for salary and wages, marketing, space costs, supplies and materials and other miscellaneous costs. 

The health department did not detail those wage reimbursements, but a grant agreement shows the nonprofit planned to pay Coker an annual salary of $85,000 as project director. 

The agreement also outlined plans to pay an unnamed consultant a $150,000 salary, along with $1.45 million to an unnamed "external consultant" and $15,000 to State Advising LLC. 

Records show Coker founded the State Advising firm in 2018, but he said he has since turned it over to a family member expected to do some work on the health campus project.

The bulk of the initial payout — $5.4 million — was earmarked for the FED Design/Builders as an upfront payment to initiate construction of the planned health and fitness park in Clare, which is expected to include a pool, fitness areas, athletic courts and fields, a bowling alley and other buildings for medical offices, including doctors, dentists and chiropractors.

Brock Dennings, president of FED, said his firm has done some testing of the soil on the property and has hired another firm to help with the design of the first phase.

No definitive building plans have been developed yet, but he said the goal is to begin leveling the property by next spring so that construction can start in the summer of 2024. 

Dennings, whose firm is based in nearby Gladwin and which has done work across Michigan and in neighboring states, said he has seen nothing “nefarious” about the project.

“I hope people will recognize the opportunity it will be,” Dennings said. “If Dave (Coker) hadn’t done this, I don’t know who would.”

The health park was a long-running priority for Wentworth, a Farwell Republican who was term limited out of office at the end of last year. 

This week, Wentworth confirmed that he negotiated the budget funding for the grant but told Bridge he did nothing to steer the award toward his former aide. 

Rather, Wentworth said he asked the health department to seek competing bids and do "due diligence" on them.  

No competitive bid was sought, however, by the state. In a statement, a state spokesperson called the earmark “very unusual” and said the health department sought clarification from lawmakers as to the "intended recipient."

Kunse, the Clare Republican whose family firm sold the land to Coker's nonprofit for $3.5 million, said he sought legal advice before completing that sale, which was finalized two weeks after he took office in January.

Kunse has since publicly questioned the grant, which was awarded before he served in the state House.

He and Sen. Roger Hauck, R-Mt. Pleasant, told Bridge they support the health center in concept but relayed local concerns to the state health department in March.

"We want to make sure that the construction funds are used for construction," Kunse said earlier this week.