Monday, March 26, 2012

Allen Park officials planning to dig their way out of debt by digging a little deeper

by Tim O’Brien, executive director of the Small Government Alliance

By now everyone in Michigan has heard how the city of Allen Park’s plan to go into the movie business and grab a piece of the industry Lansing was luring with generous subsidies turned into a disaster epic.

A smooth-talking Hollywood producer named Jimmy Lifton convinced local officials to borrow $28 million to purchase more than 100 acres of property along Southfield Road which he would then lease from them to create his Unity Studios. There would be sound stages for major motion pictures, studios for TV shows, audio and video editing facilities, and more. Not to mention the hotels, restaurants and all manner of supporting businesses that would serve

And there would be a Lifton Institute to teach the unemployed all these movie-making skills — with tuition paid the “No worker left behind” program.

It was the stuff dreams are made of.

Unfortunately for starry-eyed Allen Park officials, Gov. Granholm’s retraining program was canceled. Gov. Snyder capped the total annual film subsidies at $25 million – well below what a single, major fea-ture might use up. And Jimmy “Hollywood,” having never made a single lease payment, packed up and “got outta Dodge.” It was only then that city officials, who had relied only on their own tax assessor’s estimate of the value of the property, got around to having an inde-pendent appraisal – which put the market value of the real estate and buildings at $18 million.

For Allen Park, already staggering from the same, one-two punch as the rest of her Wayne County sis-ters – a declining tax base and state revenue shar-ing, along with exploding labor and legacy costs – this horror movie was the back-breaking straw.
Last August officials went to residents asking for a Headlee override. It was turned down by a 3-1 margin. So they came back in November with two proposals – 3.5 mills to help with the labor/legacy costs and 2.3 mills for the shortfall resulting from their overpriced, under-producing property leasing business that was only generating enough revenue to cover half of the bond payment.

Voters approved the first but, again, rejected
the second. However, as experience has so fre-quently demonstrated, politicians simply will not take “NO!” for an answer. So it came as no surprise when the new mayor and council (also elected in Novem-ber) announced a special election for May 8 to ask voters for the money to at least get them past this year’s bond payment for the failed movie studio ven-ture.

And hedging their bets in the meantime, they are planning to borrow $1.2 million on their own author-ity via what are called “Tax Anticipation Notes.” The municipal equivalent of those “Payday Advance” loans you see hawked on late night television, the entire amount – plus interest – will be due and pay-able from summer tax receipts. In order to get over that hurdle they plan to go to the State Administra-tive Board for permission to sell Fiscal Stabilization Bonds to pay operating expenses (so obviously imprudent a course of action that it would,
otherwise, be illegal.)
But some residents have had enough.

The Small Government Alliance, an independent, non-partisan PAC based in Allen Park is organizing an effort to block the city from doing any more bor-rowing, noting the (tongue-in-cheek) 1st Rule of Holes: Upon finding yourself in one – STOP

Bryan Diebolt, another Allen Parker who made news last summer for having gone to the state treasurer to request appointment of an Emergency Manager to straighten out the mess (but was turned down) has joined the effort, now called “Restore Allen Park,” as
the official spokes person.

Justin Mordarki from neighboring Taylor, both a WCTA member and an experienced Tea Party or-ganizer, has also signed on. As have a number of others.
Visit Restore Allen Park on web or Facebook.