Grand Rapids Press reporter Chris Knape continues to dig into the questions raised by the Mackinac Center about a potential $10 million subsidy for a film studio infrastructure project called Hangar42. At the heart of controversy is the fact that a former Lear Inc. facility in Walker, which had been listed for sale at $9.8 million last fall, is now claimed to be worth $40 million by an investor seeking a 25 percent "film and digital media infrastructure project" subsidy from the state. Gov. Jennifer Granholm touted the project in her annual State of the State address last January.
Knape reports that state Rep. Robert Dean, D-Grand Rapids, sought and was granted a meeting with the head of the Michigan Film Office to inquire why it was "taking so long" and "to expedite" the subsidy after receiving "preliminary approval" back in September. Knape also reports that Dean's chief of staff is a "longtime business partner" with Jack Buchannan, the current owner of the facility, and had worked with him to acquire "incentives" from the state on other projects.
Knape also says that Rep. Dean was told by the Hangar42 "investor" seeking the subsidy, Joe Peters, that he had given the state Film Office a copy of the "certified appraisals" justifying the $40 million facility value (and $10 million subsidy claim). The Film Office has denied Freedom of Information Act requests and refused to answer any questions about the basis of the subsidy claim.
Dean also is quoted in the article saying: "I know the question was coming back from the film office, 'What was put into the building?' What was being done to bring it up to that level?"
In one sense this is good news, since it suggests that some due diligence was being performed by the state. Concerns about the level of scrutiny given by officials at the Michigan Economic Development Corp., which oversees the film subsidies, arose earlier this year when it awarded a $9.1 million subsidy/tax break to a convicted embezzler for a phantom company that Gov. Granholm said had been doing "phenomenal" things. The award and Governor's announcement came after the MEDC had been "working with" the operation for a year, according to the Livingston Daily.
Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.
Permission to reprint any comments below is granted only for those comments written by Mackinac Center policy staff.