Media Covers Grand Rapids Movie Studio Deal After Mackinac Center Analysts Release Results of Months-Long Investigation

MEDC mum on Hangar42 deal

Grand Rapids-area media have picked up on the story of unanswered questions involving the Michigan Film Office, the Michigan Economic Development Corp. and a movie studio that Mackinac Center analysts uncovered.

Fox-17WOOD-TV and The Grand Rapids Press had coverage Thursday about Hangar42 Studios after the Center sent out this news release.

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Michael LaFaive, director of the Morey Fiscal Policy Center, and Kathy Hoekstra, communications specialist, released a commentary and video after their months-long investigation. The MEDC and MFO, along with the principals involved in the Hangar42 project, have refused to answer questions about why the building in which the studio is located is valued at $40 million after having been listed by a real estate agent for less than $10 million as late as February. Hangar42 has also applied for an "assignable" infrastructure tax credit, worth 25 percent of the investment in the project, through the state's film subsidy program. The project was touted by Gov. Jennifer Granholm in her State of the State address earlier this year.

"This project should be called 'Area42' after America's famous and highly secretive military complex known as Area 51 in southern Nevada," said LaFaive of the Grand Rapids site. "During our three-month investigation, we've sought answers regarding the cost of the property, the status of the deal, the owners of the studio, payment of contractors, financing and more, but no answers have been forthcoming."

Hoekstra said the numbers "raise a lot of questions. Was the buyer prepared to pay more than four times the previous asking price for the property? Was the building purchased only after $30 million to $35 million in upgrades? Taxpayers are entitled to know how their money is being spent."

LaFaive noted this is another in a long line of problems involving the MEDC and less than transparent behavior.

"This is just the latest chapter in the MEDC's effort to remain as closed to public scrutiny as possible," said LaFaive, author of the Center's Policy Brief titled "MEGA, the MEDC and the Loss of Sunshine." "If the governor is willing to laud the project to a statewide audience, then her administration should be willing to share the details with taxpayers who are bearing much of the cost." 

UPDATE: The Grand Rapids Press continued its coverage of this issue Saturday, including talking to a contractor who said he is owed about $270,000 for work he did on Hangar42. LaFaive told The Press that the movie studio principals and the Michigan Film Office could easily lay to rest questions about the project.

"They can demonstrate that the Mackinac Center is wrong for raising these questions," LaFaive said. All they need is some transparency. Secrecy is the core issue here. There's no reason, at a minimum, that the buyer and seller shouldn't want to explain themselves."

The Press has more coverage today, including questions about a Grand Rapids-area lawmakers involvement in the deal.