George Matick Chevrolet, Proud Corporate Welfare Queen

[XLFD]

The Michigan Economic Development Company (MEDC) proudly trumpets on their page on the Pure Michigan website: 

"The Redford Charter Township Brownfield Redevelopment Authority will use local and school tax capture in the amount of $719,528 for the redevelopment of property on Telegraph Road in Redford Charter Township. The project consists of the renovation of the George Matick Chevrolet dealership as well as the construction of a new car wash and fuel service center. The project is expected to generate a total capital investment of $9 million and create 55 jobs."

This is the MEDC's own press release, touting that they will take the better part of a million dollars from the local schools and other local taxing authorities (money earmarked for police and fire services, road repairs, etc.) and use them to renovate a car dealership, shown above.  On the same page: 

"“These new investments in Southeast Michigan are strong additions that will revitalize communities and bring new jobs for our residents,” said Gov. Rick Snyder. “We have bettered our state’s business climate and our efforts are showing solid results. These new investments will mean greater economic opportunities for Michigan businesses and citizens.”...

“Today’s projects, all examples of public-private teamwork, will help strengthen communities and help growing companies generate new job opportunities,” said MEDC President and CEO Michael A. Finney. “The scope of these deals tells us much about Michigan’s comeback."

If bettering the state's business climate is to throw public money into one established car dealer's renovations, while not fairly doing the same for all other car dealerships then Governor Snyder is a seriously misguided nerd.  Such investment is incredibly damaging to the free market system and is our government's way of picking winners and losers using public money to support supposedly struggling businesses.  Businesses who almost always claim that if they don't get the public largesse, they will have to close shop and or move elsewhere, where the government takes better care of their companies.

Heaven forbid, we make George Matick Chevrolet pay for their own renovations, like their competitors and any start-up dealership would have to, but then the MEDC couldn't claim success in reverting dollars meant for necessary public services back into the hands of favored cronies.  This seems to be the welfare culture of Chevrolet, the company that all American taxpayers helped bail out a few years ago. 

An article out of Lansing follows the picture of Matick's president in his personalized sports car out in front of a building that looks in fairly good repair; it also questions the use of MEDC funds for this purpose.

Should Chevy dealership get state incentives to 'stay afloat'? MEDC board approves renovation plan

Should a car dealership qualify for incentives by the Michigan Strategic Fund? A Chevy dealership in Redford Township was approved for such incentives Tuesday over concerns raised by some board members.

George Matick Chevrolet on Telegraph Road will benefit from a plan approved by the Michigan Economic Development Corporation's Strategic Fund. It authorized the capture of $719,528 in local and school taxes for renovations.

The building is 50 years old, and was converted from a flea market into a dealership 35 years ago. “The building’s age, excessive size, high operational costs, increasing costs of regulatory compliance and maintenance, and current automotive customer expectations have rendered it unsuitable for long-term continued use,” according to information from the MEDC.

                                  Future look for Matick Chevrolet, Courtesy of taxpayer-funded economic development

The dealership plans to renovate the dealership and install a car wash and fueling center on an adjacent parcel it has purchased.

The tax capture will pay for brownfield-eligible activities like road and curb work, sewer modifications, asbestos removal and landscaping.

But some questioned: Why help this dealership when other auto dealerships are competing for the same business?

“There are other competitors in the area and effectively we are helping to make it more difficult to them,” said Michigan Strategic Fund Board Member Jim Walsh.

Board member Jody DuPree Vanderwel expressed concerns as well: “Assuming there are other dealerships in the area who have on their own dime brought their dealerships up to the standard, is this facility going to be able to compete in the long run?” she asked.

MEDC Community Assistance Team Specialist Stacy Esbrook said other dealerships are nearby and George Matick Chevrolet is trying to “stay afloat.” The community does not want to have a large vacant parcel if the dealership closes, she said.

Ultimately, the board voted unanimously to approve the deal.

Board member Bill Martin said this was a tough decision.

“It’s a close call but I want to make sure people know I don’t think we should be in the business of financing dealerships or the construction thereof,” Martin said.

Michael LaFaive, a director with the free-market advocacy group The Mackinac Center, said this type of “special treatment” is unfair, doesn’t create jobs and is too costly.

“It is unfair because this dealer no doubt competes with other dealers not lucky enough to get a government handout; robbing many taxpayer Peters to subsidize the corporate Paul only shifts precious resources around. Evidence shows it is unlikely to create net new jobs. Worse, this is money that could have accrued to local schools. Depriving them of such revenues represents a very high opportunity cost, unless of course some future graduates intend to wash cars on the new site,” LaFaive said.

MEDC President and CEO Mike Finney said he doesn’t recall the MEDC ever having approved incentives for auto dealerships in the past, and it does raise a concern. But in this case, there was a public infrastructure need.

“We evaluate every project on a project by project basis. In this case because of some of the public infrastructure needs that were there, it made sense for the MEDC staff to recommend it and the board appropriately approved it,” Finney said.

http://www.mlive.com/lansing-news/index.ssf/2014/08/auto_dealership...

[Willy]

This corporate welfare is helping to grow our debt. I for one am tired of this crap but as long as businesses play the "victim" game the fools in Government will always try to bail them out. Good article X.

[XLFD]

Thanks Willy.  Emily Lawler out of Lansing started an investigative, well-researched report on TIF financing this week and you won't believe some of her findings.  TIFs for Brownfield projects, DDAs and similar 'economic development' projects siphoned minimally $2.5 Billion from local taxing authorities in Michigan since 2005.  I am going to synthesize her findings into a thread at the end of the week.

[AQUAMAN]

I thought "brownfield redevelopment" by it's nature was more aimed at cleaning up underground contaminates and other above ground eyesores and contamination. I may be wrong in this case, but would like to take a look at the particulars of it, just in case. From other knowledge, I've heard that ALL Chevrolet dealerships are being forced by GM to have the same showroom facade on their buildings, so ALL the dealerships must conform in order to continue representing GM's brands. GM said it wants to cater to customers with the same approach and same showrooms, so that they are more even in marketing the products. Can anyone clarify on this situation in detail? Thanks. 

[XLFD]

Ideally, these redevelopments are to incentivize and establish new businesses on the ruins of the old businesses, which may involve some costly cleanup operations, or not.  If you read through Act 381 of 1996, you'll find the general blueprint for setting up an authority not much unlike Downtown Development Authorities, and as we have noted here in a few articles on the Ludington DDA's excesses and foibles, there is a lot of latitude for making expenditures that one may find are not in the spirit of the authority. 

 This section (see subsection n (iv) and beyond) says that Brownfield Redevelopment Authorities can engage in the following activities:  Infrastructure improvements that directly benefit eligible property, Relocation of public buildings or operations for economic development purposes, etc.  When interpreted broadly, they can spend the money on most anything, and not be held accountable because they do not have to make very concise accounting, unless you have some 'watchdog'.

I have not heard anything regarding the showroom situation.