How to Run a Business Out of Ludington

[XLFD]

Introduction

I've been monitoring the actions of Ludington City Government for a long time, and I've noticed that they haven't been very friendly to small businesses.  One could rationalize that the $150,000 they take in and spend on downtown activities and expenses via their Downtown Development Authority (DDA) is a boon to the small businesses therein, but one would be more correct saying that the money is often spent with little oversight on things which do not really help the business climate at all (except for the unscrupulous officials who direct that money to their own business-- see the Development of Authority series of eleven articles in the Ludington Torch). 

Tax abatements for small businesses?  The larger businesses seem to be the ones who ask and get what tax abatements they give out, but these require other businesses and the community to pay more in taxes, including competitors.  Is it fair for Kaines Manufacturing to help pay for the cost of subsidizing Straits Steel & Wire?  Tax abatements are just a directed waste of public funds to businesses that aren't too proud to beg.

Since the flood of 2008, shortly after which I became a community watchdog, the city has not made matters right by helping correct the tons and tons of sewage that was dumped into the PM Bayou, a lifeblood of the area's private, small business, marinas, even when federal money was available and the bayou almost 'died' over the next couple of years. 

The city got a gift of over $200,000 from the state to dredge their marina, $500,000 for their transient dock project, and millions of dollars of other gifts from the state; they have pled their case before the city council to have the state give them up to $1.8 million to replace their aging docks over the next few years.  These benisons are not available to the private marinas, they have to make ends meet by what they earn-- an increasingly difficult task with the unfair city competition.

But the City of Ludington has amped up their attack on small business.  After losing the battle to create a Historic District against the wishes of a supermajority in the district who were dead set against it, the City envisioned going after hundreds of small business owners with rental inspections this last year.  All meetings had dozens of landlords, tenants, and others asking the city not to do this superfluous measure that would definitely create a housing shortage in a sector already hurting:  affordable housing in Ludington. 

The City passed it anyway.  During the process, an ambitious door-to-door saleslady named Claire Whitcombe had her soliciting permit revoked and was effectively thrown out-of-town on what was at most self-contradictory hearsay.  Shortly thereafter, the city okayed development of the bowling alley block downtown which would entail a tax increment financing (TIF) scheme and other tax abatements that will take millions out of the pockets of the rest of us over the next 15 years and beyond.  This project will cost $300,000 per unit to make "low rent housing", subsidized by those who already supply such housing, despite city hall interference.

Unfair Subsidization of the Competition

Now you may say that A.J.'s Action Territory (AJAT) is a small business outside of the city limits, and out of the area of effect of the Ludington City Hall.  But they do get their water and sewer services from the City, and they are close enough to be affected by certain actions taken by the city that may create an unfair playing field. 

Last year had one such action when the Ludington Area Jaycees (Junior Chamber of Commerce) petitioned the city council to help them acquire financial aid.  After the March 9th meeting, I admitted: 

"I'm just too dense to figure out why an organization of young business professionals who use the profits from the mini-golf course to donate to worthy causes aren't saving enough of their profits to maintain their facilities and so have to plead for free money from the state (which was taken from taxpayers and fee-payers in the first place)."  Twenty two minutes into the meeting video below I had some poignant comments, followed by a lackluster defense by the Jaycee president, Heather Catron, at the public hearing for that grant that was eventually okayed by the state DNR:

"Let me begin by praising the good works of our Ludington Jaycees over the years, and their business acumen that allows them to use the profits realized from donations made at the lakeside mini-golf course to donate to worthy causes in our area. I wish them continued success, however, I do rise in opposition to this Passport Grant application made to the Michigan DNR.

In an estimate made by Adventure Golf Services in August 2014, the total cost of refabricating the course was for $23,572. A figure of which was also reported in the Ludington Daily News in September as being the figure. In that article no mention of grant funding for the project was made, they were simply asking for community help to renovate the course.

While both the City manager and the article has intimated that other services and materials will be needed for this upgrade, there has been no justification for such services and materials, or any other contractor for that matter, given in the council packet, which will be the paperwork presumably sent to the DNR for this grant.

Passport grants are made in denominations up to $45,000 for projects that are for local outdoor recreational projects, the money coming from user fees and taxes collected by the state DNR. To apply for a grant of $45,000, you must also be willing to put up at least $15,000 of your own money for the project. If the grant is applied for, the total work being done must amount to $60,000 or more.

Sixty thousand minus 23,000 is $37,000 of state taxpayer dollars that is unaccounted for in unexplained expenses for this project. As a public servant in the role of approving such a grant application, I could not in clear conscience vote yes with 60% of the expenditures clearly uncommitted for the project, and I expect the grant-granters in the DNR will be suitably concerned themselves over such an obvious oversight.

If I had the position of a city councilor, I would remand this back to the Jaycees so they could get more clarity on the numbers, and advise them, for the sake of the public and their integrity, to revise the figure applied for to reflect the actual services and materials they need to complete the project in a fiscally responsible way.

In closing, the Jaycees admit to getting over $20,000 per year in green fees at the course, admit to have donated about $300,000 from the profits realized from that facility back to the community, and admit they have been looking at upgrading the course for a few years. The Jaycees need to realize that to create a good business model for this mini-golf course, they should be putting aside some of those profits they’re donating for maintaining their facility for budgeting projects like this. Such business skills will obviate the need for pleading with the state for public funds, and being a burden rather than a boon for the community."

After the next meeting, In this Recap of the March 23, 2015 meeting, I noted: 

"The Jaycees $45,000 Recreational Passport grant which had a public hearing at the last meeting was the next up, they even had a further grant application for $10,000 from the Mason County Foundation.  I hope to speak more on this later, but it is a pretty sad state of affairs when the local Jaycees freely donate the profits they make from the mini-golf course to a variety of causes, and then needs to have public funds subsidize their maintenance of the course.  I wonder how the owners of the private mini-golf courses in the area, who qualify for no such grants, feel about that?"

This year arrives, the news comes out about the recreational passport being approved for the Jaycee's use.  If you have been to the beach lately, you will have seen the area below all removed, and a fine beach being there:

AJAT on the other hand, created and funded their own golf course and maintained it with the proceeds of their business.  The course below is on the same scale as the beach mini-golf course, showing it is nearly three times larger in area, with multiple levels to it as well.  Few would say it wasn't the better course for fun, variety, and even value.  AJAT to my knowledge, has never asked the township for a handout or for an assist to get public money. 

Flushed Away

But Ludington City Hall did not only create a way to get their competition fully subsidized for revamping their course, they also did a couple of other things to make life in Ludington unpleasant.  Like the rest of us, the city voted to effectively nearly double the sewer rate over the next three years to help pay for the water and wastewater treatment plant upgrades. 

This was bad enough with the amount of water this park goes through in filling and unfilling their various pools, but then the city's negligence over the last forty years with their wastewater plant kicked in, as did the sewer smells downwind of it early this spring.  And guess who lies directly downwind of the prevailing southwesterlies of our summer months from the plant?

Facing the prospect of this smell over at least the next two years, the rising sewer rates, and the subsidization of their competitor, all as a direct result of city hall actions, the doors to A.J.'s are now and forever shut.  If you loved A.J.'s, don't be fully dismayed-- their facility in Comstock Park is still open and doing business, in a better business environment.

[Brad]

Great point X!

And my kids would like to say thank you to COL, for running AJs FUN Center out of the area with the subsidization ....and stench.  Good news for them on their first day off for summer.

Now I guess they only can go to the Jaycees course....... no.... well.... um.. big sandbox.

...Is there a timetable to get Jaycee course done..?

And maybe the AJs lot will be a good spot for another Ludington business to move to.

We will be going to Pentwater a lot this summer... 2 mini-golf courses, beautiful beach, and ...no stench.

[Willy]

Presented with intelligence and facts. Well done X.

[jfc123]

Sometimes I read what X writes and feel like, how can I respond? Thorough, well thought out, presented on point. The guy can be intimidating, lol! J/K, X Ludington is lucky to have your passion and I pray you win!

[XLFD]

Thanks for the additional graphic graphic, Willy, it is definitely better than mine in making the point. 

Jfc123, I would like to have a dialog with the city about how to keep businesses in this town and make them happy to be here.  Their philosophy seems totally contrary to logic, winds up putting a lot of public money on wasteful projects, gives handouts to crony contractors, and leads to their core functions being overlooked.   I hope to help change the city back to a healthy environment in all respects.

[AQUAMAN]

No COL representative ever contacts private businesses for suggestions on improvements anymore. With  guys like the perfect Shay and Wilson couple, who needs to. Well, a Jaycee representative I talked to just said the Lud. Mini-Golf won't be done until late July or August. The reason isn't known, or stated. I guess the stupidity of tearing the old mini-golf out last fall or early spring, to wait for months on end for the new one, are sure a great example for Jaycees to follow in their business life. They probably lost another $25,000 this season due to revamping the course, real smart too. These same people are now soliciting donations for the July 4th fireworks. If they haven't got the funding for that by now, only some 2-1/2 weeks away, then they are losers on that subject too imho.