Malignant Growth Alliance (pt. 2): When Economic Development becomes Erectile Dysfunction

[XLFD]

THEN: 

On September 28, 2004 the Ludington Daily News reported: 

The (PM Township) board is also scheduled to consider issuing nearly $3 million in bonds to pay about half the cost of creating a new industrial park on First Street.  ... to consider authorizing the sale of $2.98 million in bonds to match with about $2.4 million in federal grant money to pay for creating a new industrial park on 77 acres of township-owned land on First Street.

Jorissen said the bond amount is higher than the grant money received because the bond amount must include about $161,000 toward estimated legal fees, $200,000 in contingency fees for the project, and about $150,000 toward the first payment on the bonds.

The next day's paper related:  "The board also took action Tuesday to approve issuing about $3 million in bonds to pay about half the cost of developing 77 acres of township property on First Street into another industrial park. That money will be matched with a $2.4 million federal grant to pay for developing that land as lots to be sold to businesses and industries. Jorissen expects the township will pay off the bonds with money from the lot sales."

 

The PM Township Board reported in 2006:  Development of the First Street Business/Industrial Park has been moving ahead in 2006, now that the Township has been successful in its application for an Economic Development Administration Grant from the U.S. Department of Commerce. The grant will pay for 50% of the cost of developing the 77 acre parcel on First Street, including Class A roads, storm sewer, sanitary sewer, watermains, site work, and water supply. The entire project is estimated at $4.79 million. The balance of the project cost will be financed through the sale of general obligation bonds by the Township.

This property, bounded by First Street on the south, Meyers Road on the east, and railroad tracks on the north and west, was purchased from CSX Transportation in 1998. Since then, a wetland evaluation and determination has been secured from the Michigan Department of Environmental Quality, and a storm sewer outlet was constructed while the Road Commission improved Meyers Road.

 

Then a little later, that same Board said:  Bids on four projects were awarded in February of 2006. Separate contracts addressed the wellhouse building, the wellfield, the 500,000 gallon water tower, and the Park's infrastructure. The official Groundbreaking ceremony was held on April 6, 2006, with work also beginning in the spring.

Today, the First Street Business Park is ready-to-go! All the infrastructure and streets are completed, trees are planted, signage is out for bids, and the first lot was sold in the early summer of 2008.

Stay tuned, we have more photos on the way!

 

That lot was sold to P&J Welding, they were to bring 10 jobs to the area, according to the Mason County Growth Alliance's then-CEO Julie Van Dyke in this 9-23-2008 LDN article.  They erected a pole barn right off First Street.

 

 

 

NOW

 

Six years after the groundbreaking photo complete with golden shovels of the $5 million industrial park, the sign backdropping that photo has led to a lot of growth in the area-- of vegetation.

Near the east entrance, an EMS building looks impressive with its two bays for ambulances, but it isn't zoned for manufacturing/industrial use.  The nearly 80 acres of field that has been 'developed' is a nice enough lawn complete with heavy pressure hydrants, utility infrastructures, and one pole-barn structure on property filling less than 5% of the park.  You can see the back end of that from the west entrance. 

Meanwhile, P&J Welding is the only sign of life in the Industrial Park, but the 10 jobs we were promised four years ago in this aluminum pole barn have never materialized fully. This latest Manta small business review, says their workforce is only 2 to 4 people.  The 3 vehicles parked outside on a mid-afternoon drive by amy suggest it is three, maybe four if they're carpooling.  This a far cry from their interview with the LDN back at the end of 2008, when the business owners said there would be ten, and used that to get a tax abatement from area jurisdictions.

 

You would think that the aforementioned Mason County Growth Alliance, the Ludington/Scottville Chamber of Commerce, The PM Township Board, the Michigan Economic Development Corporation, etc., groups that should be touting and marketing this vast tract of $5 million land would be actively seeking to fill it.  But you can barely find any information on it through web sources, and when you do, you have to dig through a 150 page State synopsis of industrial/business parks, where it is lost among the others. 

 

But this is what economic development does at any level.  The government spends tons of public money in the hopes of spurring business growth in an area.  You can say it works sometimes; you can say every other area's government does it, so if you don't you're at a disadvantage for attracting businesses. 

 

And yet, I have never seen the concept of economic development be part of the US Constitution/Bill of Rights or any States Charter Constitution.  To the founding fathers of this country, to the true capitalists that still exist who would not even consider taking corporate welfare and love the idea of not having their exorbitant taxes going to fund their competitors, the idea of economic development is ridiculous. 

 

This publicly funded Industrial Park on First Street, standing empty and likely costing PM Township more each year in lawn maintenance than it gets back from their one tenant, is just one of hundreds of such boondoggles created every year in the name of economic development.  No business erections in four years should show that it did not lead to growth, just dysfunction and shrinkage.  And maybe they should trim the area around their 'dated' sign, if they can find it. 

 

[Marty Redman]

I always wondered who and what paid for clearing out this land when they still had plenty of room over at the sixth street park.  But $5 million !!!???  No wonder the federal and local economies are in the crapper with this publicly funded fiasco.  This series is damn interesting so far.  $7 million dollars plus and really nothing to show the good people that live and pay property taxes in Mason County.    

[XLFD]

Thanks, Marty; you think with all the heavy hitters on the Mason County Growth Alliance (including County Adm. Fabian Knizacky, Ludington CM John Shay, and seven other rich folks) they would be coming out of the woodwork to defend their cash cow.  But I've been prying since early May, and they're ignoring or avoiding my contacts, and these articles asking them to show what they do with all the public $$$.

[Willy]

Excellent reporting X. There may have been no erections at the industrial park but I'm sure there were several at the law firm and others who benefited from this boondoggle.  [$161,000 toward estimated legal fees, $200,000 in contingency fees for the project, and about $150,000 toward the first payment on the bonds.]

[XLFD]

A few personal economies were stimulated and engorged,as you noted, in the process of screwing over the local and federal taxpayers; and those golden shovels did come in useful in covering up the real necessity of this tremendous public expenditure for speculative economic development, and the silver words of those who insisted on it.

[XLFD]

The City of Ludington Daily News reported on Wednesday that the MCGA may reorganize.  They met and are considering whether to keep the status quo, post and hire someone to replace Bob Barker (who has yet to be succeeded) or to divide the duties of his job among the board members until the business climate improves.  That last would foster even more conflicts of interest than we have right now in that organization. 

Their main alternative (if they can successfully get Oceana and Manistee County 'Growth Alliances' to bite) is to go regional for three counties.  So then they'd have even more regional squabbles.

 The best alternative is to put the taxpayer money back where they found it, or at least back in the general funds of the County, cities and townships that contribute to it.  It would give us an advantage over the two other counties.

[Morningstar]

Just found this post while browsing. Have to laugh at your commentary. Reminds me of the "Mushroom plant" where Stokely's used to be in Scottville. They got a huge tax break because they were "green technology" and were going to add all these jobs to the area. Well, it started out okay I guess. Then some vicious contamination came in and they had to lay everyone off suddenly. From then on, you would go by and see one or two cars there. Recently, I saw that Scottville revoked their tax abatement. In the case of this industrial park, I guess it's not true that "if you build it, they will come."

[XLFD]

If you're new to the Ludington Torch, we have been out here in the ether since 2009 and have quite a lot of interesting articles in our archives.  The keyword based search feature in the upper right hand corner of each page is a great tool for finding previous articles that may interest you. 

Good governments should not bend over and spend the people's money to incentivize panhandling business interests, but minimize their taxation and regulation to attract good businessmen.  Good businessmen should look at low tax rates, their own interests, and non-intrusive governments when they look for locations .