THE LOCAL AREA WATCH

DEAD CROWS AND MOSQUITOS

Only a few years back crows by the hundreds would gather in the trees behind a house my family owns on the northeast side of town.  They would chatter among themselves for several hours and then decamp en masse for another place only to return the next day.  The crows don't come back now.  The West Nile virus, which has decimated bird populations across the country, is a likely culprit.

West Nile virus is also a threat to human beings.  It can cause meningitis, encephalitis, and now poliomyelitis (swelling of the spinal cord which can results in paralysis) in sufferers.  There have been thousands of cases in the United States over the past few years.  Michigan has been, fortunately, spared the worst of the disease.  Only sixteen cases were reported in the state in 2004.  West Nile has been most virulent in California and the Southwest.  (Click on the map for details.)

Nevertheless, every summer still presents of risk of contracting West Nile virus, because the disease is spread by mosquito -- and the little bloodsucker is not jokingly known as the Michigan state bird without reason.  Local mosquito control programs have been effective in suppressing these pests, but Grand Rapids City Manager Kurt Kimball wants to ax our program to deal with the City's $135 million five-year budget deficit.

The disease's northeasterly march towards the Great Lakes region is still over the horizon, so maybe the need for the program is not urgent.  However, Kimball's proposed elimination of the City's mosquito control program is in concert with eliminating groundskeeping for City parks this summer.  One can imagine the rich breeding grounds for mosquitos that a lack of park maintenance around the lagoons of Riverside Park, for example, will produce.

The things that directly benefit the residents and taxpayers of Grand Rapids, like mosquito control and mowed parks, are not what is sinking the City into the red.  It's payroll for unnecessary administrative staff, free healthcare insurance for City employees, and an underfunded pension program that is the problem.  The City used to be able to keep the parks open and clean and free of pests with a whole lot less in tax revenues.  The one big thing that has ballooned over the past thirty years, while the City's population has remained stable, is the City's payroll.

It's time for City Manager Kimball to get back to some old-fashioned priorities:  Residents and taxpayers first, City staff second.  Tell Mayor Heartwell and the City Commission to keep our parks and neighborhoods healthy and safe this summer.

BILLIONAIRE BAIL-OUT SLIPS THROUGH

Just for the record, folks, the Grand Rapids City Commission (with only Commissioner Jendrasiak dissenting) quietly caved into Amway-founder Rich DeVos and approved a $5 million tax subsidy for his new hotel project at the corner of Pearl and Campau downtown.  Instead of DeVos and his fellow developers picking up the tab for the public infrastructure changes and additions their project requires, we taxpayers through the Downtown Development Authority get to pay.  Plus this subsidy qualifies DeVos and crew for nearly $6 million in relief from the state's Single Business Tax.

Exactly what good any of this does for us the taxpayers is unclear.  As a business proposition a new hotel downtown is a shaky one with vacancy already running nearly 50% for existing lodging in and around downtown.  Indeed, DeVos's hacks admitted that the hotel project probably wouldn't be viable without the tax subsidies.  So that was our problem to fix for this alleged billionaire?  Because DeVos couldn't be sure to turn a profit on the deal, the City Commission felt obligated to pledge our hard-earned tax dollars in the middle of a budget crisis that threatens to shut down public pools and fire firemen to help this pyramid builder into the black?  This would be absurd were it not for the fact that important City services will be axed because of the mismanagement of existing tax dollars.

At least this should put to end once and for all the tripe that Rich DeVos is a great benefactor to Grand Rapids.  If he in fact has that $3 billion fortune Forbes magazine has attributed to him, how in good conscious could he lean on City taxpayers to subsidize a business deal?  That five million dollars in City tax subsidies will cost us a whole more than it would DeVos if he truly is a billionaire.

It should also highlight the Grand Rapids Press is little better than a flack for the players in town that publisher Danny Gaydou loves to suck up to.  The Press's editorial fawning over DeVos and his hotel project was bad enough, but did any of you even notice an article in that rag reporting the City Commission's approval of the tax subsidy?  Like the way the Press evaded reporting the deep opposition to the hotel subsidy, it gave us no word of the Commission's final vote other than the standard public record notice tucked in with all the other notices issued by the surrounding suburbs and townships.

Certainly a slippery way of doing business when our elected leaders fork over millions of our dollars to a billionaire and the town's watchdog doesn't let out a whimper when it happens.

HOPE ON THE HILL HIGH AND DRY

The Van Andel Institute, also known in the more insipid P.R. circles as "Hope on the Hill", is passing the hat to endow a $3 million project to research Parkinson's disease.  The VAI is the creation of the late Jay Van Andel, business partner of the still-breathing Rich DeVos with whom he founded Amway Corporation, the granddaddy of all multi-level marketing schemes.  Upon his death last December, Van Andel left according to Forbes Magazine a fortune of nearly three billion dollars.  In the past Van Andel had pledged this fortune to the VAI.

So why is the VAI now soliciting three million bucks, a mere one-tenth of one percent of Van Andel's estate, for a research project?  Have the Van Andel heirs left the "Hope on the Hill" high and dry?

Well, we do know Jay's kids yanked from the VAI the support it was receiving from their father's private foundation.  In January the foundation reportedly had $150 million in cash, which Jay's kids said they were going to re-organize into a new foundation.  Thus, less than ten years after its founding in 1996 by Van Andel, the Van Andel Institute is bereft of Van Andel family funding.  Nevertheless, one of the kids, David Van Andel, remains in control of the institute as chairman and chief executive officer.  Indeed, along with the young Van Andel, the usual suspects populate the VAI's small board of trustees, including the pyramid builders' colleague Peter Cook and Autodie demolition expert John Kennedy.

Sure, David Van Andel and his wife pledged a few bucks for the Parkinson's research project, along with several others for a whopping grand total of half million dollars so far.  But this is chicken feed compared to the three billion dollars the Van Andel estate is supposedly worth.  If the Van Andels will not support their father's namesake institute with the tiniest fraction of that fortune, why should anyone else?

Then again, maybe we must support the VAI because Jay's kids cannot.  What if the billionaire image the Amway founders played was just another part of the sales pitch to flog their distributorships?  We now know that before its reorganization Amway had overstated its profits for twenty-five years by an estimated 25%, which makes all the difference between a net worth numbering in the billions and one hanging around zero for the families of the two pyramid builders.  That might explain why Jay's partner Rich sold off Plaza Towers in downtown Grand Rapids and has been rattling the tin cup for public subsidies for other business ventures like the new Marriot hotel also downtown and a new arena for his Orlando Magic.  That might also explain why the Amway heirs are selling Hyundais, managing minor league sports teams, making dresses, and manufacturing metal shelving instead of boosting the core business to a new level of success.

Then again, maybe Jay's kids do have the billions and don't think the VAI's mission is worth even a small chunk of that change.

ENCORE: COMPLACENCY

[Note: This article was originally posted on February 24, 2005.]

Obviously the Local Area Watch is hard on the local media, especially the Grand Rapids Press.  What President Bush just finished telling the Ukrainians a few minutes ago about the importance of a free press explains why.  The Ukrainians are embracing a burgeoning democracy after staring down the remnants of the old Soviet regime that tried to steal the recent presidential election from the reformers.  The President advised these new democrats that a free press was vital to ensuring the "transparency" of government.  Indeed, it is.

But here in the U.S. where we don't worry about the foundations of our democracy, we can become complacent.  It is especially easy to become complacent when our watchdog, the free press, prefers to lull us into ignorance with splashy graphics, huggable front page news, and features that tug at our heartstrings than do the hard work of revealing the news behind "business as usual" in our local communities.  It has struck me as a little bizarre that people are generally better informed about the national political scene than what is happening in their own backyard. But then getting that local info means editors have to push their reporters to go out and find it.  There are no services, like AP or Reuters, collecting this stuff for them.  Nothing short of hard work is needed to report on local government and public institutions.  Therefore, what happens at townhalls and city halls often goes unreported.

Our newspaper of record, the Grand Rapids Press, is unfortunately a prime example of what's wrong with local media.  This is an insipidly-designed newspaper that happily went without a reporter at Grand Rapids City Hall for several months not so long ago.  Nor does it help when the publisher of the Press hankers to pal around with pyramid-builders like Rich DeVos and his ilk or sit on the boards of powerful organizations like Spectrum Health Care.  (Little wonder long-time editor of the Press, Mike Lloyd, has gone silent on Spectrum's machinations.)  Conflicts arise and the light the free press must shine on those who claim authority or privilege in the name of the public good grows dim.

Without that light, government cannot be transparent.

BUS DRIVERS RE-BOOTED

Last week I reported on Grand Rapids Public Schools superintendent Bert Bleke renegeing on his commitment to consider keeping the support staff on the school district's payroll if their union could come up with $1.9 million in wage and benefit concessions.  The support staff union did this and it looks like Bleke did not respond in good faith.  Instead he immediately began negotiating a deal to privatize the bussing of students with Dean Transportation of Lansing.

It is Bleke's apparent lack of good faith in dealing with the support staff while singling them out for privatization that we take issue with and not with the need for Bleke to reduce the school district's expenses.  Therefore, I will report without comment new information about the Dean Transportation deal.

Dean Transportation has reported that it will offer the GRPS bus drivers employment with a 15 to 19% reduction in wages, no paid vacation, and no employer contribution to health insurance.  So drivers will have an opportunity to keep their jobs, although not on terms as generous as the taxpayers provided.  No word yet on the disposition of the jobs for the custodians, cafeteria workers, and the rest of the school district's support staff.

PICKING WINNERS AND LOSERS, PART II

A couple of weeks ago I chided Gov. Granholm for picking winners and losers in business through special tax breaks, such as the $40 million package she offered Toyota to locate an R&D center in southeastern Michigan.  I made the point that it was better to reduce the tax burden on all businesses than to select a few favored companies to receive the tax breaks.  The market -- i.e., we the consumers, not our politicians -- should determine which businesses prosper.

It kinda sorta appeared that Guv Jen was going to do just what I ordered with her reform of the despised Single Business Tax the state levies on all businesses.  It is essentially a value-added tax with a bewildering set of credits and recaptures that makes it incomprehensible to taxpayers.  One thing Guv Jen proposes is to eliminate the double-taxation upon capital intensive businesses, primarily manufacturers, by adding a personal property tax credit to the calculation of the SBT.

Great!  No reason why manufacturers should be penalized by the SBT.  But then Guv Jen also proposes to recoup the tax break to manufacturers by levying a 2% tax upon insurance premiums, thus shifting the tax burden to service companies.  So instead of punishing manufacturers and rewarding service providers, the SBT would do just the opposite.  Once again, the governor is proposing a tax policy that picks winners and losers on the basis of today's conventional wisdom that manufacturers should be favored.  [Note:  I say this as the general manager of a manufacturing plant.  I do love smokestacks, folks, but I don't expect my choice of business to be favored by the government.]

In fairness to Guv Jen, I should note that she also wants to re-jigger the SBT to weight it more heavily on a company's profits than its payroll.  A timid step, but it's in the right direction.  If it makes sense to tax businesses differently than individuals, taxing profits is the most equitable basis.  At least that tax is based upon the market's determination of which business's are the winners and which ones are the losers.

DEQ LET POLLUTERS WALK

On Tuesday the State Auditor General's office released a report confirming what we have reported here:  The Michigan Department of Environmental Quality has been easy on polluters, leaving residents with unremediated "hot spots" and taxpayers with the tab for clean-up.  Under Russell Harding, the director of the DEQ during the Engler administration, that agency undercut the efforts of state prosecutors to hold polluters responsible for serious violations of environmental laws by blocking investigations or striking lenient settlements.

The Toxic Towers scandal is just a part of Harding's legacy of lax enforcement of our anti-pollution laws.  The auditor general's report focuses on five cases in which Harding and his top deputies ran roughshod over the efforts of DEQ staffers and the Attorney General's office to hold polluters fully responsible for the costs of cleaning up the hazardous wastes they released into the environment.  A couple of the cases are in the region:  An Allegan County landfill contaminated a nearby municipal well field and a Whitehall manufacturer dumped toxic waste into White Lake.  Click here to download the auditor general's full report.  (Note you'll need Adobe Acrobat Version 5.0 or later to open up the file.)

Keep in mind, folks, these are cases for which there is an extensive record because there was at least some enforcement though so lax that the taxpayers were left holding the bill for as much as 80% of the clean-up costs.  The report just scratches the surface and does not address all those cases like "Toxic Towers" in which Harding let polluters walk away scot-free, leaving it to citizens like us to enforce the law.

WHITE WASHING CLEAR WATER PLACE

It's deja vu all over again.

The Press, the Business Journal, and Fox 17 all ran puff pieces on the DeVrieses' Clear Water Place project this week.  This is the same redevelopment of the old Monroe Avenue Water Filtration Plant that I've been calling "Clearwater Plaza" in these pages.  Not a mistake really.  "Clearwater Plaza" was the moniker for the previous plan to redevelop the filtration plant, and a grand and glorious vision it was.

Five years ago some of the Toxic Towers gang -- the owners of Dykema Excavators Inc. and Prein & Newhof Inc. -- put together an outfit called GEWT (the Global Enterprise for Water Technologies) to raise $30 million from the State of Michigan,  Michigan State University, and the Pew Foundation to hide the toxic landfill the Boardwalk developers had created at the filtration plant under a renovation of the site, re-named Clearwater Plaza, as a research center for "clean water" technologies.

An irony to be sure, but the benefit of the plan was that there would likely never be any further soil testing at the plant.  That's because the plant would not be sold to GEWT; it would be leased to it for 20 or 30 years.  So there'd be no bank financing involved that would drive the need (under federal regulations) for environmental testing of the plant that in turn would reveal the contaminated soil the Boardwalk developers dumped there.  Instead the poison would remain concealed.  (I have to thank Assistant Attorney General Mike Leffler for this insight.)

Clever plan, and the local media helped GEWT execute it by uncritically promoting Clearwater Plaza with puff piece after puff piece until the big gala to kick off the project in November 2000.  The Ambassador, Peter Secchia, had been recruited to lean on State Senator Ken Sikkema to shake the money tree and produce about $10 million in funding for the project from the Michigan Department of Environmental Quality (DEQ).  Professor Mackenzie Davis of MSU's engineering school had been gulled into bringing the university's support for the Clearwater Plaza project.  And local philanthropist Robert Pew had been targeted to donate the rest of the $30 million GEWT sought.

A lot was riding on the big event and all the hoopla the local media helped to churn for it.  But it went fizzle.  Why?  The feds ordered the DEQ to investigate reports that the Boardwalk developers had dumped 20,000 tons of contaminated soil at the filtration plant.  Although the Boardwalk developers were able to derail that investigation and escape prosecution (so far), the facade GEWT needed to raise funds for Clearwater Plaza project had fallen apart.  One by one, the DEQ, Davis, and Pew walked away from the project.

The odd thing was that after all the hyping of Clearwater Plaza, not one of the media outlets promoting it, especially the Press and the Business Journal, ever did a story to follow up on the collapse of GEWT.  Now we see the same sort of puffery again with the local media giving the thumbs up to the DeVrieses' Clear Water Place.  What makes this coverage promotional rather than news is that there is no mention of, literally, the dirt behind the story.  (See "Arsenic is Cool" for details of the latest environmental problem with the filtration plant.)

BLEKE RENEGES, BOOTS BUS DRIVERS

The Grand Rapids Public School system is currently in its worst fiscal crisis as students continue to flee the district for charter and suburban schools.  One of the remedies Bert Bleke, superintendent of the GRPS, has put on the table is privatizing the jobs of the 400 support staff -- the cooks, custodians, and bus drivers.  However, two weeks ago Bleke had promised the support staff that if they could come up with $1.9 million in wage and benefit concessions, he would look at how he would spare their jobs.

The support staff's union (which by the way is separate for the teachers' union) delivered to Bleke what he had requested.  But Bleke appears to have ignored the support staff five-million-dollar concession, because he immediately convened a private meeting last Friday with Kellie Dean of Dean Transportation Inc., a private bussing firm out of Lansing.  Although no agreement with Dean Transportation has been disclosed, it appears that Bleke is intent upon getting rid of the GRPS support staff, because on Saturday the staff's union reported that Bleke rejected their concessions.

Even the teachers offered to pitch in to spare the support staff their jobs by turning down their next raise, but to no avail.

The GRPS support staff is now fired as of June 9th without payment of each employee's accrued vacation and sick days, let alone severance.  Bleke, who swung the ax, will also be losing his job too after next year.  Well, not quite.  He'll be staying on as a paid consultant to advise the new superintendent.  So the school district's taxpayers will be blessed with two superintendents and no bus drivers!

I'm not quite sure how that makes sense.  I don't want to demogogue this, though I think it is raw deal for the working stiffs in the GRPS system to lose their jobs while teachers, principals, and adminstrators get raises.  Then there is the element of fair play.  Why tell the support staff they had a chance to keep their jobs if they made concessions, and then ignore them when they do?  If Bleke wasn't serious about that, then he should have lead on the support staff.

Yet in the end the GRPS must serve the taxpayer, and it is good that Bleke is willing to make significant changes to that end.  But he isn't willing to make any of the radical changes that would reform the school district and restore its viability.  For example, why doesn't he put the teaching contract up for an open bid just like he wants to privatize the support staff jobs?  That would be a tremendous money-saver.  Instead Bleke played it as safe as he could and, like most bureaucrats in a budget fix, balanced the books on the backs of those the public would least notice.

L.A.W. SOLVES CITY BUDGET WOES

Grand Rapids is broke.  The story a few weeks ago was that the City's expenses will exceed revenues by $100 million over the next five years.  Now City Manager Kurt Kimball, the squanderer of all the extra cash that had been flowing into City coffers during the past decade, has upped the figure to $135 million and has come up with only $60 million in budget cuts to offset it.

As it happens there exists a document in the City's files that could help Kimball with his budget woes.  L.A.W. found this document in a Freedom of Information Act request it had made of the City to disclose all public records related to the Berkey & Gay redevelopment project (now under the official moniker of "The Boardwalk", not so officially as "Toxic Towers") located on Monroe Avenue north of downtown.  The document is an application for a building permit the Boardwalk developers submitted to the City in October 2000 near the completion of the project.  On the application the developers stated that they had or were adding $150,000,000 in value to the project site.

One hundred fifty million dollars!*

Presently the City has assessed for tax purposes the completed Boardwalk complex at only one-tenth that amount, about $15 million (i.e., a state equalized value of $7.5 million).  As a lot of homeowners are familiar with, the assessor relies upon the value of improvements reported on a building permit application to jack up the City's tax assessment of a property.  So all that Kimball has to do is direct the City Assessor to do the same to the Boardwalk developers as done to any of us anytime we pull a permit to fix up the house.

That's fifteen to twenty million bucks more in taxes the City could be collecting from the Boardwalk developers over the next five years to split with the county and the schools.  Better than a hole in the head, folks!  Besides, why give Fifth Third Bank, National City Bank, Tom Beckering, and all the other well-heeled developers of the Boardwalk a de facto break on their property taxes when the ordinary property owners in town get nothing?

Click here to tell Mayor Heartwell and the City Commission to get on the ball and instruct Kimball to collect those taxes instead shutting down our pools this summer and firing firemen.

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* I know, dear readers.  One fifty million dollars is a huge sum and is unprecedented in this city for such a project.  But that's what they put on the app. And keep in mind I emphasized that they reported that figure near the end of construction.  That means the figure wasn't an estimate, because by that time the developers had knowledge of how much they had spent already and were likely to spend to wrap things up.