The Local Area Watch

CITY STONEWALLS BOARDWALK DISCLOSURE

Two weeks ago one of our intrepid readers did a little digging into our tongue-in-cheek solution to the City's budget crisis.  We had discovered that the developers of the Boardwalk project (the renovated Berkey & Gay furniture factory on Monroe Avenue) had submitted a building permit application stating that they were adding $150 million in value to the project.  That sum was clearly at odds with the subsequent tax assessment of the project at about one-tenth of that amount -- and so we slyly suggested that the City could raise new tax revenues by adjusting the assessment to the amount the developers had claimed to put into it.

Of course, we suspected the $150 million entry was a mistake.  Nevertheless, one of our reader pursued the matter with City Manager Kurt Kimball, who responded that the Boardwalk developers filed a statement with the City that they had invested only $20 million into the project and so accords with the $19 million tax assessment of the property.

We thank our reader for this information, because it is very interesting.  The Boardwalk developers' stated figure of $20 million is at odds with an earlier written statement they had made, through their spokesman Thomas Beckering, that they had invested $31.5 million in the redevelopment of the Berkey & Gay factory into the Boardwalk.  It is also at odds with the amount the developers would have had to report to their bankers to get $26.5 million in loans against the project.  (Federally-insured banks are limited to lending 75% of the value of commercial property.)  Therefore, it looks like the Boardwalk developers had understated to the City the amount they put into the project to get an improperly reduced tax assessment.

To confirm this, on May 5th I sent the City Attorney's office a Freedom of Information Act request for a copy of the Boardwalk developers' letter recording the $20 million figure.  Late last week Assistant City Attorney Daniel Ophoff responded.  You may recall that Ophoff is the fellow who destroyed City records to prevent them from being disclosed under one of our FOIA requests.  This time instead of destroying the requested document Ophoff denied its disclosure to me by claiming that he did not have to because of ongoing litigation between me and the City.

Michigan's FOIA law does permit this basis for denial, and there is a lawsuit against the City in which I am a plaintiff pending before Judge Redford in Kent County Circuit Court.  This is the hazardous waste dumping complaint.  While the suit does cite the Boardwalk (a.k.a. "Toxic Towers") as the source of the contaminated soil its developers dumped at the Monroe Avenue water filtration plant, the lawsuit obviously has nothing to do with the Boardwalk's tax assessment.  So, Ophoff is improperly using the hazardous waste suit as an excuse to obstruct my request for the developers' statement.  Once again, we have the City Attorney's office protecting the Boardwalk developers to the apparent detriment of taxpayers and residents.

ENCORE: COINCIDENCE OR CLAN?

[This article originally appeared on March 24, 2005.]

Denny Heffron is the chairman of Kent County's Agricultural Preservation Board.  The Board's big mandate is to find and administer funds to buy the development rights to farmland and thereby preserves such lands as farms.  Basically, the idea is to give a farmer a wad of cash to keep farming his land in exchange for a promise to not sell his farm to developers.

So far the Kent County Board of Commissioners has refused to throw local tax dollars into this program, which has upset some preservationists.  This has sent Heffron looking to the feds and private sources for funds.  In the works is an application to for over $780,000 in federal grants to match about $870,000 in private commitments to secure the development rights of up to 25,000 acres of Kent County farmlands.  (That's a huge amount of land to tie up; larger than any one of the county's 21 remaining townships.)

Whatever the merits of this preservation program and using federal tax dollars to pay for it (after all, what exactly do taxpayers get out this?), I do note that Heffron is himself a farmer in Grattan Township.  I also note that two of the farms slotted for this program are also located in Grattan Township owned by another fellow with the last name of Heffron.  Does Chairman Heffron have a conflict of interest?  I don't know, but there are enough obvious coincidences here between who has control over the preservation funds and who will receive them to a raise a question that should have been answered already.

ENCORE: FARM FUND FANS FUME

[This article originally appeared on March 11, 2005.]

The calm facade of the Kent County Board of Commissioners was roughed up a bit when ousted farmland preservation board members Bill Hirsch and Susan Lovell rejected gift clocks the commissioners gave them as a token of appreciation for their service.  Explaining their protest, Hirsch and Lovell fumed that the commissioners have refused to fund the raison d'etre of the preservation board -- a program to freeze out non-agricultural development of about 10% of the county's remaining agricultural acreage.

This program was a bone the County Commission threw to preservationists who have been opposing the tide of residential development rolling out from Grand Rapids and its suburbs into the outlying orchards and farmlands of Kent County.  The fundamental problem the preservationists faced is that many farmers were better off selling their lands to developers than to continue farming it.  The farmland preservation program was supposed to be the solution.  It would buy a farmer's development rights to his land and let him continue farming it for the purpose of preserving it as a greenspace.

Nice deal.  The county pays you a bonus to keep doing what you're doing with your land.  Except that the County Commission didn't mandate any funding of the preservation.  Late last year, the commissioners cut off any further discussion of the county funding the program.  Hence, the raspberry Hirsch and Lovell gave the County Commission for not letting them tap the taxpayer to carry out their particular vision of how the county should be developed.

Well, at least the County Commission made a good decision to not fund the program.  Let those, like Hirsch and Lovell, who are passionate about preservation, fund it and raise donations to it instead of browbeating the taxpayers' representatives.  After all, the program was set up to receive voluntary contributions.

ENCORE: THE MARCH OF THE WHITE ELEPHANTS

[This article originally appeared on March 1, 2005.]

The Van Andel public museum, the DeVos convention center, the Van Andel Research Institute, and now the clamor for Michigan State University to re-locate its lackluster College of Human Medicine in town.  And so the march of the white elephants continues.

The Ambassador, Peter Secchia, is the most recent champion of this $600 million medical school boondoggle.  In the Saturday edition of the Grand Rapids Press, the MSU alumnus encouraged us to "go for it!"  He argued that there's not just the dollars that MSU's medical school would (without explanation) contribute to the local economy, but also MSU's "plant research grants are big" and its veterinary school is one of the best "with increasing research dollars available".  The Ambassador also enticed us with the prospect that if the re-located medical didn't get bogged down with training new doctors it could subordinate itself to the Van Andel Research Institute for clinical research trials to bag "large federal grants".  [My emphasis throughout.]

Of course, if a medical school would be as lucrative as all that, one wonders why private investors are not lined up to make it happen.  The Ambassador neglects to mention either the school's likely price tag or how it would be paid for.  But then the Ambassador was salesman in his previous life, and going from huckster to booster isn't a great leap.  Both require mastering the art of accentuating the positive, especially when the positive is positively not there.

So, our modest request of the Ambassador is to answer two questions about bringing MSU's College of Human Medicine to Grand Rapids:

[1] Who pays?

[2] Who benefits?

Recall the white elephants we already have here in town.  They are enshrined as shining examples of the Grand Rapids "way" -- i.e., public-private partnerships that make things happen.  What gets missed in all this feel-good frippery is that those who pay are not those who benefit.  The private partner collects the cash while the public partner (a.k.a. the taxpayer) picks up the bill in exchange for the dubious consideration of holding title to the white elephant.

Let's not get suckered again.

ENCORE: MY CITY, MY PIGGY BANK

[This article originally appeared on March 1, 2005.]

The other day the Ambassador, a.k.a. Peter Secchia, assured White House political advisor Karl Rove that he could safely ignore Grand Rapids Mayor Heartwell's call for "rebellion" against cuts in federal largesse to urban coffers.  Well, I think all of us already knew we could safely ignore the excitable Rev. Heartwell.  In fact, I'm certain that the Bush Administration was so sure that it could ignore Heartwell that no one listened to him in the first place.

The Ambassador's call to Rove was interesting because he claimed Grand Rapids as "my city".  Like most of the self-proclaimed movers and shaker who strut about town, the Ambassador does not actually live in the city.  I'm not even sure if he has any offices in the city.  The headquarters for his company, Universal Forest Products, are perched in the 'burbs outside of town.

Nevertheless, Grand Rapids, whether it likes it or not, has always been good to the Ambassador.  He seems to have found luck in downtown Grand Rapids where periodically some public entity would announce its plan to move its offices to a building there that he just happened to have acquired an interest in.  To be fair we should note that the Ambassador has done good works, like a residential hall for Grand Valley State University's downtown campus or Millennium Park on the banks of the Grand River southwest of town.  But then he finagled an egregious extension of a Renaissance zone to encapsulate one of his downtown projects, so maybe it's only just that we get back some of the taxes he has avoided.

As we know from his call to Rove, the Ambassador would disagree that's how his piggy bank -- I mean, his city -- sees things.  No doubt he prefers us to support the type of public largesse he receives than the type Heartwell wants to control.  So long as both support throwing away taxpayer dollars on white elephants like the new Convention Center, maybe it's time for the piggy bank to rebel against everyone who wants to shake dollars loose from it.

ENCORE: FIFTH THIRD STILL ON THE SKIDS

[This article was originally published on April 15, 2005.]

Fifth Third Bancorp of Cincinnati, the 800-hundred-pound gorilla of banking in Grand Rapids is still on the downward slide, in the wake of gobbling up Old Kent Bank four years ago.  After announcing fat bonuses for top executives, Fifth Third revealed that profits for the bank collapsed 5.8% during the past quarter.  The decline has been officially attributed to expenses Fifth Third incurred from its recent purchase of a Florida bank.  However, Fifth Third CEO George Schaefer indicated that this is part of longer term troubles the bank has yet to correct when he admitted to shareholders this week, "Revenue growth continues to be below our expectations.  It's safe to say this won't be turned around overnight."

We know from Fifth Third's botched acquisition of Old Kent that it continues to hemorrhage small business and retail customers with its obnoxious fees on everything and lackluster customer service.  We also know that Fifth Third has has trouble penetrating the Detroit area, the crown jewel of the Michigan market, which its acquisition of Old Kent was supposed to help capture but has failed to so far.  Is this symptomatic of broader problems within the big bank?

Maybe, because Schaefer insists the solution to Fifth Third troubles is to open more branches and hire better people.  Of course, there could be deeper dysfunction in the bank.  Fifth Third was recently investigated and punished by the Federal Reserve for the way it booked the assets it acquired from Old Kent and later was forced to divest itself of its trust division.  All that put a real crimp in Fifth Third's running-on-water strategy of devouring other banks quicker than its structural and management problems could surface.  (Click here and here for related stories.)

Meanwhile, Fifth Third continues to reveal its dread over a potential $30-40 billion in penalties for violations of state environmental laws by its development company 940 Monroe L.L.C., the developer of the Boardwalk project in downtown Grand Rapids, which Fifth Third inherited from Old Kent.  On March 28, 2005, Fifth Third intervened in a motion before the Michigan of Court Appeals to argue on behalf of the developer and its contractors that they should not be held liable for their violations.

One must wonder if other Fifth Third acquisitions are not similarly plagued.

ENCORE: GENERAL GEORGE

[This article was originally published on March 7, 2005.]

Grand Rapids Mayor George Heartwell pumps and preens himself in Friday's Press with this comment:  "What mayor wouldn't fight to protect his city, even if he has to wage a battle against the White House?"

The threat General George poses the White House is about as large as a flea on one of its SAM battery radar screens.  Of course, he knows that, hence the amateurish moral posturing of his question.  Even so, let's answer that question seriously.  What mayor wouldn't fight for his city?  The answer:  George K. Heartwell.

While General George lobs empty threats against the White House, he refuses to take on his own City Attorney's Office that has blocked all discussion of resolving the Toxic Towers dumping scandal (for background check here and here).  The City taking the side of the angels in this battle could mean the recovery of millions of dollars in fines and penalties from the polluters for the taxpayers of Grand Rapids.  Instead, the City's current alliance with the polluters puts it in the position to be assessed these same fines and penalties.

To give you some idea of the magnitude of the potential penalties, under state law alone, the polluters face a fine for just one truckload of the poison (that they dug up at The Boardwalk project site and then dumped into the tanks of the old Monroe Avenue Water Filtration Plant) that would cover the City's entire budget deficit for a year!  Eight hundred of these illicit transports of hazardous waste are recorded on surveillance videotape that has been submitted as evidence to the Kent County Circuit Court, the FBI, and the MDEQ.  You do the math, dear readers.

Yet, General General flays away at the White House instead taking on a battle that he can actually win for us.  He could take up the cause of the residents exposed by the polluters to The Boardwalk's poison and the taxpayers who have an opportunity to make the polluters pay.  But he won't.  The City Attorney's Office has ordered him to stand down in this battle, and so General George has taken leave from the fight.

E-mail the mayor today and ask him why he is letting the City Attorney's Office side with the polluters.  Better yet, tell General George to do his job and order the City Attorney's Office to represent us, the residents and taxpayers of Grand Rapids, instead of burying skeletons for the last administration.  The lawyers in that office -- Daniel Ophoff (and more here and here), Janice Bailey, and Catherine Mish -- work for you!  Not for ex-Mayor Logie and his clients.  Remind General George of that.  If he won't listen, tell your commissioners to whip the City Attorney's Office into shape.

ENCORE: WHAT'S GOVERNMENT GOOD FOR?

[This article was originally published on August 18, 2004.]

I read three stories in this week's edition of the Grand Rapids Business Journal that made me wonder if there is anything government is good for.

The first story was about a "Cool City" grant Gov. Granholm bestowed upon some contraption called "The Uptown Advisory Council", one of those psuedo-neighborhoods only a city planner could devise. (I think I can speak with some authority as to whether there is such a thing as "Uptown" in G.R. as I only live a few blocks away from where this community is supposed to exist.) Anyway, that's not the important thing. Rather it is the absurdity of letting the government take our tax dollars and then pick the winners and losers in the development game by deciding whom it'll parcel out our money to. This is not to say there are not some fine things going on within the so-called Uptown district. In fact, my wife has discovered a delightful bakery over there. But these good things succeed because they make good business sense, not because they appeal to some politician's sense of what is "cool".

The second story was another tale of the government picking winners and losers. This time it is the announcement of a tax subsidy from the State of Michigan for the redevelopment of the Monroe Avenue Water Filtration Plant. Yes, that's right, the very place where the Berkey & Gay developers dumped most of the poison soil that they had excavated from the old furniture factory site. Now the state is not only content to let that poison fester there, it's going to award the Filtration Plant's new owners with taxpayer dollars to build residential apartments on top of it!

The third story was a piece about the poor ol' Grand Valley Metro Council, that tax-dollar gobbling embryonic layer of regional government, not getting enough bucks from the citizens to give its bureaucrats the benefits they deserve. Therefore it is lobbying our elected representatives to finagle the property tax system to send more of our dollars its way.

Of course, the idea never occurs to anyone that maybe our government shouldn't be taking money from us in the first place to seed "cool" development, build housing atop toxic waste, and fund benefits for people who are supposed to but do not rationalize all this nonsense. And if government must do these things, why must it come out of our hide, when it can collect $20 billion in fines from environmental criminals caught red-handed on videotape?

That's right. The State of Michigan has in its possession videotape evidence of the Berkey & Gay developers releasing tens of thousands of tons of hazardous waste into the environment. State laws allow the state to collect $27,500 a day for each release of hazardous waste that goes unreported and uncorrected by the polluters. A conservative tally of the fines is now $20 billion.

So how about the polluters pay for "cool" development, new apartments, and benefits instead of us? Maybe that way the government would be good for something.

ENCORE: AVENUE OF ASH

[This article was originally published on March 25, 2005.]

Fly ash, that is.  Over the past ten years there have been a number of construction projects along Monroe Avenue between Lyon and Leonard Street.  The convention center, Sixth Street Bridge park, the Wolverine Brass Building, and the Boardwalk to name some of them.  Most of them entailed the excavation and removal of the underlying soil, and there lies a problem.

Monroe Avenue used to be called Canal Street for a reason.  In the nineteenth century there was a canal that ran along the east bank of the Grand River to circumvent the rapids that used to churn the waters until the construction of the Sixth Street dam.  As the heyday of the lumber barons passed and furniture manufacturing became king in Grand Rapids, the canal and the low spots along the east bank were filled in to create a factory district along Monroe Avenue.  The fill used in that era was industrial waste that included materials like fly ash.  These wastes were contaminated with high levels of arsenic, mercury, and lead.

Atop of all this hazardous waste, the factories along Monroe Avenue dumped their wastes.  Some of these factories, like the old Berkey & Gay furniture factory which was renovated and re-opened as The Boardwalk in 2001, had courtyards in the middle of them.  These were open-air fields into which painting, staining, and varnishing wastes were dumped onto the ground or into pits.  A century of industrial pollution added to the earlier contamination and made the soil along Monroe Avenue extremely toxic.  In some places, according to assessments by the Michigan Department of Environmental Quality (MDEQ), it was even dangerous to breathe air that was exposed to this soil.

Because of this, the properties along Monroe Avenue were deemed to be brownfields -- i.e., severely contaminated -- and developers could not obtain financing to redevelop them.  The reason was because a new owner of a brownfield could be held liable for its contamination even though he did not cause it.  The perverse of effect of this draconian liability was that developers and financiers avoided these urban brownfields and focused instead upon developing suburban and rural greenspaces.  So, in 1994 the Michigan legislature changed the law concerning liability to encourage the redevelopment of moribund brownfields.  Now, the new owner of a brownfield would not be liable for its contamination provided that he does nothing to cause its release into the environment.

The new law worked, and the redevelopment of Monroe Avenue began.  At the same time, the MDEQ made an informal policy decision that it would not actively enforce the new law in urban areas, which still imposes requirements upon brownfield developers to handle contamination with "due care" to prevent people and the environment from being exposed to it.  Thus, corners began to be cut by developers.  Instead of applying for brownfield tax credits to help pay for the cost of lawful isolation or removal of contamination, they skipped that expense altogether by treating brownfield soil as though it were unregulated clean fill.

The developers of The Boardwalk project at 940 Monroe Avenue took full advantage of this lax enforcement regime.  The project site sat atop the most severely polluted soil along Monroe Avenue.  Its soil was laced with two dozen hazardous chemicals and metals in concentrations so severe that the soil was actually dangerous to touch.  (See "Poison" for details.)  Nevertheless, the Boardwalk developers treated the material as though it were clean fill, deliberately and recklessly exposing their workers, their neighbors, and the general public to the toxic wastes in it.  In the end they dumped about 20,000 tons of this waste into the empty tanks of the nearby Monroe Avenue Water Filtration Plant and another 6,000 tons at undisclosed sites in the Grand Rapids vicinity.  (To give you an idea of how much waste this is, if piled in one place it would form a cube nine stories tall!)

After several complaints about this illegal dumping of contaminated soil, the MDEQ under pressure from the U.S. Environmental Protection Agency finally stepped in to investigate in November 2000.  Unfortunately, the MDEQ's investigation was hindered by false affidavits, phony test results, and a now-disavowed expert environmental report.  The matter now lies in Kent County Circuit Court.  Fortunately, the news of the MDEQ's investigation stopped this illegal dumping trend from snowballing.  Immediately afterwards, the Convention and Arena Authority assured the public that that its contractors were properly handling the contaminated soil underlying the site of the new DeVos Place convention center and that the contractors have obtained an insurance policy to guarantee their compliance.

Less fortunate was the decision of the Grand Rapids Press to pull the plug on its new printing facility slated for construction on Monroe Avenue immediately north of I-196.  Now that the jig was up and contaminated soil could not be passed off as clean any longer, apparently brownfield tax credits were insufficient incentive for the Press to rehabilitate that particular brownfield.  So the Press built its new plant on a greenspace out in Walker.

(Just one more reason Press publisher Danny Gaydou and editor Mike Lloyd have been loathe to give anything but passing coverage to Toxic Towers dumping scandal.)

That's today's history lesson, kids!

ENCORE: PICKING WINNERS AND LOSERS

[This article originally appeared on April 14, 2005.]

While the City Commission is busy deciding which hoteliers in downtown G.R. will be the winners and which the losers, Governor Granholm is engaged in the same folly at a much grander scale.  On Tuesday Toyota Motor Corporation announced a deal with Guv Jen to buy 690 acres of state land south of Ann Arbor for $11 million to build the company new North American research and development center in exchange for receiving from the state a $38.9 million tax subsidy.

Guv Jen justified the special hand-out to Toyota because the company's new R&D center will employ 400 people and create another 300 "indirect" jobs in the local community.  The nearly forty million tax subsidy is in the form of credit against the state's convoluted single business tax.  No doubt the SBT, as it is commonly referred to, is a disincentive for businesses to start up or re-locate or grow in Michigan.  If the governer can see benefit of a special reduction of this tax for Toyota, because it will produce jobs and prosperity, why not cut the taxes for all businesses?

Simple answer:  Doing that would take away her power to pick winners and losers.  Whether or not that's a power we should let our elected officials have is one thing.  As a practical matter, do our pols make the right choices?  Ever since the State of Pennsylvania recruited Volkswagen to build a plant there in the late '70s, the practice has been to give big tax breaks to get big companies to build big plants in our backyards.  Guv Jen has followed suit with the Toyota deal.  Bad choice.

Study after study shows that small business is the engine of job growth in this country.  Meanwhile, tax breaks for the big guys seldom repay the taxpayers' "investment" in them.  For example, where's that Volkswagen plant in Pennsylvania now?  Shuttered a long time ago, folks.  So, it's better policy -- heck, it's just plain fair -- to cut business taxes across the board to stimulate growth (if that's the objective) than to select favored companies to receive targeted tax breaks and subsidies.  But sound business tax policies don't garner the headlines like a hand-out to Toyota does when Guv Jen is ready to mug for the cameras.

ENCORE: "COOL CITIES" NOT COOL

[This article originally appeared on March 23, 2005.]

I've written before on the foolishness of Gov. Jennifer Granholm handing out $100,000 grants to turn places like Grand Rapids into "cool cities" .  Guv Jen's inspiration is that if we turn G.R., Kalamazoo, and Livonia into little Manhattans, then these towns will be flooded by hipsters with dynamic companies following to hire them.  Hmm.  The cause-and-effect sounds a little dubious to me.  At least Guv Jen has the excuse that it's not her idea.

Like a lot of ideas that enamor policy wonks and impoverish the taxpayers, this one is an ivory tower product unmoored from reality.  Awhile back Prof. Richard Florida of Carnegie Mellon University invented the notion of a "creative class" that was the economic and cultural engine for high-growth cities during the 1990's.  He thinks that if humdrum cities cultivated or imported their own "creative classes" -- i.e., became "cool" -- they would evolve into economic dynamos as well as hip places to live.  (An aside:  I note that from the pictures like the one above displayed at the "Cool Cities" website that the cool are neither fat, old, or ugly.)

One big problem with Prof. Florida's (and Guv Jen's) "cool city" scheme:  There's no truth to it.  During the past twenty years it has been the uncool cities of North America that have created more jobs than the purportedly cool ones by 60 percent.  Boring things like good government and low taxes were the best predictors of a city's potential for job growth.  In fact, the latte-lappers of the "creative class" were mostly found in economically moribund cities.

For more about the fallacy of "cool cities", I recommend Steven Malanga's recent article published at City Journal's website.  Finally, a tip of the hat to John LaPlante of the Mackinac Center for Public Policy, whose column in Monday's edition of MiBizWest is a solid reminder of why we shouldn't let the wonks play with our tax dollars.

A.W.O.L.

Dear readers,

Your executive director will not be minding the store (at least not too closely) this week.  However, I have arranged for encore editions of articles that I think you'll find interesting to pop up fresh throughout the week.  Your e-mails and comments are still welcome while I am gone, and Mary Hines, our office manager, will still be here to take your calls.  In the meantime, I hope you enjoy your visit here.

Best regards,

Bill Tingley, Executive Director

THE PIG IN THE PYTHON

The story is that public school administrators are giddy about the improved scores for this year's MEAP test.  The MEAP test measures the progress of public school students in reading and writing, which the federal government relies upon to determine if local districts are in compliance with the Bush administration's "No Child Left Behind" program.

Little wonder the scores were an improvement.  The Michigan Department of Education boosted the pitiful results of the writing portion of the MEAP test on the basis that it was too hard and therefore an unfair measurement of progress.  How did the Education Department conclude the writing test was too hard?  The scores were too low!  Ah, the tidiness of circular reasoning.

Setting aside the manipulation of the test scores, freshly re-elected Grand Rapids School Board president David Allen took pride in what the revised MEAP results showed.  For the first time in a generation, the school district's fourth graders were above the state average in writing ability.  Allen indicated that this boded well for the future, noting the upward bump in performance should carry on to the higher grades in the future like "a python swallowing a pig".

Unfortunately forty years of intensive efforts, beginning with the Head Start program, to improve the education of young children has shown the same dismal pattern of gains made early on petering out as children grow older.  The foundation for educational success has, as always, rested upon parental involvement that makes demands upon the child.  Without that foundation, little that the schools do to improve student performance endures.

There's no secret about that.  However, that key to success doesn't require a lot of spending by public school bureaucrats; besides, who wants the headache of pointing fingers at disengaged parents?  It doesn't pay the educrats to do so, so they won't as sure as there's no pig in the python.

POOL PROFITS PUZZLE TORMALA

Second Ward Commissioner Rick Tormala stated Tuesday that he was surprised that the proponents of a private plan to pay for the operation of City pools expected to profit from their efforts.

A pair of marketing flacks, Greg McAleenan and Joe Jones, presented the City Commission with a plan to raise $1.3 million to operate the City's pools this summer through sponsorships by local businesses and organizations.  The pitchmen offered their services in exchange for a 10% commission on the money raised.  In the end the City Commission agreed provided that McAleenan and Jones raise enough to keep at least three of the City's six pools open.

Tormala complained:  "I said last week I'm tempted to take money from the devil to keep the pools open, not give money to the devil."  Well, I know McAleenan and Jones dabble in the dark arts of hucksterism, but I think their public-spirited proposal qualifies these gentlemen as something more than "devils".  Tormala went on further with his astonishment that these two actually wanted to be compensated for their efforts.

Actually I'm a bit astonished by Tormala's astonishment.  He's usually more hard-headed and practical-minded than this.  Perhaps there are some problemmatic details in McAleenan's and Jones's request for compensation that properly concern the commissioner, but it is not apparent from what is presently known.  The bottom line is if the pools can be kept open through private sponsorship, there's nothing wrong in principle in compensating the people who make that happen.

DEAN SLICES AND DICES BUDGET

Grand Rapids City Commissioner Robert Dean has the right eye for spying the plumpest parts of the City budget as he argued on Tuesday for spending cuts that City Manager Kurt Kimball failed to propose.  On the top of Dean's list is the top-heavy staff under Kimball's supervision.  The third ward commissioner wants to ax the salaries of Kimball's three top lieutanants by $100,000, reduce the salaries of department heads and deputies by 15%, and eliminate completely some of the fluffier sinecures at city hall including the historic preservation specialist and the sign fabricator.

Dean also wants to lop off $900,000 from the public museum's annual subsidy of $1.9 million.  Good move.  The museum director has been bragging about how well he has financially managed the place.  Let's see if he really has what it takes to make the place stay out of the red.

So, dear readers, give kudos to Commissioner Dean for being willing to slaughter the sacred cows of Kimball's proposed budget.  He'll need all the support he can get, because General George and at least three other commissioners don't seem to get it yet that the City has to get back to concentrating on the basics.

REVERSAL OF REVERSAL REVERSED

Good news, folks!

As you may recall, the Michigan Court of Appeals did an odd thing earlier this year.  Last February the appellate court, on its own initiative, vacated its June 2004 reversal of the Kent County Circuit Court's dismissal of our hazardous waste complaint against the City of Grand Rapids and the Boardwalk developers.  (We had alleged that the City sold the Monroe Avenue Water Filtration Plant to the developers in a sweetheart deal to use as a cheap -- and illegal -- dump for the contaminated soil they had to remove from the Boardwalk project site.)  The effect of this weird decision, if it were to stand, was to toss our complaint out of court.

Even more infuriorating about the appellate court's new decision is that we had acted upon its original decision to resume the case in the Kent County Circuit Court, where it had recently passed muster under the new rules for environmental citizen suits handed down last summer by the Michigan Supreme Court.  A lot of time and money spent in a good cause was about to go down the drain.  So, we asked the appellate court to reconsider its decision.

Yesterday, the Michigan Court of Appeals announced that it agreed with us and reinstated our case.  In short, it reversed its reversal of its reversal.  So we are now back on track and our hazardous waste complaint against the City and the Boardwalk developers moves forward.

CORRECTION! CORRECTION! CORRECTION!

Last week, folks, I wrote about the City Commission approving the big tax subsidy for Amway-billionaire Rich DeVos's Marriot Hotel project in downtown.  At the end of the article I slapped around the Grand Rapids Press for biased coverage of this issue:

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.

Press report Chris Knape alerted me to an error I made.  On April 20th the Press did run a short article reporting the City Commission's approval of the tax subsidy for the DeVos project.  I thank Chris for taking the time to advise me, and I apologize to the Press and to you, dear readers, for the mistake.

BIG LIGHT FIGHT

This week General George and the gang (a.k.a. the Grand Rapids City Commission) voted on the big lights for the DeVos Place convention center.  A little background first ...

Awhile back the Grand Rapids Press apparently thought there wasn't enough news in town to report, so one of its reporters decided to create some by complaining to the City's zoning department that big lights spelling out "AUTO SHOW" and other events along the western face of the DeVos Place convention center were in violation of the city ordinance on signage.  City zoning official Sue Thompson responded by ruling that the convention center lights were in violation.  Later the dabblers on the Planning Commission, like Gabriel Works, barked that the lights offended their delicate sensibilities.

Finally the City Commission stepped in to restore commonsense.  On Tuesday they gave the big lights preliminary approval in a 5-2 vote.  The lights are intended to attract the attention of drivers a quarter-mile away on the US-131 expressway and are an important part of the advertising of key events at the convention center.  Now that our fine public officials have stuck us taxpayers with this white elephant, the least they can do is get out of the way of it trying to turn a buck to pay for itself.

However, acting in the interests of their constituents seems lost upon the sour Lynn Rabaut, 2nd Ward commissioner, who put her personal tastes ahead of the taxpayers by denouncing the big lights as a "blight", and upon the sometimes confused James Jendrasiak, 1st Ward commissioner, who can't seem to separate opposition to subsidizing another DeVos boondoggle with helping ease the burden the boondoggle has already placed upon the taxpayers.  These commissioners cast the dissenting votes.

General George (a.k.a. Mayor Heartwell) actually made some sense in his support for the big lights.  He argued that they were necessary to bring in the money needed to pay for the taxpayer-owned convention center.  Even though the General voted on the right side of this issue, it must be said that he should not have voted at all because he has a seat on the governing board for the convention center.  It's a conflict of interest, plain and simple once you pull back the crazy-quilt of semi-independent public authorities that blanket downtown Grand Rapids.  However, the problem with these authorities -- i.e., the DDA, the SmartZone, Monroe North TIFA, etc. -- is another story to be addressed soon.

ENCORE: AMWAY, WINDQUEST, AND REAL BUSINESS

[This article originally appeared on March 10, 2005.]

The first signs that Dick DeVos, son of Amway-founder Rich DeVos, may not be able to count upon a united West Michigan base for a 2006 run for governor appeared publicly in the form of a column CPA Paul Hense wrote for this week's Grand Rapids Business Journal.

While Hense generously (and incorrectly) credited Dick Jr. and his family with doing good for us in the Grand Rapids area, he wasn't so generous in affirming Dick Jr.'s bona fides as the tribune for the Republican core of small businessmen.  He cites Dick Jr.'s inherited wealth as the problem with making the connection to this important constituency, because it has insulated him from the hard financial realities small businessmen had to meet to grow and sustain their companies.

There's probably something to that, but the fundamental problem is more serious than that.  To succeed over the long run, a businessman has to offer a service or a product to his customer that has real value.  In this regard, the endurance of Amway was a fluke.  While manufactured products existed at its core, it profited from exploiting the dreams, greed, and foolishness of ordinary people with sales kits, promotional materials, motivational tapes and books, and a noxious reduction of Christian faith to a "get rich quick" creed.  Because the value of what Amway sold to its "distributors" (i.e., customers) was soon discovered to be non-existent by them, Amway had to keep finding keep new marks (ahem, I mean, customers -- wait, I mean, distributors) to replace old ones.  Burning through customers is a tough way to stay in business, and it's a soulless one too.

That's why Amway, though legal, has never been held in very high regard in the small business community.  It succeeded until its dismantling by inverting the principles businessmen must embrace for long-term success.  Evidence of the perverse nature of Amway is here:  If one looks at the history of Dick Jr.'s Windquest, originally a venture capital fund for investment into manufacturing, and notes that it now nothing more than a modest metal-shelving concern, it would appear that the Amway experience hasn't been a useful one for learning the ropes of real business.

So Hense is properly dubious of Dick Jr.'s resonance with small businessmen.  There's no there there.  More interesting, however, is not just the failure of Amway as a respectable business model, but the black hole Amway's actual failure created in the middle of our entire community over the past decade.  Keep an eye here for that story.

ENCORE: THE AMBASSADOR SEZ “HANG ‘EM HIGH!”

[This article first appeared on April 21, 2002.]

Commenting on the unfolding disgrace of boardroom thievery in Corporate America, former Ambassador Peter Secchia wants us to know that he thinks these crooks should be thrown in jail. Criminal prosecution may well be in order for those corporate directors and officers who broke faith the shareholders they were hired to serve in order to line their pockets with ill-gotten gain.

Contrary to the shared misconception of both the bien pensant compassion-mongers and the “greed is good” masters of the universe, the free market is sustained not by the law of the jungle but by the rule of law. It is our trust that the law stands behind the bargains we strike, the contracts we make, and the obligations we incur that lubricates the machinery of the free market. Without the law we would have nothing more than the “caveat emptor” of the bazaar rather than the sophisticated capital markets that fuel the businesses that deliver a wealth of goods and services to us.

So, yes, those corporate malfeasors who breached our trust must reckon with the law. Let us hope that the Ambassador, who was a director of Old Kent Bank [now Fifth Third Bank], is just as demanding when the role played by bank insiders in the 25-million-dollar Toxic Towers fiasco comes to light.

PERJURY

Last week Judge Dennis Kolenda of the Kent County Circuit Court dropped the hammer on a man who had lied under oath in a murder case and sentenced him to prison for nine to twenty-five years for committing perjury.  Good.  Our judicial system is rife with perjury because prosecutors are loathe to bring perjury cases like this one.

For example, the Kent County prosecutor has declined to bring perjury charges against one of the River Rats, Robert Wardrop.  Wardrop had made under oath false statements in Kent County Circuit Court, which helped the Toxic Towers developers dump 20,000 tons of contaminated soil at the Monroe Avenue water filtration plant (see article below) and another 6,000 tons elsewhere in the Grand Rapids vicinity.  This was confirmed in July 2003 when the court formally found that Wardrop's evidence was false.

Even though Wardrop's false statements under oath abetted grave violations of both state and federal environmental laws that exposed hundreds of innocent persons to toxic concentrations of hazardous substances, including arsenic, lead, and mercury, the Kent County prosecutor has refused to act.  So, I don't know what it takes to get the prosecutor off the dime when it comes to perjury, except that a deliberate assault upon the health and the safety of the public doesn't do the trick.

CITY SAYS ARSENIC IS COOL

Last Tuesday the Grand Rapids City Commission blessed without debate a request for a government subsidy for Clear Water Place.  As we reported a couple of weeks ago, the DeVries Company (owned and operated by Ed DeVries and his son) is redeveloping the old Monroe Avenue water filtration plant as Clear Water Place for commercial and residential uses and is seeking tax dollars from the state's "Cool Cities" program to decorate the facility's foyer.

Clear Water Place is an ironic moniker because the "Toxic Towers" developers dumped about 20,000 tons of arsenic- and lead-laced dirt there during the redevelopment of the nearby Berkey & Gay furniture factory into the Boardwalk complex.  (To give you some idea of how much dirt that is, it is the equivalent of an eight-story high cube.)  Of course, none of this history saw the light of day in either the application for this taxpayer subsidy nor its consideration by the City Commission.

Also hidden from the public's view throughout this process is how the City Commission shafted the taxpayers in the original sale of the filtration plant.  When the City Commission put the filtration plant up for sale, it rejected a bid from the DeVrieses for $600,000 and accepted in February 1999 a $400,000 from Dykema Excavators Inc., a longstanding contractor for the City with strong ties to officials.  Dykema Excavators, as one of the lead contractors for the Boardwalk project*, then used the filtration plant as an unlicensed toxic landfill for the Boardwalk's contaminated soil.  Once it was done with that, Dykema Excavators then flipped the polluted property to the DeVrieses.

So the DeVrieses wound up with the filtration plant in the end, except that City taxpayers:  [1] Lost $200,000 for not selling it to the DeVrieses in the first place, and [2] may end up paying for any liability the City has for letting Dykema Excavators use the filtration as a hazardous waste dump.

Little wonder the City Commission tried to sweep under the rug yet another taxpayer favor for the filtration plant.

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* In fact, James Dykema, one of the principles of Dykema Excavators Inc., has a stake in 900 Monroe L.L.C. and 940 Monroe L.L.C., the development companies that jointly own and operate the Boardwalk project.  He holds that interest through a Michigan corporation called DMAC Inc.

ELECTIONS TOMORROW

Just a reminder, folks.  Tomorrow, Tuesday May 3rd, is election day for school boards and millages.  State law has eliminated the "ambush" elections that public school districts would repeatedly hold at odd times until a millage increase or bond proposal got passed.  Now all elections must be held on the same day once a quarter.  Also, polling stations for school districts votes must be the same as the regular places for general elections.

So, they've made it easier for us who want to participate in these elections. If you know who and what to vote for, readers, get out and pull the lever!  If you haven't the faintest idea, don't bother -- stay home.  Ignore the conventional wisdom regarding voter participation.  Despite what the do-gooders say, an uninformed vote is one best left uncast.