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City Spends $8 Million on Theater Sells It Eight Years Later for $135,000
Michigan Capitol Confidential ^ | 9/18/2012 | Tom Gantert

Posted on 09/20/2012 7:00:45 PM PDT by MichCapCon

Eight years after the city of Pontiac spent $8 million renovating a theater that city officials say never reopened, the city sold it to a developer for $135,000.

Pontiac Emergency Manager Louis Schimmel said the deal is expected to be completed within two weeks.

City documents show the theater, which was sold as part of the city’s plan to cut expenses, was projected to cost the city about $135,000 in 2012-13. The theater opened in 1921 and has been owned by the city since 1986. The sale price of $135,000 was more than the appraised value of the theater, said Joseph Sobota, the city's director of the Department of Community Development.

A 2004 city of Pontiac financial report said $10 million was planned on renovating the theater. Sobota said the renovations cost $8 million.

Schimmel, who was appointed as the city's emergency financial manager in September 2011, said he saw the theater recently and couldn't see much of a benefit for the millions that were spent on renovations.

"It doesn't look like they spent $100,000, let alone $8 million," Schimmel said. "How the money was spent was hard to see."

Leon Drolet, chairman of the Michigan Taxpayers Alliance, said there should be an investigation into how the $8 million was spent.

"If this happened in your house, if you paid millions of dollars on upgrades you couldn't find, you would be suing the renovator," Drolet said. "The problem is there is no one who does that when government is involved. There is no accountability when government rips you off. No one is evaluated or held accountable for wasted funds. The only show that keeps going on is the rip off of taxpayers. That is the show that never closes."


TOPICS: Government
KEYWORDS: spending

1 posted on 09/20/2012 7:00:50 PM PDT by MichCapCon
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To: MichCapCon

Will that bring down property taxes there?


2 posted on 09/20/2012 7:05:36 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: MichCapCon
$10 million was planned on renovating the theater. Sobota said the renovations cost $8 million.

By statist arithmetic they made $2 million on deal.

3 posted on 09/20/2012 7:06:01 PM PDT by DManA
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To: MichCapCon

This is like the fall of the Soviet Union where the KGB insiders wound up owning all of the assets.


4 posted on 09/20/2012 7:06:42 PM PDT by Uncle Chip
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To: MichCapCon

Saved the taxpayers 2 million!!!


5 posted on 09/20/2012 7:12:16 PM PDT by Forrestfire (("To educate a man in mind and not in morals is to educate a menace to society." Theodore Roosevelt))
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To: DManA
By statist arithmetic they made $2 million on deal.

Yes. $2,135,000! Aren't they fiscal geniuses!

6 posted on 09/20/2012 7:13:53 PM PDT by informavoracious (Abortions are unproductive wrongs, not reproductive rights.)
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To: DManA

The problem here is that they built something that could not sustain a profit or put people into the seats on a regular basis.

Around two decades in Koln, Germany...the city got its hands onto a major property in the middle of town, and wanted to build a opera house/convention center. The federal gov’t there was going to fund a major part of this. Early on, they brought in a business analyst to do a full report on “impact”. He did the report and it was filed, but no one read the report...where he admitted it’d never pay for it’s monthly operational costs or be used more than six days a month max. So the funds come in...they build complex...and around four years after completion, they are having trouble sustaining just the regular operating cost. Someone pulls out the original report and is shocked that this was accurately predicted but never stopped the construction.

The problem here is that tax revenue is just sitting there and people’s attitudes are to spend it on something...rather than let someone else get it and spend on something else.


7 posted on 09/20/2012 7:24:54 PM PDT by pepsionice
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To: MichCapCon

8 posted on 09/20/2012 7:25:51 PM PDT by Emperor Palpatine ("On the ascent of Olympus, what's a botched bar or two?" -Artur Schnabel)
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To: MichCapCon

That is what they call money laundering.


9 posted on 09/20/2012 7:26:40 PM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: MichCapCon

someone walked with a lot of cash


10 posted on 09/20/2012 7:28:34 PM PDT by dalebert
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To: MichCapCon
Proves we need MORE stimulus! /sarc
11 posted on 09/20/2012 7:29:22 PM PDT by Fledermaus (Democrats are dangerous and evil. Republicans are just useful idiots.)
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To: Uncle Chip
Exactly..This is Obama’s change. we are nation of liars cheats and embezzlers
12 posted on 09/20/2012 7:29:53 PM PDT by dalebert
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To: MichCapCon
How to Become a Real Estate Millionaire, by Peter Schiff
13 posted on 09/20/2012 7:31:43 PM PDT by Vince Ferrer
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To: MichCapCon

I complained about the crap they were building our city and a local politicain had the nerve to tell me it was all free money ..grants...Have to spend it fast he said. We now have big planters blocking the streats of a dead downtown area with chainsaw carved chickens in them . Millions wasted ...50 thousan max would have covered it. I think it was called the main street program or something like that. Huge waste of tax dollars.


14 posted on 09/20/2012 7:33:21 PM PDT by dalebert
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To: pepsionice

Every hair brained idea is being sold as an economic development tool. They have gotten this idea into their heads that there is a pool of business people cruising around looking for a cool place to build a factory and headquarters and they want to see a vibrant arts scene. And if they see it they will invest in that community.

Well there is a shrinking pool of people looking to build factories and an unlimited supply of localities with empty arts venues.


15 posted on 09/20/2012 7:34:30 PM PDT by DManA
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To: MichCapCon

Impressive.


16 posted on 09/20/2012 7:38:09 PM PDT by GBA
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To: MichCapCon

I can totally believe it.

Liberals think having government spend money helps the economy, even if it is spent as illogically and inefficient as this.


17 posted on 09/20/2012 7:41:35 PM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: MichCapCon

Isn’t this the same place with the parking garage fiasco?
Democrats - Thieves, Thugs, Thralls and Thickheads
They have to be elected so they can loot the public treasury.
And the old media keeps telling us, “We didn’t kill those people and steal that money! We just covered for those other Democrats that killed those people and stole that money. We just got a cut of the loot.”


18 posted on 09/20/2012 8:03:22 PM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: dalebert
someone walked with a lot of cash

Perhaps the "Friends of the Pontiac Theatre" or some such group that originally lobbied the city to fund this boondoggle?

19 posted on 09/20/2012 8:12:22 PM PDT by randog (Tap into America!)
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To: MichCapCon

Just think of the cronies who got the contracts on this renovation and the end game cronie who made the buy of all times...win/win for everybody but what few tax payers are left in MI.


20 posted on 09/20/2012 8:21:00 PM PDT by Conservative4Ever (The Obamas = rude, crude and socially unacceptable)
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To: MichCapCon

Ain’t this America a great place to be.


21 posted on 09/20/2012 8:43:07 PM PDT by Digger (A)
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To: dalebert

I butted heads with someone at the county level here over that same argument .Democrats ay grant money isn’t taxes.

As a teenager I argued there is no free lunch,but the Democratic editor of the local paper in the 1970s said”well if someone else pays you may as well have steak instead of baloney.Ironic comment.

The Democrats/socilaists/freeloaders haven’t changed in generations;they continue to act as if wealth is created magivally by the good fairy and no one is hurt by high taxes and wasteful spending.


22 posted on 09/20/2012 9:11:49 PM PDT by hoosierham (Freedom isn't free)
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To: MichCapCon

I seem to recall billions being spent on a levy around New Orleans before Katrina. Everyone wondered how the money was spent on that little project too.

Democrats. Gotta love em.


23 posted on 09/20/2012 9:33:16 PM PDT by Dogbert41 ("...The people of Jerusalem are strong, because the Lord Almighty is their God" Zech. 12:5)
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To: MichCapCon

I would bet that money went to government union workers. One way or more than one way.


24 posted on 09/20/2012 9:47:04 PM PDT by Secret Agent Man (I can neither confirm or deny that; even if I could, I couldn't - it's classified.)
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To: MichCapCon

Harrisburg, PA bought its minor league team [the Senators] some years ago to prevent them from leaving town.

Sold the team some years later to a local investor for a $7M profit.

THEN, they spent $18M [borrowing the balance] in order to upgrade the stadium and keep the team in town.

And they wonder why they are virtually bankrupt ...


25 posted on 09/20/2012 10:24:01 PM PDT by Lmo56 (If ya wanna run with the big dawgs - ya gotta learn to piss in the tall grass ...)
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To: MichCapCon
This is GREAT news!

A 2004 city of Pontiac financial report said $10 million was planned on renovating the theater. Sobota said the renovations cost $8 million.

That's $2,000,000; plus the $135,000 sales price; plus the $135,000 it was going to cost the city next fiscal year.

That comes to a $2,270,000 PROFIT for the city; $2.27M on an $8M investment is 33.75% PROFIT! /Dem Accounting

26 posted on 09/21/2012 12:15:06 AM PDT by ApplegateRanch (Love me, love my guns!©)
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