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Critics threaten hotel tax suit
They claim Lion's stadium levy used to build golf course

 

By David Josar, The Detroit News
Copyright 2000  The Detroit News Inc.
Reprinted with permission
Article date: April 27, 2000
 

ROMULUS- Two Wayne County commissioners, municipal leaders and business owners are questioning the way the county is using money to foster development in economically distressed communities.

County officials have set aside about $30 million in extra money, generated by a rental car and hotel tax approved by voter referendum in 1996 to develop Ford Field for the Detroit Lions and to buy up land and make other improvements for the Pinnacle Aeropark, a hotel, golf course and light industrial complex in Romulus. Several taxpayer groups are considering filing a lawsuit to force the county to repeal the tax.

Another development project, the Inkster Valley Golf Club, has drawn criticism because nearby residents and business owners say the communities of Inkster and Wayne need housing and retail development, not a golf course.

Meanwhile the county is being criticized for the proposed Pinnacle Aeropark to be built on about 1,800 acres adjacent to Detroit Metropolitan Airport. Project planners believe Pinnacle Aeropark will create 25,000 permanent jobs and $2 billion in investments.

Attorneys for the county say the manner in which county officials are using the money is legal because their interpretation of the voter referendum allows the taxes to be used for any development project that potentially benefits an economically distressed community.

Business owners, however, argue that private enterprise -- not government -- should develop their communities.

"There's little question here that people voted for the (hotel and rental car) tax with the belief it would build a stadium," said attorney Peter Macuga of Detroit, who has successfully filed class action lawsuits against the county over tax issues. "It's pretty clear the money isn't being used for that anymore. If the county won't refund our money, then we'll go to the courts."

County Commissioner Bernard Parker, D-Detroit, questions whether building an industrial park adjacent the airport is the right use for money specifically targeted to help the communities of Detroit, Hamtramck, River Rouge, Ecorse and Inkster.

"I really can't see how these projects are benefitting distressed communities," said Parker. "There are plenty of distressed communities that would embrace plans to encourage development and new businesses. I don't think golf courses and luxury hotels by the airport fit that need."

He also believes the use of the surplus tax money could spawn lawsuits because it wasn't for the purpose voters approved.

County officials are telling naysayers to just wait.

"Pinnacle Aeropark will be the largest development project in the state and will complement the $1.2-billion improvements now under way at Detroit Metro Airport," County Executive Ed McNamara said when he announced the program last year.

Critics pan golf course

Michigan Avenue in the west-side is dotted with used car lots, two go-go bars and five run-down motels where you can rent rooms for a short stay.

No new apartments or homes have been built along this strip in more than a decade, residents and business owners say.

About two years ago, Wayne County spent $4 million, earmarked to help distressed communities, to construct the Inkster Valley Golf Course, which straddles the Inkster-Wayne line and is flanked by a U-Haul rental depot and a gas station.

"I don't know if that's the sort of help we needed," said Jose Garcia, 45, who works at the gas station in the community where 24 percent of its residents live below the poverty line. "We already had one golf course and I don't see much new business here. What we really need is good housing."

The golf course was one of the first projects funded through the county 21st Century Fund, created in 1994 to raise money through the sale of 922 acres of surplus county property in Northville Township.

County officials said the 21st Century Fund will help distressed communities like Highland Park and Ecorse, but it will take time.

The county will sell-off Pinnacle Aeropark parcel-by-parcel and put the profits back into distressed communities. Officials estimate they might raise as much as $150 million that way.

Last year, the commission approved spending $30 million in surplus funds raised by the hotel and rental car taxes to cover land acquisition and other development costs at Pinnacle. McNamara had asked for $50 million.

The money is coming from a surplus captured from a 1 percent tax hotel rooms and a 2 percent tax on rental cars across the county that was approved by the 1996 voter referendum.

The tax was projected to raise about $5.5 million a year that will be used to pay down the $80 million bond on Ford Field.

But revenue tallies and projections by the county Treasurer's Office show the tax is raising an extra $2 million a year. That figure continues to grow and could bring as much as $40 million more than needed.

County auditors have questioned how the money in 21st Century Fund has been used.

"As a result of the outstanding commitment to the Lions Stadium, it is difficult to determine whether the fund will be able to assist any other economic development programs and projects in the county, specifically those in the remaining distressed communities," auditors wrote in their report.

The 21st Century Fund also was to be used as a loan program to help businesses in distressed communities. That phase has been put on hold because the money is going to develop and sell county land surrounding Detroit Metro Airport.

Some business and community leaders don't believe developing Pinnacle is a role for government.

"I don't see how it will hurt us, but I think local businesses could develop the land the way they see fit and let local entrepreneurs, not the government, decide our future," Romulus Mayor William Oakley said.

Parker and other commissioners are increasingly lobbying their colleagues and the McNamara administration to invest in communities that need more help than Romulus.

Commissioner Robert Blackwell, who represents Highland Park, has said he sees the importance of developing land surrounding the airport, but also sees other pockets of the community that need help.

"I know there are businesses in Highland Park that would like to see some of that money."

Public vs. private development

Some Romulus business owners are angered about the plan to develop Pinnacle Aeropark because they believe the county is taking away an opportunity that should remain with the private sector.

"This is our community and we should decide if we want to develop and it and we should be allowed to take that initiative," said Drew Cruse, a restaurant owner along Middle Belt.

Cruse said there is another catch to the Pinnacle project. As the county buys up property around the airport, that land is taken off the tax rolls and the local communities have to find ways to come up with more tax revenue or get by with less municipal services.

"Maybe someday we'll see some of that tax-money return but I don't think it will happen any time soon," he said.

About Pinnacle Aeropark

Wayne County officials have set aside $30 million in extra money generated by a rental car and hotel tax to buy land and make other improvements to Pinnacle Aeropark.

The development would:

  • Be built on 1,800 acres adjacent to Detroit Metropolitan Airport.
  • Include a hotel, golf course and light industrial complex.
  • Create 25,000 permanent jobs.

Approved by Mark Silverman, Publisher and Editor
Reprinted with permission from the Detroit News
 

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