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Big Grayling Park Would Need Big Tax Dollars

Public land and money underlie MainStreet America’s plan

July 5, 2007 | By Glenn Puit
Great Lakes Bulletin News Service

  Despite tax subsidies and strong community and foundation support, AutoWorld, a state-of-the-art theme park when it opened in Flint on July 4, 1984, went out of business in less than two years.

GRAYLING—The huge amusement park that developers want to build on 1,800 acres of public land near this northern Michigan city will require changing state forest boundaries, securing deeds to nearly three square miles of public land, minimizing environmental damage, and obtaining millions of dollars in tax subsidies and state and county infrastructure development grants.

The massive project, dubbed Four Seasons, would be one of the largest amusement parks in the Midwest, and officials said that it is unlikely to succeed without the significant public investments.

But the exact role that taxpayers will play in financing the park, which would be built by MainStreet America Inc., a new firm based in Rochester, Mich., are still not clear, in part because of confidentiality agreements the company and key elected county officials signed more than 15 months ago.

So as the project moves through the various local and state permitting steps, three key questions will accompany its journey. Is Four Seasons, which developers claim would employ up to 2,000 full and part-time staff members and attract more than one million people and vehicles a year to northern Michigan, a sound facet of the state’s new development strategy?

If it is, how many taxpayer dollars will be needed for its construction and operations? And how would the project affect development patterns in the Grayling area, which has pursued the kind of sprawling land use policies that many economic development experts and Governor Jennifer M. Granholm’s bipartisan Michigan Land Use Leadership Council agree slow sustainable economic development.

Government Spending Involved
Last month Patrick Crosson, the architect for MainStreet America and a lead spokesman, gave citizens an inkling of the magnitude of the project. He said significant improvements to Four Mile Rd. will be required to move traffic from Interstate-75 to the new park and that it "appears all of that work will be able to be done through MDOT [Michigan Department of Transportation] and the county." But the cost is still not known.

Main Street America also seeks tax breaks from the state and a multi-million-dollar bond initiative from Crawford County to help for infrastructure construction.

"We are working with the state on a tax abatement program, though we would only be allowed a $6 or $8 million total over a seven- or eight-year period. And my understanding is it would only be applied at a 50 percent ratio," Mr. Crosson said.

David Stephenson, chairman of the Crawford County Board of Commissioners, said the county has made no commitment for selling bonds to help finance the park, but the county will examine the proposal.

"He [Crosson] briefed us on possibly coming forward with some sort of package, seeking $3 million to $5 million to help with infrastructure," Mr. Stephenson said in an interview with the Great Lakes Bulletin News Service. "The county would have to bond for that. But we would certainly have to do our due diligence."

The Bay City Times reported that one source of funding could be a new tax-increment finance authority in Grayling Township. The paper reported that state Senator Tony Stamas, R-Midland, introduced a bill in January calling for the creation of a "local tourism improvement" finance authority. The finance authority would have the ability to retain tax revenue from the park to help fund infrastructure needs.

For local residents, there is no question that Crawford County needs to take a chance and spend tax dollars to support MainStreet America's development. Linda Williams, director of the Crawford County's United Way chapter, said she’s a supporter.

"We need it. We need the business, we need the jobs, we need the industry that’s involved and the tourism," she said.

Earlier Deal Worsened Sprawl
The DNR has been parceling out small segments of state lands for decades, but rarely has the agency transferred such a large chunk of public property to the private sector for development. Given that a football field covers roughly one acre of land, the Four Seasons park would convert about 1,800 football fields-worth of state forestland into developed property.

If the development is approved, it would make MainStreet America's Four Seasons park the second-largest private development in northwest Michigan, behind only Bay Harbor in Emmet County.

The reason the Crawford County land became available can be traced to Grayling leaders' belief that the community’s economic fate is linked to its inability to develop surrounding lands, almost all of which is owned by either the state or federal governments.

"There’s just nothing going on right now in development because of the percentage of state and federal lands that we’ve got here," said Terry Wright, the Grayling Township Supervisor. "We can’t build a tax base because we don’t have a whole lot of property for someone to come in and buy 10 acres. The township is 80 percent state and federal land, so out of 178 square miles, we haven’t got very many for our people to live and work."

Elected leaders in and around Grayling have been arguing this point for years. Since 1970, the DNR has parceled out smaller chunks of land in Crawford County for a wood product plant, AJD Forest Products, Fox Run Golf Course, Grayling Country Club, Skyline Ski Club, Fick’s 4-Mile Truck Stop, and L.C. Redi-Mix.

But in the mid-1990s, Donald Inman, a former deputy director of the DNR, stopped land transfers to Grayling because they were contributing to sprawling patterns of development. 

Mr. Wright said community leaders stepped up their complaint and approached the governor and state legislators to get some state land freed up for development. "We whined to the DNR for years and years and years that there is too much state and federal land here," Mr. Wright said. "So they finally agreed in 1999 to set aside 1,800 acres of land. They would manage it, but as it was needed, they would sell portions of it."

The change in policy came under Republican Governor John Engler, and the Republican-led House and Senate, all of whom believed that Michigan owned too much land. Former Republican State Senator George McManus held a heavily-attended and much publicized hearing in Grayling in 1995 about how to dispose of state land, an idea that was soundly rejected at the hearing and later largely abandoned by state government.

Still, local leaders in Grayling persisted and succeeded in convincing the Department of Natural Resources and its oversight board, the Natural Resources Commission, to approve the land transfers around Grayling for economic development purposes. First, though, the City of Grayling and Grayling Township hired Mark Wyckoff, director of the Planning & Zoning Center at Michigan State University, to help prepare the land use and infrastructure plan for the proposed commercial and industrial park in Crawford County.

Still Seeking Answers
In an interview with the Great Lakes Bulletin News Service, Mr. Wyckoff said the DNR land at Four Mile Road and I-75 was designated for potential development after a great deal of discussion by community leaders. Originally, it was believed that the land would be sold in individual parcels as was requested by potential developers.

However, he said the foundation laid by the community for development of the acreage would not prohibit one primary user such as MainStreet America from developing the property.

"Is one big one a bad idea compared to a bunch of small ones?" Mr. Wyckoff said of potential developers. "The answer is not just because it is a big development, especially if the developer brings in the necessary utilities."

But when the agreement between the DNR and local officials was negotiated in late 1999, several concerns were raised by opponents, including the Michigan Land Use Institute, which argued that Grayling could do much more to develop its downtown.

Those concerns also included:

  1. Whether the state could set a dangerous precedent by selling off such a large block of public land for industrial use.
  2. The fate of nearly 100 acres of the parcel that were considered habitat for the Kirtland’s warbler, which is currently on the Endangered Species List.
  3. Fears that the sale would accelerate the sprawling development that has already diminished Grayling.

None of these issues has yet been settled. In particular, neither MainStreet America nor the state has conducted an environmental study of the land and the potential affects on the warbler, its habitat, or any other lands and wildlife in the area. "We do not have any information regarding the Kirtland warbler," said Susan Haddad, a spokeswoman for Main Street.

Glen Matthews, a wildlife biologist with the Department of Natural Resources, said any potential impact on the warbler and its habitat will be fully vetted by the DNR in the coming weeks and months.

In order for the land transfer to MainStreet America to become final the DNR first must obtain an appraisal of the property. David Freed, chief of the DNR’s Office of Land and Facilities, said the agency is currently contracting out the appraisal, and the DNR would collect an additional 10 percent of the appraisal price from MainStreet if the sale were to go through.

Popular Idea, but Is It Workable?
A series of public meetings would have to be held on the land transfer. There is little question that the Crawford County public is fully behind the amusement park development. After all, the county’s unemployment rate has routinely remained above 7 percent, and the average annual salary is slightly above $20,000.

Mr. Crosson is offering some lucrative financial carrots to the county’s residents that he said could help change those bleak numbers. He has promised 2,000 jobs, 700 of which would be year-round, and an estimated annual park payroll of $25 million.

"Our minimum wage is $8 an hour," Mr. Crosson said. "If you run a ride at a theme park, you have to have a college degree. The average starting salary for that will be around $36,000 a year. We think those are pretty good-paying jobs."

Mr. Crosson’s company predicts the park will attract 1.8 million visitors in the first year, which feasibly could be open by 2010. "If we do it properly and do the programming, we think we can do 2.4 to 2.5 million people within five years," he said in an interview.

Will those projections come true? Michigan, which now has only one sizeable amusement park, which is located in Muskegon, also has a well-documented history of a number of such parks that have failed badly. For example, more than 20 years ago the state gave $35 million to AutoWorld, a theme park built in Flint by one of the amusement park industry’s most experienced firms, Six Flags Theme Parks Inc. But the park collapsed after just two years, despite predictions by its proponents of 900,000 visitors annually and, like the Four Seasons park, a car-friendly location not far from I-75’s heavy stream of tourist traffic.

Much more recently, another amusement park, Cereal City USA, received a $900,000 loan secured by the City of Battle Creek. It closed in January.

Glenn Puit, a journalist and the former lead investigative reporter at the Las Vegas Review-Journal, is the Institute’s Smart Growth policy specialist in Emmet County. Reach him at glenn@mlui.org. Read Glenn’s previous story about the proposed park here.

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