A news service for the people of Michigan from the Mackinac Center for Public Policy

A privately owned racecourse in Huron Township broke a promise with the county after it bought land from Wayne County for $1 and then turned around and sold it on the open market, according to a county commissioner.

Pinnacle Race Course was recommended by the Michigan Economic Development Corp. for millions in tax credits after an analysis said the company was "financially sound." But Wayne County Commissioner Ed Boike says there are liens against it for money owed by its owners.

Boike, the chairman of the Wayne County Board of Commissioners, laid out a series of concerns he has with the owners of the racecourse and says the county has begun an investigation of the deal. The deal became news when the News Herald of Grosse Ile reported that Pinnacle Race Course sold seven acres of the 240 acres it got from the county to an Indian tribe. Pinnacle paid Wayne County just $1 for the 240 acres in 2008, and then sold the 7-acre parcel for $179,000.

The racecourse is also trying to sell two other 5-acre parcels.

The deal presents several problems for Huron Township, and Boike made several claims on Friday:

Racecourse officials agreed to have a picnic area on the premises where people could watch races for free. They also agreed to let the local high school equestrian team use the track. None of that has happened.

The county doesn't appear to have made any clauses in the deal to prevent the racetrack owners — Post It Stables — from selling the land on the open market after it was purchased for $1, Boike said.

And there appears to be conflicting accounts of the 1,200 jobs that the racetrack said it would create as part of the $1 land deal.

Boike said county commissioners thought the jobs would be full-time and racecourse employees. However, an MEDC memo dated Sept. 23, 2008, states that onsite employment of more than 700 people would include "other parties in support of the track, such as horse owners, jockeys, trainers, blacksmiths, onsite suppliers, and other independent contractors." The MEDC memo states the course would have 71 full-time people employed by Post It Stables. Huron Township Supervisor Elke Doom said she believes there are about 30 full-time employees working at the racecourse.

The MEDC estimated that the project would bring in $5.5 million in state government revenues through 2018, due to creation of new jobs. But the state, county and township do not collect property tax dollars if the land is sold to an Indian tribe, which is exempt from paying property taxes.

The embattled state economic development agency has been under fire for most of the year due to several concerns, most notably this spring, when it recommended a special tax deal for a company run by a convicted embezzler. A press release from the governor's office praised the deal, but the deal was later withdrawn when the felon's criminal history was revealed. 

"Local governments often extend incentives to businesses under the presumption that it will pay off in long-run tax revenues," said James Hohman, a fiscal policy analyst with the Mackinac Center for Public Policy. "It seems this deal identified a way around that."

The project was recommended by the Michigan Economic Development Corp. for up to $6.5 million in tax credits.

MEDC spokesman Michael Shore stated in an e-mail that tax information is confidential. Shore wouldn't say how many jobs Pinnacle Race Course had created, instead referring questions to the course.

On Friday, Pinnacle Race Course General Manager Mike Mackey said he had no comment.

Wayne County spokeswoman Stephanie Baron wrote in an e-mail on Thursday that she was trying to get a comment, but had not provided the details of the land deal by Friday.

Though Boike says there are now liens against the Pinnacle Race Track property, the MEDC briefing memo on Post It Stables deal painted a different financial picture.

The Sept. 23, 2008, memo states, "A financial review was conducted by staff and confirms that this company has the financial wherewithal to take on this project and that the project is economically sound."

Huron Township widened one of the roads leading to the track in anticipation of people coming to see the races and hoped the track would be a regional draw.

"I liked the idea of a racetrack," Boike said. "I liked the idea of what else was supposed to happen there. ... We looked at streets being lined with businesses and restaurants."

"Huron (Township) ends up getting a pretty bad deal," he said.

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