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City Has Been Paying $10,000 A Month To Light Vacant Garage

Pontiac emergency manager wants Phoenix Center demolished

The Phoenix Center in Pontiac

Pontiac taxpayers have been paying $10,000 a month to keep the lights on at what is basically a huge, nearly vacant garage.

As the product of a 1970s urban renewal project, the Phoenix Center has been draining money from the city of Pontiac for years. It was running a half million dollar deficit when it was operational as a parking garage and occassional concert venue with events being held on the top floor of the structure. According to available records, the last event held at the center was in 2008.

"With the Phoenix Center not in use, just to keep it lit, the marquee and the lights that are in the platform in the actual garage is $10,000 a month," said Cathy Square, a member of Pontiac's emergency manager team. "Ten thousand a month for lights [when it's] vacant."

That figure could actually be a conservative estimate of what the light bill for the center was through May. For example, in January the lighting bill for the entire parking area at the Center was about $11,800. On top of the lighting costs, Pontiac taxpayers are also footing the bill for insurance on the facility at $60,000 per year.

Pontiac Emergency Manager Lou Schimmel has been aggressively pursuing the demolition of the mostly vacant structure. Under Michigan's original emergency financial manager law, enacted under former Gov. James Blanchard in the 1990s, emergency managers are sent in to Michigan municipalities and school districts that are in debt and have lost control of their finances.

In early 2011, Gov. Rick Snyder signed an enhanced emergency manager law, Public Act 4, that allowed emergency managers to set aside labor contracts.

Making those kinds of structural changes to city contracts and finances are critical to getting struggling cities back on their feet. Nonetheless, and despite the high cost to city taxpayers, there are some on the Pontiac City Council and others in the city who oppose demolition of the Phoenix Center.

PA 4 will be on the Nov. 6 ballot as a referendum. A "yes" vote keeps the law in place; voting "no" eliminates emergency managers and their reform efforts in the failing school districts and cities where they have been appointed.

Schimmel, who formerly was director of municipal finance at the Mackinac Center for Public Policy, was the third emergency manager for Pontiac, but the first who was able to hit the ground running with the passage of the enhanced emergency manager law. PA 4 has since been suspened pending the result of the November election.

Schimmel's efforts to have the Phoenix Center demolished are now at a standstill because of lawsuits to stop the demolition.

"We can't demolish the center or stop paying for the lighting because of legal reasons," said Joseph Sobota, another member of Schimmel's management team.

Schimmel's team was able to shut off about one-third of the center's lights and the marquee about three months ago, which lowered the light bill to $7,200 per month. The Phoenix Center garage was designed for 2,500 automobiles. Currently, 200 vehicles are parked in the garage.

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See also:

Before Emergency Manager, Pontiac Had 87 Different Health Plans

Pontiac Turnaround Stories: City Versus Schools

Referendum on the Emergency Manager Law

Meet James Hohman, Assistant Director of Fiscal Policy at the Mackinac Center. James discusses his latest project, an analysis of Proposal 1, the proposal on personal property tax reform that will appear on the August 5th ballot. Read more about Proposal 1 here: http://www.mackinac.org/20246


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