News Story

E-mails Reveal That Film Office Chief Agrees With Criticisms of Embattled Studio Project

The director of the Michigan Film Office agreed with the Mackinac Center for Public Policy's report that exposed a suspect studio deal involving $10 million in tax subsidies.

Janet Lockwood, director of the state's film office, stated the Hangar42 deal "looked so promising. But it's not" in an e-mail dated May 20. The Mackinac Center acquired the e-mail in a Freedom of Information Act request.

Hangar42 involves a former Lear Inc. facility that was listed for $9.8 million last fall that an investor claims is now worth $40 million. That increase in value means $10 million to the investor, who is seeking a 25 percent film credit. Meanwhile, many of the contractors have complained they haven't been paid for the work they did.

Gov. Jennifer Granholm touted the project in her annual State of the State address last January, which Lockwood lamented the e-mail:

I feel completely responsible after encouraging the Gov. to mention this project. They've received not a penny but perception is all. If it will help, I'm happy to claim fault and deflect it from the front office. So disappointing, it looked so promising. But it's not. This time I am agreeing with the Mac Center.

Last week, on June 9, three weeks after the e-mail, the Michigan Film Office announced Lockwood's retirement.

Lockwood hasn't responded to an e-mail asking for reasons for the retirement.

Liz Boyd, a spokeswoman for Gov. Granholm's office, didn't respond Monday to an e-mail requesting comment.

"If Studio42 is not a good deal, as Lockwood writes, the governor should publicly announce this herself," said Michael LaFaive, the director of the Mackinac Center's Morey Fiscal Policy Initiative, who broke the story with colleague Kathy Hoekstra. "A state economic development system that rewards politicians for making jobs announcements, but does not hold them accountable when jobs fail to materialize is a perverse one. Words cost politicians nothing, but they can cost taxpayers everything."

The e-mails also show there was some confusion among the Michigan Economic Development Corp. officials about the status of the tax credit involving Hangar42.

Lockwood states that Hangar42 was granted "an infrastructure tax credit in December 2009, agreement signed by the film office and Treasury. These credits must be earned by performance, they are not a given. They have submitted a request for the $10 million credit saying the funds have been spent on the facility. The request is under review, no date nor approval certain, which is standard operating procedure. This is neither an entitlement or an automatic credit."

Mike Shore, the MEDC spokesman, replied that he thought Hangar42 had not been approved for anything.

Then Penny Launstein, vice president of Michigan Retention and Growth for the MEDC, wrote, "Two step process — first the agreement is approved, then once they incur costs, they can apply for the actual credit. Their credit has not been approved yet so all they have received is our promise to consider the credit."

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.