News Story

Mackinac Center Investigation Leads to Criminal Charge

Hangar42
The Hangar42 facility was the subject of a suspicious land deal that lead to felony charges.

Hangar42 was a complex, suspicious land deal involving $10 million in tax credits that the Mackinac Center first brought to light.

For the last six months, Mackinac Center reporter Kathy Hoekstra kept a list of the 20 or so parties involved in the deal by taping a piece of paper with their names on her wall to better track the scheme. With every development, Hoekstra updated the wall.

On July 27, Joe Peters — the buyer of Hangar42 — was charged by the Michigan Attorney General's office with one count of attempted felony false pretenses over $20,000, according to a press release. The AG office looked into the questionable Michigan film tax credit application Peters filed with the Michigan Film Office. The Mackinac Center called for an investigation by the Attorney General's office on June 17.

“How many more outside deals might we have exposed if the MEDC had not constructed a Berlin Wall around information.”
– Michael LaFaive

The AG's investigation came a month after the Mackinac Center's Hoekstra and Michael LaFaive broke the story May 20 of Hangar42. Peters' company, West Michigan Film, purchased a large production studio for $40 million dollars.

Hangar42 — which was touted by Gov. Jennifer Granholm in her State of the State address — was said to be a $40 million investment. But Mackinac Center research showed the building was listed for sale for as little as $9.8 million just days before the governor's speech mentioned the project. The studio qualified for a refundable infrastructure tax credit, which would represent 25 percent of the infrastructure investment in the project.

The Attorney General's press release stated that the credit application was ultimately denied when Peters could not properly document the alleged investment.

The Michigan Film Office and Michigan Economic Development Corp. ignored questions posed by Hoekstra and LaFaive during the Mackinac Center's investigation.

"It's huge," said LaFaive, the director of the Mackinac Center's Morey Fiscal Policy Initiative, about the charge. "It shows the importance of independent investigation. How many more outside deals might we have exposed if the MEDC had not constructed a Berlin Wall around information."

Hoekstra said the goal was to protect taxpayer dollars.

"We want to make sure nobody is taking advantage of the system on the backs of Michigan taxpayers."

The original version of this story was posted online on Aug. 2, 2010.