News Story

City Spends $8 Million on Theater — Sells It Eight Years Later for $135,000

Despite expensive renovations, Pontiac emergency manager says, 'How the money was spent was hard to see'

Eight years after the city of Pontiac spent $8 million renovating a theater that city officials say never reopened, the city sold it to a developer for $135,000.

Pontiac Emergency Manager Louis Schimmel said the deal is expected to be completed within two weeks.

City documents show the theater, which was sold as part of the city’s plan to cut expenses, was projected to cost the city about $135,000 in 2012-13. The theater opened in 1921 and has been owned by the city since 1986. The sale price of $135,000 was more than the appraised value of the theater, said Joseph Sobota, the city's director of the Department of Community Development.

A 2004 city of Pontiac financial report said $10 million was planned on renovating the theater. Sobota said the renovations cost $8 million.

Schimmel, who was appointed as the city's emergency financial manager in September 2011, said he saw the theater recently and couldn't see much of a benefit for the millions that were spent on renovations.

"It doesn't look like they spent $100,000, let alone $8 million," Schimmel said. "How the money was spent was hard to see."

Leon Drolet, chairman of the Michigan Taxpayers Alliance, said there should be an investigation into how the $8 million was spent.

"If this happened in your house, if you paid millions of dollars on upgrades you couldn't find, you would be suing the renovator," Drolet said. "The problem is there is no one who does that when government is involved. There is no accountability when government rips you off. No one is evaluated or held accountable for wasted funds. The only show that keeps going on is the rip off of taxpayers. That is the show that never closes."


See also:

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

Before Emergency Manager, Pontiac Had 87 Different Health Plans

Pontiac Turnaround Stories: City Versus Schools

Proposal 1: Referendum on the Emergency Manager Law

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.