News Story

Millions In Taxpayer Money For Pontiac Theater And Little To Show

$4.5 million loan, $7.5 million investment and now, only three events

Image via the Strand Theatre's Facebook page.

In 2015, the state of Michigan’s flagship corporate welfare agency heralded the prospect of 150,000 visitors going to downtown Pontiac, thanks to a $4.5 million loan it made. The Michigan Economic Development Corporation loaned the money to the Strand Theatre, which, it said, would provide 90 permanent full-time jobs paying an average of $18 an hour.

But millions of taxpayer dollars later, the theater has fallen short of the state’s aspirations.

Currently, the Pontiac theater has one event publicized on its website, a Michael Jackson tribute show scheduled for June 2. It also hosted a blues concert on May 19. A third party has rented the facility for a third event that will be held on June 8. According to the theater's Facebook page, there has been three events thus far in 2018.

And the Strand Theatre didn’t have a functioning phone number for at least four days in May, something the sponsoring company said it was aware of and eventually fixed.

While the theater provided some basic information on its events, it didn’t respond to requests for how many full-time employees it has.

Despite the theater’s floundering, politicians have applauded and given it recognition.

Gov. Rick Snyder awarded the companies involved in the theater’s restoration the Governor’s Award for Historic Preservation, an award created by the State Historic Preservation Office.

State Sen. Jim Marleau, whose district includes the theater, praised the project in a May 2 press release.

“This restoration project has increased the quality of life for Pontiac residents, and the theater is sure to be a destination for surrounding communities, bringing additional economic activity to the city,” said Marleau, R-Lake Orion. “This great city has struggled from the economic downturn of 2008, but this restoration is representative of Pontiac’s resurgence and economic comeback.”

But the theater, which opened in early 2017, is around due to a constant supply of government subsidies.

The city of Pontiac pumped $7.5 million into it from 2002 to 2005 but had little to show for that investment. The renovation was not completed in that time, according to the Michigan Economic Development Corporation, and the building was sold in 2013 to developers.

The city of Pontiac has also provided the theater with a 12-year property tax abatement. The theater also has received a $3.5 million tax credit for historic buildings, according to the state.

The Illinois Facilities Fund, a Chicago-based nonprofit, provided the theater with a $750,000 loan in 2016. The fund receives taxpayer money.

The Michigan Economic Development Corporation gave the theater a $4.5 million loan in 2015 and said at that time the renovation would provide “a significant economic boost” to the area once it was up and running.

Lee Roumaya owns the Fillmore 13 Brewery. His website states that his brewery is located “in the heart of Pontiac, across from the Strand Theater.”

“I don’t want to get into the politics,” Roumaya said in a telephone interview, when asked about the theater. He said he came to Pontiac based on his own business concepts and wasn’t concerned with how other businesses do.

“Hopefully, [the theater] will pick up a little steam and be more successful,” Roumaya said.

Michael LaFaive, a fiscal policy analyst at the Mackinac Center for Public Policy, said the state should leave investing in businesses to the private sector.

“There is no reason to force taxpayers to subsidize entertainment, either through the artist or the theater in which they perform,” LaFaive said. "It is not only unfair to transfer money from the many who do not enjoy the Strand and its offerings to those who do, it is economically unproductive.”