News Story

Resort Owners On Subsidy Agency's Committee, Get Its Subsidies, Praise It In Newspaper

Spokesman says it’s all legal

Recently, a pair of northern Michigan business owners penned a tribute to state government’s economic development agency (the Michigan Economic Development Corporation or MEDC) and its programs. The commentary appeared in the pages of the Sept. 21 Traverse City Record-Eagle.

The MEDC’s work with local governments and business is a “dynamic partnership,” said Chris and Jim MacInnes, owners Crystal Mountain Resort in Thompsonville, which ensures that Michigan “industry, tourism and economic development work together to create opportunities and success for the people of our state.”

The MacInnes’ support of the MEDC and its array of taxpayer-funded subsidies for selected is unsurprising.

As noted in an “about the author” note attached to the column, Chris MacInnes is a long-serving member of MEDC’s executive committee. That’s the group of public officials and business leaders charged with “overall management and control” of the agency.

Also, as noted in the tribute to the MEDC, Crystal Mountain received an MEDC-awarded subsidy in 2015 “to support two of our major expansion projects.”

The size of the award, a federal Community Development Block Grant administered by the state agency, was omitted from the column; it was $463,370.

The MacInnes’ column closes with encouragement to the Legislature to provide “adequate resources and funding” to MEDC programs.

In light of those circumstances, Michigan Capitol Confidential made an email inquiry to the resort asking why taxpayers should not regard this as crony capitalism. It did not respond.

MEDC spokesman Otie McKinley said in an email that the Crystal Mountain grant application was made through Benzie County “to assist in a growth and expansion project in the community.”

The application met all of the federal program requirements, he said. Asked if any concerns arise about a conflict of interest when a business owned by an MEDC committee member seeks MEDC program funding, McKinley said “executive committee members aren’t part of the ... decision making process” for business subsidies.

Those decisions are made by the board of the Michigan Strategic Fund, he said. Meanwhile, the discussion of taxpayer-funded business subsidies continues in Lansing.

The fate of one of MEDC’s most prominent programs, the Pure Michigan tourism advertising campaign, remains uncertain for 2020 after Gov. Gretchen Whitmer zeroed out its appropriation with a budget veto. Some analysts, recommend it be kept that way.

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.