DEGC refuses to provide public records to MC Muckraker under FOIA request

A sticker at the site of the former Tiger Stadium. Photo by Steve Neavling.
A sticker at the site of the former Tiger Stadium. Photo by Steve Neavling.

By Steve Neavling
Motor City Muckraker

Taxpayers are funding a nonprofit that handles the sale of prime city property on Detroit’s behalf.

So naturally we wanted to know more about the Detroit Economic Development Growth Corporation (DEGC), which negotiated the controversial deal to subsidize the Red Wings arena with $250 million in public money.

Motor City Muckraker sent a Freedom of Information Act request to the DEGC on April 29 for records on the budget, employees’ salaries, the vendor list and the contract with a private PR firm.

But the DEGC denied the records, saying it does not have to comply with open records laws, despite receiving its funds from taxpayers.

“The DEGC is not ‘a public body’ … and therefore no response is required,” wrote Art Papapanos, the DEGC’s chief board administration officer.

The nonprofit entity wields strong influence over who receives prime property, from downtown to 8 Mile. Now that downtown property is becoming more valuable and attractive, the DEGC plays an increasingly important role in the redevelopment of the city.

Two former DEGC leaders who negotiated the controversial Red Wings contract are now working for the Ilitch family’s arena development company. They are former DEGC president and CEO George Jackson and one of his former lieutenants Brian Holdwick. Their job with the DEGC was to ensure taxpayers got the best deal under the agreement.

Three years ago this week, Jackson told a Grosse Pointe crowd: “Bring on more gentrification!”

The DEGC works with at least seven economic development groups whose leadership is appointed by the mayor. Its meeting agendas are not posted online, making it difficult for residents and the media to know what’s happening with key real estate transactions.

When the city of Detroit refused to turn over hydrant records last year, we sued and won access to the documents.

 

Steve Neavling

Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.

  • AdjunctNation

    Steve,

    Here in Ann Arbor, Ann Arbor SPARK (MEDC created “job creation” boondoggle nonprofit) made the same argument when A2Politico, the A2Indy newspaper and others asked to see budgets and other financial information. SPARK was founded and led by Rick Snyder and Mike Finney. They had lots of reasons to want to keep financials such as budgets and audits secret. http://www.a2politico.com/2011/12/ann-arbor-politicos-dish-up-millions-in-public-money-give-spark-pals-a-pass-on-public-accountability/ http://www.a2indy.com/2013/12/13/in-tense-meeting-ann-arbor-spark-executive-board-votes-to-make-2012-and-2013-audit-statements-available-to-the-public-for-first-time/

    The 501(c)3 DECG solicits donations which means, then, that the group is required to file its annual audits with the State of Michigan’s Charitable Division. Just call and ask for the audits to be emailed to you. This is how years of SPARK’s audits were finally made public. The audits will be a gold mine of information about how the DECG is spending its money. IF the DECG has not filed audits, the Charitable Division will force the DECG to file the audits in order to release them to you.

    Guidestar.org has the 2014, 2013 and 2012 990s for the DECG. HOW COW!! In 2014, the DECG took in $6.6M and spent $5.4M on salaries alone. http://www.guidestar.org/FinDocuments/2014/382/192/2014-382192028-0b8adb95-9O.pdf There are salaries for top executives listed.

    Finally, the DECG’s form 990 filed with the IRS says that the organization makes its “financial statements available to the public on request.” If they are refusing, a call to the Michigan Attorney General’s office will get quick action to “remind” the DECG of its legal obligations regarding release of financial documents (tax returns, audits, budgets and the like) upon request.

    Good luck!

  • JGillman

    Keep it up Steve.

  • JGillman

    Keep it up Steve.

  • LAHeat

    Hmm, public funds? Private body? Yeah, you do have to comply DEGC. I heard of a case on the west coast where a utility was using public funds, refused to turnover records of what they were doing with public monies. Case went to court – guess what? They were ordered to turn over the records. So, looks like it’s time to go to court!

  • William Valentine

    Your pursuit of this is why I contribute money monthly to your efforts. Keep up your persistence in the search of transparency. Fellow readers who support the Muckraker please contribute $$$$ whatever you can to his efforts.

  • William Valentine

    Your pursuit of this is why I contribute money monthly to your efforts. Keep up your persistence in the search of transparency. Fellow readers who support the Muckraker please contribute $$$$ whatever you can to his efforts.

  • javierjuanmanuel

    So how does this work better than just putting building and land up for sale, or an auction, and let the high bidder put up apartments, condos, restaurant, car dealership etc

    • Donald E. Hodge

      Good question. But if I had to guess I`d say another example of what happens when a bunch of rich people get together and come up with a new (legal) way to cheat.

  • Dean Henry

    You muckraker you! Stop trying to sniff out the truth; big brother knows what’s best for us, so just relax, let it go, keep calm and chive on dude.

  • Donald E. Hodge

    Well Steve, I guess you will be spending part of your weekend with the attorneys that represent Motor City Muckraker. My Tax dollars thank you for that.