Financial Crisis and Meadows Still in Denial // Eliot Singer

I hate to talk about this now, given the immediate flood crisis. I hope most of you are managing. This flood is worse than anything in my 35 years in residence in Lansing/East Lansing, and our backed-up sewer problems were not flood related.

I feel compelled to say something after reading the latest on financial crisis in Eli. Avondale Square is not the worst by any means. The building of the new DPW building without a debt millage last time Meadows was mayor is costing about $600,000 per year for 25 years, ultimately mostly from general fund money, though hidden through what I called money laundering, when I finally tracked the debt payments. The City Center II Evergreen bonds will be over $400,000 starting soon.

I have documented over $50 million in unfunded debt payments on bonds (and HUD loan) for parking structures, the DPW building, and development projects, unfunded meaning insufficient parking, TIF, and other revenue. How much the tax incentives as a first resort, downtown as a perpetual welfare state ideology has and will cost is a crap shoot. Between the documented $50 million and crap shoot, anywhere from $60 million to $80 million. And this does not include Lotto 1. Lot 1 was the best asset to sell to pay down legacy costs, but has been given away for a backroom deal. Then there is the ridiculous fees snuck into the Lotto 1 bond in secret.

Yes, legacy costs are the biggest reason for financial crisis. The legacy costs, compared to other communities (all of whom face legacy cost issues), is because the cost of policing is so high, and much of the pension money is from cops, especially with early retirements. But the second biggest reason for financial crisis is the pursuit of development with snake oil finance, without which there would be much more money, on the order of $2-$3 million per year, stretching back for last 15 years or so (less before that).

From Meadows comments at Council meeting (in ELi article), it is clear he is unwilling to accept responsibility, even when the finance director is talking about this, not critics (like me) who he regards are the enemy. You can’t put the genii back in the bottle, and the bad spending on development will drain the city for a long, long time.

But the obstinance, the embarking on another boondoggle (Lotto 1) when the public was furious over the previous boondoggles, the unwillingness even now to throw a bone to critics, makes it much more difficult to gain support for new taxes.


Eliot Singer

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