Lights, camera, SEC action!
So ends a Hollywood Dream that was supposed to shore up the sagging economy of a Detroit suburb — and turn Motown into a motion-picture mecca capable of taking on Tinsel town.
But instead of attracting fanfare and film fests, two former civic leaders of Allen Park, Mich., were hit Thursday with civil fraud charges.
The two — the first municipal officers ever hit with such charges — led a $31 million muni bond offering that gave investors bogus information about the chance of the project's success and misstated the city's financial condition, the Securities and Exchange Commission said.
The SEC announced the fraud charges as it settled the suit against former Mayor Gary Burtka and former City Administrator Eric Waidelich, who together dreamed up
$146 million facility with eight sound stages and an ambitious retraining program.
The move project once seemed ideal for laid-off auto workers who wanted to re-invent themselves as grips, best boys and gaffers.
Those were just some of the 3,000 skilled and non-skilled union jobs that Allen Park's Unity Studios was to add to an area with a 15.9 percent unemployment rate in the wake of Chrysler's and General Motors' bankruptcies.
More than 80 full-time managerial jobs were promised, too.
Unity Studios began as a Public Private Partnership (PPP), consisting of Allen Park, the Hollywood producer Jimmy Lifton and a private real-estate developer.
The plan, announced in April 2009, called for Allen Park to use bond proceeds to buy land it would donate to the PPP.
The developer would then commit $20 million to begin construction on the 104-acre site, while producer Lifton managed the project and rounded up additional investors.
The plan started unraveling the next month, however, when Allen Park faced a $2 million deficit in its fiscal budget for 2010.
Lifton offered to cover the deficit — only in his mind the $2 million was to be a "capital repayment," whereas the city administrator saw it as a "financial gift," according to the SEC.
It scarcely mattered, initially, because it was legally determined the city's bond proceeds could not be used to purchase land it would then turn around and donate to the PPP.
This effectively collapsed the PPP, as the city no longer met requirements for its membership.
It also freed the developer from his $20 million obligation to the project.
Lifton got out his commitment, too, which left Allen Park with the same $2 million deficit the Hollywood producer was supposed to make disappear.
By August 2009, the SEC said, Allen Park's plans for Unity Studios were reduced to having Lifton lease a mere 100,000 square feet on the site to run a vocational school.
According the SEC, none of these setbacks appeared in November 2009 documents aimed at selling bonds to finance Allen Park's studio.
Lifton, who currently runs a post-production studio in Burbank, did not return requests for comment.
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