Still Stealing You Blind: Ann Arbor SPARK Spends $7.7M & Creates 79 Jobs

by Rob Smith

The 1 percent here in Ann Arbor are just different than us. They look at out-of-work folks and hungry children, homeless men and women tossed out of Camp Take Notice, struggling small businesses and cash-strapped school districts, and then light their clove cigarettes with other people’s $100 dollar bills. They feel good about the work they’re doing to “create jobs” here in Ann Arbor and Washtenaw County.

Whether you’re a Dem or a GOP supporter, jobs and the Michigan economy are probably close to the top of your list of what you’d like to see Michigan pols work on. Our state has lost hundreds of thousands of jobs over the past decade—most of them in the manufacturing field. While Ann Arbor’s unemployment rate has never rivaled that of, say, Detroit, the local economy is not particularly diversified, with the University of Michigan keeping the city afloat. The loss of Pfizer, still felt, is proof enough of that. Unfortunately, Michigan officials have spent, literally, boat loads of money to pick winners in the job creation field, and the taxpayer money giveaway is not creating jobs.

In Ann Arbor, the results are comical. The members of the SPARK Board, self-styled and mostly white captains of industry, real estate, music, publishing and even job creation, have never been able to get actual jobs created. First, these community leaders relied on cranking out annual reports that read like Fairy Tales.”Yo, Mofos, us Big Shots created thousands of jobs for your sorry unemployed Ph.D.ed asses. Here in Ann “We Be Better Than Detroit” Arbor we got us some J.O.B. S.” Cue up the news cameras.

The annual reports cranked out by Gov. Snyder and his boy Michael Finney were Pure Michigan Fiction.

When Gov. Rick Snyder was the head of SPARK, he claimed the group helped create and retain over 12,000 jobs in Washtenaw County over a two year period. That claim was a exploded by a feature in a Detroit newspaper that revealed the state’s “job creation engines” including SPARK, had helped create fewer than 800 jobs, total, in the two year period Snyder’s bogus claim of 12,000 was included in SPARK’s 2009 annual report. A2Politico reporting has helped push Ann Arbor SPARK into producing less fanciful job creation numbers, finally. Jobs created went from 12,000 in 2009 to 600 in 2011. There are many reasons to doubt even the 600 number.

Over the past several years, Ann Arbor SPARK has siphoned millions of dollars away from the public schools through a TIF scam approved by Ann Arbor’s Mayor and City Council. First a financing authority was created (the local LDFA), then the LDFA is funded through tax-increment financing (TIF) similar to the way the Ann Arbor Downtown Development Authority is supported. A TIF district allows authorities like the LDFA and the DDA to skim the property taxes levied in the TIF district. The local LDFA then contracts with Ann Arbor SPARK for “business development services.”

Looks great on paper. Sounds good at a cocktail party. Jobs. Jobs. Jobs. In practice, the LDFA and Ann Arbor SPARK have done little but rob taxpayers, public schools and the District library of millions of dollars. SPARK’s job creation numbers are suspect because the company has never allowed an outside audit, but rather fills out its own report and hands that over to the LDFA.

How’s that working out for ya, Ann Arbor?

Cap Con reporters Jarrett Skorup and Matthew Needham took a close look at the latest Michigan 21st Century Jobs Fund annual report. It was some interesting reading and should be on the summer list for everyone concerned with cuts made by the local school district. Here are the results of $8 million in taxpayer money going to SPARK, according to the Cap Con reporters:

A state fund intended to create 390 Michigan jobs has loaned $7.7 million to 35 companies and created 79 jobs — only 20 percent of the number initially promised.

Ann Arbor SPARK received an $8 million grant in 2006 to create the Michigan Pre-Seed Capital Fund, which used $7.7 million of that amount. The grant was awarded as part of the Competitive Edge Technology Grants and Loans program, which exists “to encourage the development of competitive edge technologies to create jobs in the state.”

Since 2006, Ann Arbor SPARK has created six figure paying jobs for their own employees, and with the $8 million in taxpayer money only created a fraction of the jobs promised. The problem is, obviously, a total lack of accountability. Politicians appointed to the SPARK Board of Directors, including the Mayor of Ann Arbor, the Mayor of Saline (now looking to head to Lansing and the State House) have done nothing to protect the interests of the taxpayers from the multi-million dollar scam that is Ann Arbor SPARK. Instead pols rub elbows with the head of the University of Michigan Musical Society, as well as the VP of AnnArbor.com, pat each other on the backs, and together piss away millions like there’s no tomorrow.

Cap Con reporters asked SPARK VP Skip Simms about the fact that only 20 percent of promised jobs had been created. Here was Simms’s biz-no-babble answer: “We saw a need for early stage capital for start-up technology based companies, which the private sector wasn’t providing at the time.”

That’s biz speak for: “Hands in the air, Big Boy. This is a stick-up.”

Short URL: http://www.a2politico.com/?p=14071

7 Comments for “Still Stealing You Blind: Ann Arbor SPARK Spends $7.7M & Creates 79 Jobs”

  1. @Concerned, let me assure you that A2Politico is not the first or only media outlet to question the “job creation” claims of the MEDC and/or Ann Arbor SPARK. The “proof” you’re looking for is found first in MEDC annual reports (such as the 21st Century Jobs Fund report linked to in this piece), as well as LDFA reports, which the entity has only just started keeping. The LDFA is the authority that oversees the work of Ann Arbor SPARK. Rob links to a couple of the A2Politico pieces that look at the LDFA reports, as well as the SPARK annual reports. You are so right that building a business takes time. However, taxpayers are being soaked for tens of millions of dollars given over to companies that fold, or just never create the promised number of jobs. In Ann Arbor, Google is the perfect example. The company has created about 25 percent of the jobs promised in 2008 when the company was given hundreds of parking spaces and other accommodations by city officials. How much time does Google need? The final point is this: why should taxpayers have to fund tech start-ups or “incubators” at all, as opposed to, say, citizen services? The Detroit papers, the Lansing State Journal and the Cap Con have all done some very important investigative work concerning the actual numbers of jobs created versus jobs promised in exchange for taxpayer subsidies and loans.

    It’s an issue we have to continue to pursue. There’s, literally, $1 billion dollars at stake, and our state is simply not getting value for its money, if we look at the 900 jobs created, total, since 2006 in exchange for $148,000,000 dollars in taxpayer funds. Oh, by the way, the majority of that money went to Ann Arbor firms, many of which folded or still have not created jobs.

  2. Concerned Annarborite

    I would disagree that this is a great article. It is quite a bit of opinion, and very little supported facts. I don’t have an opinion one way or the other of whether Ann Arbor Spark is actually benefiting the A2 Economy, however, reading a piece like this article is infuriating in general. If you are going to have such negative opinions about any local company within our community, PROVE what you are saying is true. What are the actual numbers? So you say that Spark didn’t create as many jobs as they were supposed to, fine… if they are an incubator for tech companies it takes time for those companies to build enough brand strength and financial backing to HIRE people. How else do you think those jobs are created? Companies do not grow overnight, it takes time. Any level of business person understands that, and so should you before you blast your opinion out to the world without actual evidence to support your claim.

  3. Just another great piece on A2 SPARK and the myth of it’s value and how recreating SPARK shark fish tanks around Michigan will do any good. Like it was so well put, it’s good alright, for a few in the cabal of cigar smoking investors that have been harvesting YOUR MONEY thru SPARK and other public funds like the lastest source of wealth for the A2 1% the “Michigan Strategic Fund” and other funds related to MEDC and boards they already controlled, but now completely dominate.

    For Rick Snyder the pay off is clear, once he finishes his single term (I’m still one of those convinced that his earlier statements made it clear that was his plan – he has NEVER stayed in a job for 8 years), he and his buddies, some of whom are making big money thru MEDC like Finney, and the whole Emergency Manager “business” as consultants and support staffing/services (12 firms that pushed PA4) to EM Mangers themselves.

    These are great models Snyder and his ilk much money win, loose or draw in the early stages of these initiatives and projects, regardless of any long-term value delivered to the People of Michigan (NOT MI BLM members and corporations whose taxes are few, if any in the case of DTE and CMS (Consumers) Power) with everyday citizen tax monies.

    Gone are the days of public service and the common good, IN are the days of harvesting any source of public capital they can steal or use for collateral to fund their adventures.

    Rob – Great job. There is more to this story, and the rise to power of Rick Snyder, SPARK is just one way of making the rich richer, the rest of the story lying within the business orgs (and you can ALEC to the mix) on how “they” have created “Corporatocracy” in Michigan for their own person gain.

  4. @Tom thank you as well. This ‘job creation’ stuff has been business as usual for way too long. The state has lined the pockets of biz for much too long and gotten much too little in return. The facts never fail to amaze me. School districts are being shafted all over the state so that few actual jobs can be created, pols can have something to say when they campaign and the people involved in these scams can pay themselves 6-fig. salaries.

  5. Alan, thanks a bunch! These posts on Ann Arbor SPARK just write themselves. The Cap Con reporting was just great and A2Politico has been drilling away on this issue for a couple of years now. Putting the two together seemed to work pretty well. It’s a compelling topic from the perspective of the cuts the state has made to ed. funding. The local LDFA takes even more money away from the AAPS. The Ypsi public schools, too poor to be skimmed from, have never been tapped for money.

  6. I concur. Great article.

    It’s terribly unfortunate that I have to say this sounds like business as usual. What else can we expect from a system that addresses the insatiable need for profit (read: the extraction of social wealth for private riches) as the first given, but ignores the basic needs of people and ecology.

  7. Alan Goldsmith

    Great article!

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