A cautionary tale for the star-struck

Business Week has a story about a movie mecca you’ve never heard of, Allen Park, Michigan. This should be required reading for Maui citizens and mayors and council members, since we also have been tabbed as a suburb of Tinsel Town.

The Allen Park experiment was significantly different from the proposals floated on Maui, since it was to be a trade school, not a production center. Nevertheless, the framework of the agreement is something for us to be sure to avoid, especially the hold-harmless agreement. (I am surprised by this agreement, since usually it’s governments that impose hold-harmless agreements on businesses, not the other way around.

Still, required reading. Here’s the start:

Jimmy Lifton was supposed to be Allen Park’s savior. He arrived in the Detroit bedroom community midway through 2009, shortly after General Motors (GM) and Chrysler declared bankruptcy. The metro area’s jobless rate was 15.9 percent, and officials were desperate to get residents back to work. Lifton, a Detroit native and president of Oracle Post, an audio and video post-production company in Burbank, Calif., had just the idea: He wanted to turn Allen Park into a movie-making hub.

The overture wasn’t as random as it may seem. Michigan had a nascent film industry thanks to a generous tax credit offered at the time; the state had lured Clint Eastwood to film Gran Torino and George Clooney to direct The Ides of March.

In August 2009, Allen Park’s city council unanimously voted to sell $31 million in bonds to buy and improve 104 acres so Lifton could develop a $146 million studio as a tenant of the city. At the event announcing the partnership, then-Mayor Gary Burtka declared Allen Park “Hollywood 48101” (a reference to the city’s Zip Code), and Lifton spoke of cranking out movies the way Henry Ford mass-produced cars. Lifton promised 3,000 jobs, which would have made the venture, known as Unity Studios, the biggest employer in town. “We will be here 25 and 50 and 100 years from now,” Lifton said.

That script didn’t pan out. Lifton has vacated the property and returned to California, leaving Allen Park with a bad case of buyer’s remorse. “We were buffaloed,” says Tony Lalli, a former councilman who voted for the bond sale. “Everyone said they wanted it, and we went along.”