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Michigan ‘pork’ includes another $15 million for ex-GOP chair’s company

property with a sign on it
A national real estate company where former state GOP chairman Robert Schostak is a director has secured a third multi-million state grant to help it develop land in eastern Washtenaw County. A $15 million grant was tucked in last week’s state budget deal. (courtesy photo)

For the third time in just over five years, the Michigan legislature has found millions of dollars in big spending bills to aid a private development with ties to former state GOP chairman and prominent Republican donor Robert Schostak.

Part of the state’s $76.9 billion budget, approved overwhelmingly last week by the legislature, includes a $15-million grant for “water treatment” in  Salem Township in Washtenaw County.

Sponsor

The money is earmarked to aid the Salem Springs residential development along M-14 put together by Schostak Brothers & Co. Inc., a national real-estate firm based in Livonia in which Robert Schostak is a director.

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The Salem Springs money is one of more than 140 so-called pork spending grants, totalling over $680 million, that fund local projects across the state, including funds to fight hunger, help firefighters and police, pay for road, art, workforce development, housing and other projects.

Both Democrats and Republicans were successful in securing grants in their districts. Because of the enormity of the state’s $76.9-billion budget and the detailed negotiations between legislative leaders and Gov. Gretchen Whitmer’s office, individual grants are unlikely to be vetoed. 

In many instances, communities or groups that secured local funding were happy to identify the state lawmaker who helped. And lawmakers themselves are often eager to claim credit for bringing state money to their communities, including state Rep. Angela Witwer, D-Delta Township, who touted her success in getting $1 million for Charlotte firefighters, whose 23 volunteer firefighters had quit in frustration in March.

 

But so far, no one has stepped forward to identify which legislator sought  $15 million for Salem Springs. Rep. Donna Lasinski, D-Scio Township, and Sen. Jeff Irwin, D-Ann Arbor, who both represent Salem Township, told Bridge Michigan they did not request money for the Schostak project.

A spokesperson for the Schostak company said in an email it is pleased with the grant but did not know the details. “We couldn’t speculate on any one reason or individual as to why it ended up in a specific bill at this particular time,” Joshua Pugh said in an email to Bridge.

In April, the Schostak family’s political action committee donated more than $80,000 to a PAC that raises money for state Republican House and Senate candidates. Pugh, who noted he represents the development company, not individuals or the family, did not directly answer a question about whether the $15 million grant was related to the  political donations. 

“As I’ve said, the merits of this investment in Salem Township’s infrastructure are clear and obvious, and that’s why the bills received near-unanimous support in both houses of the legislature,” he said in an email.

The lack of clarity on which lawmaker secured the grant mirrors a previous state grant to the Schostak project: when the development received $10 million during the lame-duck session in December 2018, in Republican Rick Snyder’s final days as governor. At the time, documentation for the Salem Township grant did not identify its legislative sponsor.

Ultimately, former Senate Majority Leader Arlan Meekhof, a  Republican whose district was over 150 miles away from Salem Township, admitted he put in for it before he left office that year.

Whitmer temporarily blocked the earlier Salem Township grant when she first entered office, questioning whether it “the wisest use of taxpayers dollars.” The  administration ultimately allowed it to be funded, with Whitmer saying she was powerless to block budget choices signed by her predecessor.

She has not yet signed the latest spending bill.

Whitmer spokesperson Bobby Leddy said Tuesday the governor worked with Republican and Democratic leaders this year to “pass a balanced, bipartisan state budget that delivers on the kitchen-table issues that matter most to working families.”

On Wednesday, Leddy did not address specific questions from Bridge about the Salem Springs grant, except to say “we are currently reviewing the final budgets as passed by the legislature.” 

Long-time GOP donors

Schostak led the Michigan GOP from 2011 to 2015 and he and his family have raised hundreds of thousands of dollars for the Republican Party.    

On April 20, the Schostak Family Political Action Committee gave the state House Republican and Senate Republican campaign committees $41,975 each. That same day, Robert Schostak contributed $75,000 to the family PAC, state campaign finance records show.

The Schostak Family PAC has contributed $138,950 to state House and Senate Republican campaign committees since 2018, including $50,000 in 2020.

Spokespeople for Republicans in the House and Senate told Bridge they did not know who pushed for this year’s Salem Township grant but were looking into it. A state budget spokesperson said details on this and other grants,including the name of the legislative sponsor and justification for the award, will be submitted by the legislature in the future.

In the past four years, negotiations over such grants have become a way for the GOP-controlled legislature and Whitmer, a Democrat, to secure bipartisan approval of big spending bills, said Eric Lupher, president of the Citizens Research Council of Michigan, a nonprofit public affairs research organization.

The general spending bill — which included the 140 grants — passed the state Senate unanimously and the House by a vote of 97-9 and take effect when signed by Whitmer. Lupher said local grants awarded during the budget process are “nonsensical” when the state has bigger issues to solve, like crafting a tax cut (which Whitmer is still negotiating with Republican leaders) or improving local government funding.

“(The grants) allows them to get some of the more important things done,” Lupher said. “Does it have to happen? No, let’s be realistic about it.”

One of the biggest benefactors of big budget deals has been the Salem Springs development, just northeast of Ann Arbor, which has now received three multi-million-dollar state grants in spending bills negotiated between a handful of legislative leaders and the governor’s office.

The project is on land north and south of M-14 between Ann Arbor and Plymouth Township. Since 2001, the Schostak company has spent at least $28 million to acquire the land off the Gotfredson Road exit, the only undeveloped exit along the state highway between metro Detroit and Ann Arbor.

The Salem Springs project is set to have over 500 residential units and other commercial and office buildings

The project received it’s first state grant, for $10 million, in the summer of 2017 and the second in the waning days of the Snyder administration in December 2018. The grants’ goal, according to state legislative documents, was “to encourage economic development and future growth of the urban services district.”

Salem Township officials say they have never sought money from Lansing to pay for the project. Township Supervisor Gary Whittaker told Bridge the township has long told developers they must pay the cost of bringing water and sewer to the area.

“If they’re going to build something, they have to figure out how to pay for it,” Whittaker said of the township’s policy. 

Just east of Salem Township, Plymouth Township Supervisor Kurt Heise, like Whittaker a Republican, said he remains opposed to the Schostak project. Plymouth Township declined an offer from the developers to allow Salem Springs to tap into the sewer system Plymouth Township shares because there isn’t enough capacity, Heise said.

He’s not the only critic. The Schostak real estate group has battled Salem and Superior townships at times. Superior Township had resisted the use of Gotfredson Road, the township’s eastern boundary, to extend a sewer line to Ypsilanti.

Heise, a former state representative, was critical of the process that led the legislature to once again spend state tax dollars on a private commercial development. He said he wished his community had secured grants for other projects.

“Apparently this is the way it’s done,” he said Tuesday. “It should happen through a more transparent process.”

Pork to some, much-needed to others

The same grant process has brought glee to other communities. In Taylor, the local Little League was excited to learn that state lawmakers representing the community secured $300,000 for the Taylor North Little League to revamp its fields where over 1,200 children play baseball

“We feel very lucky, very blessed,” said Doug Clouthier, the league’s president. In 2021, the team made national news when its top team won the Little League World Series.

In Traverse City, a local curling club received a $2 million grant to help it open its own rink in a former Kmart. Sen. Wayne Schmidt, R-Traverse City, championed the effort, said Kevin Byrne, vice president of the club.

The club currently has 130 members. But because it rents space at the local hockey rink on two nights, only 80 can play each week, Byrne said. The new facility will allow for hundreds more to play. The $2 million is part of more than $7 million for the project.

Byrne, who said he has known Schmidt for 20 years, had long talked with the legislator about it and was appreciative of his help.

Lasinski, the Ann Arbor representative who is the house minority leader, defended the state legislature’s grant program in general. She said the money allows legislators to help people in their communities. 

“I don’t know how many people curl in Traverse City… but maybe that really is an important thing for the community,” she said.

Sponsor

But she said there can be problems when grant deals are made covertly. She said she was unaware of the $15 million awarded to the Schostak project in Salem Township, even though it’s in her district.

“In their best form these aren’t secret deals,” she said.

At a time when legislators cannot agree on tax refunds or how to better fund local governments, Lupher of the Citizens Research Council was critical of the decision to spend hundreds of millions on grants.

“I think the bigger the pot being appropriated it’s easier to stick $10 million here and $10 million there,” he said.

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