Michigan lawmakers award $10M for project benefitting former GOP chair

Feb. 12: Whitmer changes course, blocks $10M grant that helps former GOP chair
Feb. 1: Gov. Whitmer rips Republican pork deals, but won’t block them
Update: Arlan Meekhof takes credit for steering grants to help ex-GOP chair’s firm
Update: Suburban leader wants Dana Nessel to probe $20M to help ex-GOP chair
Update: Who pushed $20M grants that help ex-GOP chair? Michigan records left blank

On the last day of December’s legislative session, Michigan’s Republican-dominated Legislature approved a $10 million grant to bring water and sewer lines to land owned by a company led by the former chairman of the Michigan Republican Party.

The grant will help add utilities to 1,400 acres near M-14 and Gotfredson Road in Salem Township in eastern Washtenaw County. Property records show 560 acres of that land are owned and slated for development by Schostak Brothers & Co. of Livonia. The company’s chairman, Bobby Schostak, served as chair of the state GOP from 2011 to 2015.

Legislation for the $10 million grant says it’s to help Salem Township “encourage economic development and future growth of the urban services district.”

Related: Michigan laws shield details of $10M grant to help ex-Republican chair

But the township of 6,100 residents has long maintained that private developers –  not taxpayers –  should fund infrastructure on the land, said Salem Township Supervisor Gary Whittaker.

He said the township has other needs and expressed displeasure at how the request was made using state tax dollars.

“I’m a conservative Republican. But this kind of stuff makes me sick,” Whittaker said.

Schostak, whose family has donated hundreds of thousands of dollars to mostly GOP candidates, told Bridge Magazine the grant will help the region and Salem Township, which he said asked developers for help in bringing utility lines to the area.

“We raised (the grant) as an option with state policy makers and appreciate their support for this kind of infrastructure and economic development project that can help strengthen the community and support families and schools,” he wrote Bridge.

Property records show Schostak Brothers has spent more than $28 million since 2001 on parcels north and south of M-14 between Gotfredson and Napier roads for a planned subdivision and commercial development.

Located between I-275 and U.S. 23, the area is by far the least developed in a corridor that has seen tremendous growth in the past 30 years.

But large-scale projects can’t be developed without water or sewer lines.

Neither Schostak nor several lawmakers who spoke about the spending to Bridge Magazine said they could identify who in the Legislature championed the project.

The $10 million grant was equal to the largest of the $113 million in “enhancement grants” that lawmakers approved on the last day of their lame duck session, Dec. 21.

The spending was included in a larger, $1.3 billion appropriations plan that was key to a compromise between Republicans and outgoing Gov. Rick Snyder to fund his priority projects such as toxic waste cleanup efforts.

The latest grant follows one in 2017 that directed an initial $10 million to Salem Township to also help with infrastructure work near Gotfredson Road and M-14 including land owned by the Schostak company. The spending was included in an appropriations bill that also awarded money to other communities.

No public champions

Bridge Magazine has reported that most of the grants approved in the final hours of the Legislature’s lame duck session were advocated by lawmakers to fund projects in their districts.

“Everybody had their own little pet project,” said State Rep. Larry Inman, R-Traverse City, who secured three grants for his district. “It was quite competitive around the state.”

But State Rep. Donna Lasinski, D-Ann Arbor, who represents Salem Township, said she couldn’t find out from lawmakers and legislative staffers who included the $10 million grant for water lines in the larger spending bill.

“I had absolutely no knowledge (about the grant) until the wee hours of lame duck,” Lasinski said.

She said the grant for Salem Township could have been better spent on communities such as Flint, Detroit and Grand Rapids suburbs that struggle to provide safe drinking water.

“Yet we’re willing to put $20 million (total) for water development for a for-profit company,” she said.

Now-former State Sen. Dave Hildenbrand, R-Lowell, who was chairman of Senate Appropriations Committee during lame duck, told Bridge he did not know who requested the money.

His counterpart in the House Appropriations Committee at the time, now-former State Rep. Laura Cox, R-Livonia, told Bridge she didn't know who backed the grant and said negotiations among legislative leaders and Snyder administration officials were private. 

Cox was identified as the advocate of the first $10 million grant for the project in a 2017 story in the Plymouth Voice newspaper. The article quoted Kurt Heise, supervisor of neighboring Plymouth Township, as saying Cox helped Schostak Brothers get the grant.

Cox told Bridge last week that she “neither denied nor confirmed” that account in the 2017 article.

Any attempt to single her out is wrong, she said.

“It would be preposterous to believe that one person such as myself, a state rep, would have the ability to put a $10 million grant in the budget,” she said.

“It’s voted on by the entire leadership, both sides (House and Senate) and the governor signs it. That’s the story. Not me, Laura Cox,” said Cox, who is now seeking the chairmanship of the state Republican Party.

The former governor could not be reached for comment. Bridge Magazine sent questions to Ari Adler, who served as his spokesman as governor. Adler said he is no longer handling Snyder’s communications but said he forwarded the questions.

"If no one is responding to you, then the choice may have been made not to respond,” Adler wrote in an email to Bridge.

In 2016, Snyder’s leadership political action committee got $10,000 from the Schostak Family Political Action Committee, which Schostak told Bridge is funded by his family’s donations.

As a candidate and later as governor, Snyder repeatedly said the state shouldn’t use incentives to chose “winners and losers” when it comes to development.

“Government is not qualified nor competent to pick winners and losers," he said in 2010 when he was initially running for office.  "It’s about creating the most competitive playing field.”

State records show the Schostak Family PAC has given $700,000 to political candidates since 2008, including $63,000 in 2018 to many members of Michigan's Republican leadership. Over the years, it has also given to some Democrats including Detroit Mayor Mike Duggan and U.S. Rep. Brenda Lawrence of Southfield.

As finance chairman of the state party, Schostak helped raise $30 million in 2010 for the Republican Party.

Schostak said his family’s political giving reflects shared values, including economic development.

“We support candidates and officials who have similar positions on issues we care about like fostering job creation, a strong economic climate, common sense regulations and fiscal responsibility, for example,” he said. “We’re involved in Lansing because that’s where state policy happens and we’re involved in the communities where we live and work because that’s incredibly important to us.”

Taxpayers to foot bill

Schostak Brothers & Co. envisions two developments in the area: North of M-14, covering 200 acres, and south of M-14, covering nearly twice as much land where the company hopes to develop more than 500 homes and commercial development.

“The grant is a smart infrastructure and economic development investment that will provide numerous benefits to the area and residents,” Schostak said. “It’s also intended to fit in with the township’s longtime master plan while maintaining its unique rural character.”

All told, the cost of bringing water and sewer to the property totals over $30 million, said Whittaker, the Salem Township supervisor. Schostak said construction of the utility lines could take up to two years after design and engineering is complete.

Whittaker said the Schostak company has previously asked the township to borrow the money through a bond which would be paid off by developer fees. Whittaker said the township declined.

“The Schostak people have done a good job getting taxpayers to pay for their project,” said Heise, the supervisor of neighboring Plymouth Township and a former Republican state representative.

Heise said Plymouth Township neighbors are worried the development could hurt their community.  

Salem Township has a part-time fire department and contracts with the Washtenaw County Sheriff’s Office for police services. Located just across Napier Road, Plymouth Township has both departments, and Heise said many fear those agencies will be burdened by the development.

Schostak defended the use of tax dollars and said the state’s money will lead to an economic boon in the region.

“A state grant like this helps cover necessary public infrastructure to inspire community economic development and manage growth, which stimulates jobs and tax revenues, and leverages private investment – again to help benefit Michiganders, communities and state,” he wrote to Bridge in an email.