Long-term impact of studio debt detailed
By SUE SUCHYTA
Sunday Times Newspapers
ALLEN PARK – Mayor Gail McLeod provided a straightforward state of the city address Aug. 29, explaining in detail how declining tax revenue and the failed movie studio debt continues to impact the city’s finances.
While much of her speech covered the day-to-day workings of the city, its school districts, public safety and infrastructure investments, including road work, she emphasized the importance of a balanced and “resilient” budget amid financial limitations, calling for the “right decisions for the right reasons.”
The failed movie studio debt continues to burden the city. The $16.75 million in general obligation bonds, issued Nov. 18, 2015, will not be paid off until 2045, with more than $10.43 million in interest.
The city will make a $962,188 payment on the studio debt in 2024, $964,741 in 2025, and from 2026 to 2045, more than $1.2 million per year.
McLeod said the money could have been better spent elsewhere.
“This has not been a deterrent to the city moving ahead due to the hard work and diligence of our administration, department heads and employees,” she said. “Our administration and departments all work very hard to identify grants and programs available to assist with upgrading our parks, providing funding to offset the total cost of emergency equipment funding and to help with the employing and training of individuals for public safety and other programs that will improve and enhance our city.”
McLeod pointed out the city’s good debt, which includes the city’s community center, major road construction projects, including the restoration of Rosedale Boulevard, and the infrastructure and roadwork on Reeck Road.
The mayor explained that the taxable value of property in the city has also decreased. In 2008, it was $1.04 billion, while in 2016 it dropped to $702 million. Currently, the 2023 taxable property value is $939 million.
McLeod explained how this translates to net revenue.
On June 30, 2008, with $23.6 million in total revenue and $22 million in expenses, net revenue was $1.6 million.
On June 30, 2022, with $24.1 million in total revenue and $23.8 million in expenses, the city’s net revenue was $300,000. The expenses include the studio bond payments and interest.
McLeod said she hopes the city’s supporters will continue to work together to build a brighter future for Allen Park.
She said the city has always been resilient, and with good management and the ability to make tough decisions the city can continue to grow and prosper.
“It takes teamwork to keep us on the right path,” McLeod said. “Our team is focused on the needs of our community, realizes our financial limitations and is able to prioritize spending for the benefit of both our employees and our community.
“It is our responsibility and the responsibility of those who succeed us to understand that at times, we may need to make some difficult decisions. It is easy to say ‘yes,’ and it is often difficult to say ‘no,’ but we owe it to our residents, our employees and our retirees to make the right decisions for the right reasons.”