County Steers Federal COVID Money to Gigantic Sports Complex

A Michigan county wants to use federal COVID relief money on a massive sports complex rather than dedicate it to core government services. An economic expert says the county’s projections of its benefits are much too rosy, and local township officials are pushing back, arguing the money would be better spent on roads.

Lenawee County officials propose to build a nearly $90 million sports tourism facility in the city of Tecumseh, called Project Phoenix. A subcommittee of the Lenawee County Commission recommended using $10 million in federal American Rescue Plan Act funds. The county has applied for nearly $30 million in state and federal government funds and says there may be as much as $54 million available.

The chairman of the county commission, David Stimpson, is an attorney and business owner in the city of Tecumseh. He voted to approve the $2.3 million purchase of a 50-acre parcel to host the project.Through his company, he also purchased nearby land, which may stand to rise in value if the project were developed. Stimpson said he has no plans to sell those properties, so he won’t financially benefit, and other county commissioners have denied there is a conflict of interest.

Some governments in the county, however, are unhappy about the idea. The city of Morenci and the townships of Deerfield and Ogden are opposed for a variety of reasons. Deerfield Township would rather see the federal relief money spread around the county for transportation spending. Lenawee County officials say they do not have the authority to spend the funds on road construction. But the rules governing the federal money say it can be used for roads, and other counties have done that, according to data gathered by Deerfield Township.

The county projects $480 million in economic output from the project, with more than 45,000 hotel rooms booked annually. It also says the sports complex will not take away revenue from any existing facilities in Lenawee County.

Chris Douglas, an economist at the University of Michigan-Flint who studies sports subsidies, says the $480 million projection would mean an 18% increase in the county's annual GDP, which “seems implausible, to say the least.”

That number is not found in the economic impact study for Project Phoenix. That report projects a profit of $55,289 in year one, rising to $1.27 million in year 20. This means it would take 75 years to recoup the construction costs of the facility.

“Which is a horrible payback,” Douglas said. “No one in the private sector would undergo capital investment when it takes 75 years to recoup the investment. It is worse than that because debt service is budgeted at $0.”

Other municipal sports complexes have failed to live up to their promises. The Kalkaska County Board of Commissioners had to repeatedly go back to voters for an operating millage to support operations at the Kalkaska Kaliseum. Bad projections for Eastwood Heights, a commercial and residential complex, has threatened to push Lansing Township into bankruptcy.

The Lenawee County Board of Commissioners did not respond to a request for comment asking how it arrived at the economic impact figures or whether it thought the federal money could be given to townships to be used for road funding.