Updated: Thursday, 20 May 2010, 6:32 PM EDT
Published : Thursday, 20 May 2010, 4:45 PM EDT
GRAND RAPIDS, Mich. (WOOD) - Hangar 42 Studios was big news in February with the announcement that an old industrial building was being transformed into 450,000 square feet of permanent film studio space and offices for production people.
Governor Jennifer Granholm mentioned the project in her State of the State address that month, the first time anyone had heard about this plan publicly.
Hangar 42 could become the first to be eligible for a special state tax credit specifically for movie infrastructure projects. The credit amounts to 25% of the cost of the studio. The Michigan Film Office said it tentatively approved a tax credit of $10 million based on a project cost of $40 million.
But in March, Target 8 investigators asked the man who said he was the sole investor in Hangar 42, Joe Peters, about the project's cost.
A real estate listing for the property, part of the Avastar Park development on Alpine Avenue, was withdrawn just the day before the Hangar 42 announcement. That listing was for $10 million.
Peters said the $40 million figure he gave the Michigan Film Office in applying for the credit was just an estimate. The final cost, he said, will be lower, but didn't know yet what the final cost will be. Rehab work was underway, and Peters said he was buying the property ready-to-go from Alpinist Endeavors.
Alpinist Endeavors is run by developer Jack Buchanan Jr. and his attorney-father.
Neither Peters nor Buchanan returned calls from Target 8.
But late Thursday afternoon, Peters released a statement that said the price is $40 million, and an appraisal early this year put the property value at $45 million.
A spokesman from the Michigan Film Office said the tax break deal is not finalized and the state has asked for more information.
Target 8 Investigators request to see the Hangar 42 incentive application and the state's response under the Freedom of Information Act was denied on grounds the tax break is connected to the Michigan Business Tax. The law makes it a felony to reveal information obtained in administering that tax.
It also makes it impossible for the public to see first hand how this tax break is being administered, and makes the tax deal a state secret.