(April 1, 2010) YpsiNews.com has learned that lawyers from Michigan State University are in Ypsilanti this week to finalize the agreement to purchase Eastern Michigan University for $24 million. While all eyes are focused on Indianapolis and the MSU Spartans return to the NCAA Men’s Basketball Final Four, lawyers from the high powered Lansing law firm of Hykema, Lostit met with corporate counsel at EMU to discuss terms of the takeover.
Ypsilantians across the city were stunned upon learning the news.
“It seems as if something like this happens every year to Ypsilanti”, said long time Ypsilanti resident and business owner Karen Maurer. “I am not sure Ypslanti can take much more of this.”
Sources tell YpsiNews the takeover should be completed by August 2010, just in time for new student orientation.
So why is MSU buying EMU? YpsiNews takes you inside and explains what no one else wants to explain about the deal.
The Doyle Letter
The roots of this merger goes back to September 3, 2003 when then EMU Vice-president for Finance Patrick Doyle wrote a letter to EMU Regent Jan Brandon. The three page Doyle Letter, as it was to be called, was always rumored to explain the finances surrounding the controversial Presidential Palace.
Ann Arbor News sued EMU in a Freedom of Information Act case asking for a copy of the Doyle Letter. The Ann Arbor News, not too surprisingly, lost the case when the Appeals Court and Michigan Supreme Court ruled in favor of EMU.
The problem was the Ann Arbor News was too specific in their FOIA request when they asked to see the Doyle Letter.
In December 2009, just two days before Christmas, YpsiNews submitted a new FOIA request to EMU this time asking for all letters in 2003 where the authors last name begins with the letter ‘D’.
It worked, YpsiNews.com got the Doyle letter and a letter about a leaking toilet in Pray Harold.
What was inside the Doyle Letter shocked even the normally unflappable YpsiNews Investigative Team.
While the Doyle letter did indeed disclose that the presidential palace had run far over budget, the shock was that the memo outlined how EMU could hide the cost overrun through an acquisition by EMU of another University.
Doyle’s plan was ultimately rejected by the Regents as unworkable because they couldn’t figure out how to buy another University and not make it look like they were covering up the costs surrounding the presidents house.
Regent Brandon, who has close ties with MSU, let it slip in 2008 to Michigan State Athletic Director Mark Hollis that it was possible for a state run university to buy another state run university.
Hollis began quitely lobbying MSU Regents and alumnus for the Athletic Department to buy a University and specifically EMU. Hollis believed EMU was the right choice as it was close to Lansing and it was likely to piss off the most Wolverine fans being that EMU was just 7 miles to the East of Ann Arbor.
Little did Hollis know how quickly MSU alumnus were willing to fork out the green. MSU raised the nearly $35 million they thought it would take to buy EMU in just 6 days. Hollis has not said what they plan to do with the remaining $11 left over after the deal with EMU closes.
State Legislature Not Happy
“You can’t just buy a University” exclaimed State Representative and perennial gubernatorial candidate Alma Wheeler Smith (D-54). “There are rules, this has to go before a committee and be approved by the legislature. We have to have hearings and town hall meetings!”
Gubernatorial candidate and current Attorney General Mike Cox (R) not surprisingly, disagrees with Smith.
Cox said in an AG opinion released on Thursday, April 1, 2010 that the public university is a creature of the State Constitution. Cox went on to say the transfer, ownership, or management of a State University is not subject to the approval of the state legislators nor the voters. The only requirement would be approval by both the Boards of Regents of EMU and MSU. The Board of Regents are independent bodies, they can do as they please with no accountability to the governor, state legislature, or the voters.
Cox, a Michigan Wolverine, seemed nonplussed that he just wrote an opinion that says that Board of Regents at Public Universities don’t have to listen to the governor
“Who cares”, said Cox. “The Board of Regents at Public Universities in Michigan have never been accountable to anyone, this opinion doesn’t change anything.”
When this reporter reminded Cox that he was running for governor, Cox tilted his head to the side and said, “Oh.”
Wolverines not happy
At first, outgoing University of Michigan Athletic Director Bill Martin also seemed nonplussed about the MSU-EMU merger.
“Who cares”, said Martin repeating an oft heard phrase from U-M alumni. “We kick EMU’s ass every year, nothing will change.”
Apparently Martin, like most of the rest of the nation, can’t fathom why MSU would want to buy EMU.
“It’s the Economics, Stupid”
So why would the MSU Athletic Department buy another University and why EMU? It is all about the scholarships.
Since MSU is acquiring an already establish NCAA Division I-A school, MSU will be able to maintain two football and two basketball programs. In a quirk of the NCAA rules, since MSU and EMU will be goverened by a single Board of Regents, student athletes can transfer from EMU to MSU without losing a year of eligibility. This is huge, says MSU’s Hollis.
With this purchase MSU has in effect created their own farm team system for all college sports. This will change college athletics forever and catapult MSU Sports to the top echelon of college sports.
For $24 million, MSU has been able to double the number of available scholarships. For football, MSU can increase their scholarships from 85 to 170 in a single year. The doubling of available scholarships will apply to all sports at MSU
When it was explained to U-M’s Bill Martin why MSU was buying EMU, Martin responded “No comment.”
Former CEO of Dominos Pizza David Brandon is the new incoming Athletic Director of Michigan to replace Martin and yes EMU Regent Jan Brandon is married to David.
Will other schools look to buy other smaller universities?
Already Norte Dame is in talks to acquire Sun Belt Conference school Old Dominion and Penn State is looking to acquire Lehigh University.
EMU’s Legacy and Advance Ypsilanti Future
The merger makes sense for some at EMU. EMU can once and for all put behind them the mess over the name change from the Hurons to the Eagles.
“Except for Athenians”, said EMU History Professor Mark Higbee, “everyone likes the Spartans. They are the bad guys that ultimately get killed but still became heroes. Besides, the EMU football team won’t have to change the colors of their uniforms, so it saves the University money. That is a good thing.”
Ypsilanti Mayor Pauli Schwaibler, whose campaign slogan in 2006 was “I am going to march on Lansing to demand our fair share of taxes.” was relieved when he learned that Lansing was in town this week.
Not quite understanding it was Michigan State University in Lansing that was coming to Ypsilanti, Schwaibler saved some shoe leather and walked over to the Sidetrack where the attorneys had taken a break for lunch.
Schwaibler asked if they would like to purchase Water Street for $22 million.
The lawyers politely declined, saying that they only had enough bags of cash for one money pit and for $2 million more, EMU seemed like a better deal.
Reporter Steve Pierce is a former TV weatherman and made his first Final Four appearance with CBS in 1984 while living in Albuquerque. In his spare time he reads other peoples email using Wireless Ypsi.
EMU Student government hosted a debate over propsed changes to Michigan’s Concealed Carry laws. Representatives from the NRA and the EMU Police department argued for and against the concealed carry of firearms on campus.
Advocating for concealed carry was Reid Smith, a member of Students for Concealed Carry on Campus, and Professor David Coy, an accounting professor at Adrian college and a volunteer on the Board of Directors for the National Rifle Association. Coy arrived about 15 minutes late.
Arguing against guns on campus was Paul Leighton, a criminology professor at EMU, and Greg O’Dell, Chief of the EMU Department of Public Safety.
Just over 100 students, staff, visitors, and EMU police officers attended the nearly two hour debate.
Michigan law prohibits anyone under 21 to carry a concealed weapon. So a large number of EMU students would not be permitted to hold a concealed pistol license as they are too young.
Chief O’Dell said he was opposed to the possession of guns on campus as it would increase the rates of suicide. O’Dell said cops have an extraordinarily high rate of suicide because of easy access to guns.
According to NIH and the FBI, police officers are twice as likely to commit suicide as the general public. Leading one audience member to ask after the debate if perhaps EMU police officers should not be permitted to carry guns on campus.
Ann Arbor.com reported about one student who told the story, “My aunt was murdered by someone with a concealed weapons permit,” she said as her voice began to crack and she fought back tears. “Just because people go through these classes doesn’t mean they won’t kill someone.”
The student wouldn’t give her name and left before the debate ended. A student sitting next to her said the aunt was killed by a family member in their home. The murder apparently had nothing to do with the concealed carry of a firearm.
Under Michigan law and the Michigan State Constitution, concealed carry is currently allowed on the campuses of public universities except concealed carry in dormitories and classrooms. The EMU Board of Regents passed a rule against the possession of any firearms while on campus.
According to a recent ruling from Michigan Attorney General Mike Cox and the Michigan State Police, licensed concealed carry permit holders may openly carry a firearm into a pistol exclusion zones including dormitories and classrooms.
The carrying of a concealed weapon on campus can be confusing. During the debate, it was pointed out that off-duty police officers that are also EMU students have carried firearms into classrooms. This is apparently a violation of the Regents policy. According to the university no action has been taken against these students.
Moreover, an officer or CPL holder that drives to EMU and then safely stores their firearm in their vehicle is still in violation of EMU Regents policy while their actions are legal under state law. Michigan State University Regents addressed this confusion as they too had a complete ban on firearms.
In June 2009, MSU Regents changed rules to allow the carrying of concealed weapons in open spaces by licensed concealed permit holders while still barring firearms in buildings. According to MSU spokesman Kent Cassella, “The rules were changed to better align with county and state law.”
Lansing’s Statenews.com reported, “At the University of Michigan, guns still are completely banned, with the county prosecutor enforcing the ban, (MSU Trustee Colleen) McNamara said. She said the prosecutor who handles crime on MSU’s campus did not prosecute people who violated MSU’s ordinance, instead siding with state law and prompting the board’s vote to change policy.”
(April 1, 2009) Ypsilanti has been a hotbed for movie shoots and star watching from the burgeoning film industry in Michigan. Things are about to get hotter.
But don’t call it porn, they want to be called the Adult Movie industry.
What ever you call it, it is a $15 billion dollar a year business with the largest players traded on the stock exchange.
In 2004, over 11,000 new adult movie titles were released world wide. Many studios can crank out one or two new films per week.
On Tuesday, while most eyes were focused on the Sidetrack in Depot Town as filming continued on “Betty Anne Waters” starring Hilary Swank and Minnie Driver, a small group of executives from Vivid Entertainment and Larry Flint’s Hustler Video toured the former Ford/Visteon/ACH facility in Ypsilanti.
Agents from the two studios as well as a team from Great Lakes Site Selectors from Columbus, Ohio have been scouting locations in Michigan for a new studio. They are drawn to Michigan and the 42% tax credit for films produced in the state.
The 30+ acre site includes nearly 1 million square of office and warehousing space and includes over 600,000 sf of open bays perfect for sets and sound stages. There is also nearly 200,000 sf of Class A office space.
Warning: Some Web Links in this story connect to adult websites and may not be appropriate for all ages or for the work place.
Automotive Components Holdings (ACH) has the property listed for $7.6 million. Studios execs say they are discussing an all cash purchase.
Given the recent recent problems in the automotive industry, ACH, which is a holding company for Ford Motor Company, is desperately short of cash.
Officials from ACH would not go on the record but privately said the would consider a lower offer if they could close in the next 60 days. “Cash is king,” said one ACH executive.
It is hard to imagine Governor Granholm or the Michigan State Legislature could have predicted movie tax credits would be used to fund X-rated movies, the Michigan Film Office confirmed that adult movies would qualify for the film production credits.
Ypsilanti City Planner S. Murf and City Attorney Klem Barista were studying the city’s zoning rules in detail. Murf said after an initial review, it appears an adult movie studio is a permitted use in the manufacturing M1 district.
This is the first time Hustler and Vivid are discussing working together on a production facility. Because of the fractured nature of the business, there is little chance of scrutiny from the Justice Department on this joint venture.
Attorneys familiar with the deal said, “President Obama has bigger worries on Wall Street and Detroit and is unlikely to be worried about happenings in the Adult movie business.”
Despite what had been reported earlier, the Adult Movie industry is not looking for a government bailout. “It was a publicity stunt and it worked,” said late night huckster Joe Francis from Girls Gone Wild.
It is likely Michigan-based company YpsiTucky LLC would be setup to run the studio and rent space to other porn studios wanting to move production to Michigan.
Site selectors were excited about the location. With so much space, it will be easy to build permanent sets including a jail, dungeon, castle, and beach house that are staples in most adult films. With so much indoor space, the studios can film year round.
Hustler Video is part of the massive adult entertainment empire Larry Flint Productions whose holdings including Hustler magazine and Hustler Hollywood Retail stores
Vivid Entertainment is home to some of the industry’s biggest starlets. Called Vivid Girls, they include Jenna Jameson, Briana Banks, and Lanny Barby, who are among hundreds of women signed to exclusive contracts much like in the bygone days of the Hollywood studio system.
The demographics of Ypsilanti also make sense said Theresa Flynt, VP Licensing and Business Development, Hustler. The industry is dependent on continually finding new stars. Being able to draw from two massive universities, the University of Michigan and Eastern Michigan University, for new talent is a plus for producers working on a tight schedule.
Paul Fishbein publisher of Adult Video News, the industry’s largest trade magazine, was shocked to learn executives were looking outside of California for new studio space.
The Adult Movie business, including AVN, has for years called California’s San Fernando Valley home of the porn industry. Locals refer to it as Silicone Valley.
Fishbein said, “If Michigan is willing to fork over a 40% (sic) tax credit for every movie, it makes good business sense for adult movie studios to look at Michigan.”
The Mayor of San Fernando, Guy Grabbit, is not happy that Ypsilanti is poaching the Adult movie business from his town.
“Hands off,” Grabbit warned Michigan politicians eager for a piece of the action, “We invented porn and it belongs here in California.”
Grabbit admitted he had no way to match the 42% tax credit as his city, like many others in California, is facing huge budget shortfalls.
Current Ypsilanti mayor Pauli Schwaibler, who works for one of the automotive companies in the region said he hoped ACH could find a better buyer. ACH executives said there hasn’t been a lot of interest in the Ypsilanti property, but they are willing to talk to any buyer the City thinks would be better.
Ann Arbor Spark was asked if they had anything to do with this site selection group visiting Ypsilanti. Spark spokesman Dean D. Milker responded they didn’t know the property was for sale.
The site selection team’s next stop was Water Street. They expect to conclude their tours on Thursday and could make an offer on studio space in the next 30 days.
Reporter Steve Pierce is a retired adult movie actor and fiction writer who today restores old houses and spends time with his dog and three cats.