Fairgrounds could get new tenants

Board considers leasing to shops, movie and music studio to boost funds for State Fair, create more jobs.

DETROIT -- The Michigan State Fair Authority board is mulling two proposals to lease unused land for a movie and recording studio and retail shops.

Over the next six months officials will decide whether the plans are a good fit, said Robert Burns, the Michigan Department of Management and Budget's director of government affairs assigned to the authority's board.

"We may approve one plan or both or a portion of both," Burns said. "We are still studying them."

The board and the management and budget agency would have to sign off on any plans. The state asked for proposals in May and received four of them.

The entertainment complex and retail plan merited a closer look, Burns said.

Officials said the area used for the fair would be specifically protected in any lease agreement and developers would have to agree to free up their parking areas, if there were any, during the two weeks of the fair.

Todd Schoonover of Troy said leasing some of the land could help keep the fair solvent. The event, which attracts about 230,000 people annually, only can spend what it makes, fair officials said.

"It would be great," Schoonover said on opening day as his 5-year-old daughter Alison checked out a petting zoo at the fair. "We supported the zoo proposal (for a regional tax). We like family events in the city."

Although board members say the plans have merit, the proposals can be scrapped and the process restarted, Burns said.

"We are not tied to anything," he said.

Fair Authority board member Robert Porter said he likes the entertainment complex and retail proposals because they could help sustain the fair and create jobs.

"We can make this (fair) self-supporting and enhance the opportunities in southeast Michigan," Porter said.

Fair General Manager Steve Jenkins said attracting year-round events and offerings on the 170-acre fairgrounds is a priority. Former Detroit Piston Joe Dumars operates a basketball gym on the fairgrounds; there is a golf driving range and an equestrian center as well.

The Shrine Circus was held on the fairgrounds last year after a seven-year absence and is coming back in 2009, Jenkins said.

Burns said such ventures will help to keep the fair strong.

"Utilizing the fairgrounds for the 50 weeks a year there is not a fair is a vital component," he said.
Company's affiliate suppliers employ close to 8,000

FOWLERVILLE -- With hillocks, groves and hedges on either side, the newest track at Aisin Seiki Co. Ltd.'s proving ground here seems like a quiet country road. But the rolling landscape was carefully arranged for a reason -- to keep vehicles conducting handling, braking and other tests hidden from view.

"It's designed so that two competing customers can come in and not be able to see each other," said Mike Benjamin, manager of operations at the proving ground.

Aisin, a $20 billion Japanese supplier partly owned by Toyota Motor Corp., will open the new three-mile oval track in January. Most of its customers will be other Aisin businesses and affiliates that also are expanding their operations, selling transmissions, brakes and other components not only to Toyota but also to Detroit's automakers.

In spite of the poor business climate, Toyota and its affiliates such as Aisin Seiki and Denso Corp. are growing in Michigan, where they have established a discreet but substantial presence and employ close to 8,000 people.

Toyota has just completed the expansion of its North American technical center in Ann Arbor, adding more than 300 jobs. Aisin plans to spend about $8.6 million to expand its technical center in Plymouth. Denso, which has two manufacturing plants in western Michigan, recently expanded a component testing facility in Southfield.

While Toyota is a relentless rival to Detroit's automakers, its parts-making affiliates have more ambiguous roles in the complex web of automotive relationships. Like the obscured vehicles on the proving ground, at times they may be competing against Detroit manufacturers, but in other instances, they are partners.

Aisin and Denso regularly appear on the annual lists of General Motors Corp.'s preferred suppliers because they deliver high quality components at a reasonable cost. Earlier this month, Chrysler LLC chose Denso as the first of its "suppliers of choice."

Toyota owns 23 percent of Denso and 22 percent of Aisin. The automaker accounts for slightly more than half of Aisin's North American sales of $3.7 billion, said Don Whitsitt, president of Aisin World Corp. of America, but "our goal is to diversify the customer mix." Aisin's second-biggest client in the region is GM.

Denso, one of the world's largest suppliers, says Toyota accounts for less than half of its sales in the region.

Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, says smaller U.S. suppliers that deliver parts to Denso benefit from the relationship, and not just financially. "They have taught second-tier suppliers their system, which has boosted productivity all over the state," McAlinden said.

The suppliers linked to Toyota also bring some financial stability to a sector that has been severely strained by the troubles of Detroit's automakers and a steep decline this year in U.S. auto sales.

Aisin and Denso are struggling in this environment, too. "Are we making any money? Probably not," said Whitsitt, who oversees Aisin's regional sales operations. Aisin has sustained a big drop this year in orders for truck transmissions and sunroofs for big SUVs, he said.
But the suppliers have not scaled back. Aisin is expanding its technical center so that instead of just adapting components designed in Japan for its U.S. customers, it will develop new products and designs for local clients. "It's true R&D," Whitsitt said.

The governor's pitch

The deal was sealed last week when the Michigan government offered Aisin a $1.3 million tax credit to support the expansion. "It's going to mean more jobs with high wages," Gov. Jennifer Granholm said in an interview.

In an effort to attract investment to Michigan, Granholm traveled twice to Aisin's headquarters in Kariya, in the Aichi prefecture in central Japan, to make her pitch.

"We pursued them," Granholm said. "Instead of just being victimized by globalization, we want to take advantage of globalization."

This year, globalization is taking its toll on the Japanese, too. Toyota, Aisin and Denso all expect their overall earnings to drop this year because of the weakness in the U.S. market.

Analyst Kohei Takahashi at J.P. Morgan Securities Japan Co. estimates Denso's full-year operating earnings will fall 28.5 percent to around $2.4 billion and Aisin's will drop 26 percent to about $1.3 billion. Takahashi also cut their forecasts for the two following years.

No indulging from Toyota

At the $60 million Fowlerville proving ground, formally called FT Techno of America LLC, President Mack Yuasa shrugs as he discusses the facility's profit outlook. The long-term goal is to support the growth and diversification of the Aisin companies in the region.

Aisin is a partner along with Denso in the ADVICS Co. brake system venture, which has U.S. offices in Plymouth. But otherwise the two big suppliers cooperate little in North America. In some areas, such as variable valve timing systems and certain sensors, Denso and Aisin are competitors.

And in spite of the family ties, Toyota does not coddle its affiliates. During the past year, relations between most automakers and suppliers have frayed under the added strain of soaring raw materials costs. But Whitsitt said relations with Toyota are always challenging. "

As compared with a year ago, there's no difference," he said. "They were tough then. They're tough now."

But he said Toyota is fair with suppliers and clear. "They have a fact-based way of doing business."
After pleading guilty, he'll leave office, serve 120 days in jail, repay $1 million, surrender law license

Detroit Mayor Kwame Kilpatrick has pleaded guilty, ending a nearly eight-month drama that has transfixed the region, paralyzed much of city business and halted a political career that once held such promise.

At 7 p.m., the mayor is expected to speak about his decision in a televised address.

Judy Smith, Kilpatrick's Washington, D.C.-based public relations consultant, said details are still being finalized, but 7 p.m. is the tentative time.

In a courtroom this morning, Kilpatrick pleaded guilty to two felony counts of obstructing justice by committing perjury. He will spend four months in jail, pay up to $1 million in restitution, and serve five years' probation. He also agreed not to run for office during that five-year span.
In addition, the mayor agreed to a no-contest plea to one count of felonious assault for shoving a sheriff's deputy in July who had tried to serve a subpoena on Kilpatrick's friend. He agreed to serve four months on that charge, too, but it will be served at the same time as his other sentence.

The deals also call for Kilpatrick to turn over his state pension to the City of Detroit, which paid $8.4 million to settle two whistle-blower lawsuits three former cops filed against the city. The mayor was charged with eight felony counts ranging from conspiracy to perjury to misconduct in office to obstruction of justice after the Free Press revealed in January that the mayor lied on the witness stand during a police whistle-blower trial and gave misleading testimony about whether he intended to fire a deputy police chief investigating allegations of wrongdoing by members of his inner circle.

In a rushed monotone, before a standing-room only audience, Kilpatrick told Wayne Circuit Judge David Groner: "I lied under oath in the case of Gary Brown and Harold Nelthrope versus the city of Detroit ... I did so with the intent to mislead the court and jury, to impede and obstruct the disposition of justice."

Sentencing will be at 2 p.m. Oct. 28 As part of the deal, Kilpatrick has two weeks to vacate the office of mayor.

Moments after Groner praised the lawyers for their work reaching a deal, Kilpatrick summoned his wife, kissed her and went back into a side room.

“Justice has finally been served,” University of Detroit Mercy law professor Larry Dubin said this morning.

“The deal that the mayor agreed to ... is a major victory for the prosecutor, the mayor and the people of the City of Detroit and State of Michigan."

Dubin, who has been outspoken in his criticism of the mayor, praised Wayne County Prosecutor Kym Worthy.

“For the way she prosecuted this case. She has demonstrated integrity in holding a public official accountable for serious criminal violations that constituted serious breaches of the public trust,” Dubin said.

Kilpatrick’s mother, Michigan Rep. Carolyn Cheeks Kilpatrick, issued a statement this afternoon. “While my heart is heavy, I support Mayor Kilpatrick’s decision to do what he believes is best for his family, our family, and the citizens of Detroit,” she said. “I would like to thank all those who have encouraged the Mayor and our family with your prayers, cards, and other expressions of support. I ask that you continue to pray for the Mayor and his family and the city of Detroit during this difficult time.”

In the moments before the plea this morning, and before huddling with his attorneys, a smiling Kilpatrick entered the third-floor courtroom in the Frank Murphy Hall of Justice and jousted with reporters sitting in the first row of the courtroom. He, apparently good-naturedly, told them their reports were wrong and they needed to check their sources. He did not elaborate.
He also shook hands with Christine Beatty, his former chief of staff and ex-lover. Beatty’s lawyers got Groner to delay her separate criminal case for a week while she tries to hammer out her own plea deal.

First Lady Carlita Kilpatrick sat in the audience, a few feet behind her husband, with a stern face throughout the proceedings. It was the first time she had been in a courtroom with Beatty since the scandal started in January.

The mayor had some other familiar faces in the courtroom, including Marc Andre Cunningham, a former aide to Kilpatrick who resigned shortly after the Free Press reported that he had been using a city-issued cell phone that was tapped by the FBI last year in an unrelated investigation.
Kilpatrick’s lawyers and Wayne County Assistant Prosecutor Robert Moran started the day at the Cadillac Place state office building, where they met for about 45 minutes with Gov. Jennifer Granholm. They updated the governor on the plea agreement, and she later cancelled historic removal proceedings that had begun a day earlier and could have resulted in Kilpatrick’s removal from his job.

In January, the Free Press published text messages Kilpatrick and Beatty exchanged on city-issued pagers. The article showed the pair lied under oath when they testified in a police whistle-blower trial last year that they did not have an intimate relationship. They also gave misleading testimony about the firing of a top police official, Gary Brown. Nelthrope was another cop who sued with Brown, both alleging their careers were ruined because of their involvement in an internal affairs investigation that could have led to the discovery of extramarital philandering by Kilpatrick.

Worthy cited the Free Press investigation in March, when he charged Kilpatrick with eight felonies and Beatty with seven. The charges included perjury, conspiracy, obstruction of justice and misconduct in office.

Prosecutors and lawyers for Kilpatrick have been mulling a deal for days, the talks intensifying late Wednesday and culminating in this morning’s guilty pleas.