Take It With You
The dedication of the new JW Marriott last week was a grand extravaganza on a gorgeous September morning, with flags flying, live music, U.S. Marines in dress uniform with swords held high, hovering helicopters and dignitaries by the ton. Front and center was Rich DeVos, and as is his custom, he was not at a loss for words.
The luxurious new hotel seems to reflect DeVos' image of Grand Rapids, or at least what he thinks it should be. Word of this luxury hotel with an excellent, thoughtful staff will spread and bring more people and more business to the region. The people of the region should put themselves out to visitors, he said, and we should always be able to be proud of what goes on here. DeVos seized upon that naughty advertising slogan, "What happens here, stays here" (isn't that used in a casino ad?), and he reversed it.
"What you did here doesn't have to stay here. Take it with you,” he said, and let people elsewhere know what a great place Grand Rapids is.
Speaking of casinos … DeVos made a fleeting reference to them, but after the public ceremonies, he said he has not discussed a casino idea with Peter Secchia. And he does not think a casino would make Grand Rapids a better place for conventions.
"I would not recommend a casino," said DeVos.
**Just a few weeks ago, everybody was saying the FAS 109 glitch in the new Michigan Business Tax was going to be fixed right away. Or so they said.
Now, according to Tricia Kinley, director of tax policy at the Michigan Chamber of Commerce, it's being "held hostage," tied to the tracks in the middle of the budget battle that (as of press time) was threatening to trigger a train wreck in Michigan state government next week.
Financial Accounting Standard 109 is one of many federal rules passed in the wake of the Enron scandal a few years ago. It's just a required accounting procedure regarding deferred tax liabilities at publicly held companies, to make sure that the health of these companies is more clearly understood.
"Our business tax needs a provision to help account for these deferred tax liabilities," said Kinley. Without it, "Wall Street could easily look at these (publicly held) companies" in Michigan "and give them some negative ratings."
"What's happening is the governor is saying that she will veto the bill (to fix the FAS 109 glitch) if it was not accompanied by other items that the administration wants to see enacted. They're holding this fix hostage," said Kinley.
**Grand Valley Metro Council members clearly see some proposed legislative bills as a sign of the times: that state lawmakers will continue their crusade to eat away at local control until they drive municipalities into the same sorry financial condition the state is in.
Board members unanimously voted to oppose bills offered by state Sen. Wayne Kuipers, a Holland Republican. His first bill is aimed at cities that charge a non-resident involved in an auto accident a fee for emergency services. It would require cities to post signs at city entrances notifying drivers of the policy. His second bill would reduce state revenue-sharing payments by 15 percent to cities that charge the fee but don’t post the signs.
Neither of Kuipers’ bills was even remotely embraced by the council, and the mayors of two cities that do charge the fee had some harsh words for the senator and his legislation.
Kentwood Mayor Richard Root, who also chairs the council’s Legislative Committee, said Kuipers doesn’t understand what it takes to run a city and is leading cities down the “same sewer pipe” into which lawmakers have led the state.
“This clearly is another assault on a city’s ability to govern itself,” he said.
Root said instead of penalizing cities with further revenue reductions, Kuipers should work to restore those payments to full shares so cities wouldn’t need to find other sources of income to replace those lost dollars.
Wyoming Mayor Carol Sheets said Kuipers showed signs of arrogance and a lack of intelligence when he introduced his bills. She said her city is allowed to recover emergency costs under a 1951 state law, and Wyoming needs that income due to state revenue-sharing cuts.
Sheets also noted that when a driver gets ticketed for causing an accident, the state charges the motorist a fee, and that money goes into the state’s general fund. She said Kuipers sponsored that bill.
“What we’re doing is providing a service. What they’re doing is charging a fee,” said Sheets.
Losing local control is the council’s top legislative concern, ahead of six others on a list of what the regional planning agency calls “green light” issues.
“It’s getting to be scary time,” said James Buck, Grandville mayor and GVMC chairman.
**As reported in the Business Journal online edition, Herman Miller Inc. took a drubbing on the market last week when it followed a strong quarterly release with a surprisingly low forecast.
Shares of the company closed on the NASDAQ at $29.08 Wednesday, up 32 cents, but the stock fell after the results release that afternoon in after-hours trading to $27.08, close to its 52-week low.
The firm beat Wall Street estimates by four cents with earnings of 54 cents per share, an increase of 25.6 percent, but surprised analysts with projections of 51 cents to 57 cents per share for the second quarter. Wall Street was thinking 59 cents per share.
Sales increased 9.3 percent to $491.7 million, the company’s 15th consecutive quarter of year-over-year sales growth. But, as CEO Brian Walker pointed out, orders were off by 5 percent in the North American market and the company is expecting a “softening in the North American market.”
The Business and Institutional Furniture Manufacturers Association is forecasting U.S. industry growth of 2.3 percent in 2008, which would be the lowest positive growth on record.
Steelcase met with similar results. Despite meeting Wall Street estimates on all fronts with its second quarter results Thursday — which should have dismissed industry concerns —the stock dropped throughout the morning. The world’s largest furniture maker posted a 42 percent increase in profitability to $37.7 million.