Labor Pains: Because Being in a Union can be Painful

Is the UAW’s Black Lake resort in the red?

It’s a pretty well known fact that the United Auto Workers operates an award winning golf course and resort in Northern Michigan. FOX News recently reported that “the Black Lake club and retreat, which are among the union’s biggest fixed assets, have lost $23 million in the past five years alone, a heavy albatross around the union’s neck as it tries to manage a multibillion-dollar pension plan crisis.”

But here is a new wrinkle. How much is the club really worth? That’s important because a local county commissioner claims the union owes tiny Waverly Township millions of dollars in property taxes.

According to the union’s LM-2 forms, the club and golf course are worth $33.6 million.

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But in 2007 the union protested its tax assessment of $13.7 million, and asked the Michigan Tax Tribunal to lower its total cash value to just $10 million, according to documents I obtained from the Tribunal. Here are the settled amounts, which total $12.3 million.

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The difference between the UAW’s LM-2 and the Tax Tribunal filings amount to more than $21 million dollars, which would translate to around $770,000 in property taxes the UAW isn’t paying to Waverly Township each year, if you accept their LM-2 appraisal (the township’s treasurer advised me that the rate is around 3.6%).

Here is how the Waverly Township Supervisor explained it to the Cheboygan County council:

Waverly Township Supervisor Tony Matelski advised that he received notification of a tax appeal by the UAW again this year. He said that two years ago the UAW appealed and was awarded a large reduction. Mr. Matelski said Waverly Township cannot afford to fight the appeal and said it is time the UAW starts paying their fair share here.

Personally, I don’t think anyone–including the UAW–should be paying a cent more in taxes than they legitimately owe. At the same time, something doesn’t add up.

Black Lake’s property assessment isn’t the only thing that doesn’t add up. The operations of Black Lake are conducted by two for-profit entities called UBG, Inc. (golf course) and UBE, Inc. (education center). In 2007, the auditors report for those organizations found that they lost more than $10 million combined (documentation found here and here).

So what was their single largest expenditure? You guessed it, their pension fund! Apparently any pension fund connected to the UAW ends up in disarray, whether it’s $5.9 million dollars at their luxury golf resort, or the multi-billion dollar catastrophe at GM, Chrysler, and Ford.


Categories: Center for Union FactsEFACUAW