Ex-Detroit Mayor Indicted on Fraud, Tax Charges

From the Associated Press:

A prominent Detroit pastor says the indictment of former Mayor Kwame Kilpatrick is another chapter in a "sad saga" that has gone on too long.

Kilpatrick was charged Wednesday with fraud and tax crimes. Federal prosecutors accuse him of enriching himself and others by milking $640,000 from a tax-exempt charity that he created as a way to enhance Detroit and improve the city's image.

The indictment says Kilpatrick used the funds to pay for yoga, golf, camp for his kids, travel, a video about his family, cars, political polling and much more. Defense lawyer James Thomas says he'll fight the charges.

The Rev. Horace Sheffield says the Kilpatrick "story needs to end." The former mayor is in state prison in an unrelated criminal case.

Romney Balks at Government Ownership of GM

With dozens of headlines surrounding General Motors and their bankruptcy filing, Republican leader Mitt Romney spoke to the Detroit News on how the government should handle the auto marker’s restructuring. Check out the article below.

The Obama administration and the United Auto Workers should immediately distribute their stock in a restructured GM to American taxpayers, former Republican presidential candidate Mitt Romney said Sunday.

"We don't want a president and the head of the UAW running General Motors," Romney, a Michigan native and son of former Gov. George Romney, said in an appearance on "Fox News Sunday."

Romney suggested that the roughly 70 percent of GM that the government could own after it emerges from bankruptcy should be immediately distributed to taxpayers, and the 17.5 percent that will go to a UAW trust fund for retiree healthcare should be handed out to UAW members.

Such a scheme is highly unlikely. The Obama administration has signaled that it wants to sell its stake as soon as possible, but wants to ensure that it recoups as much as possible of the billions of taxpayer dollars already pumped into the company. The UAW is likely to try to maximize the return it receives on its shares to boost its ability to pay for healthcare for retirees.

Romney repeated his criticism of the auto policies followed by both the Bush and Obama administrations, saying GM and Chrysler should have been pushed into a restructuring, either in or out of bankruptcy court, months ago.

Detroit's Hotel Doldrums

Detroit’s recently renovated hotel scene is struggling to keep up with tax payments as the town’s economy continues to deteriorate. Bizjournals.com published an article on the topic, and you can find an excerpt of their post below. Alternatively, the full story can be found here.

Just before a glittering new terminal opened at Detroit Metro Airport seven years ago, I flew out for an airport-arranged private tour. Then I drove downtown for my own self-guided view of the seamier side of Detroit's travel infrastructure.

Four of the city's once-famous deluxe hotels were ornate tombs, abandoned for decades and facing the wrecker's ball. Two starkly modern properties built in the 1960s were shabby and sorely in need of new ownership. Even the 73-story hotel in the Renaissance Center, opened in the late 1970s as part of a massive urban-renewal project, was dreary and depressing.

"TERRIBLE!" I scribbled in my notebook in 2002. "Someone should fix."

And fix they did. The Madison-Lenox and the Detroit Statler were demolished, but the Book Cadillac and the Fort Shelby received hundreds of millions of dollars worth of renovations and restorations. The Book, as locals call it, reopened to raves in October and the Fort Shelby came back to life two months later. One of the 1960s icons, the St. Regis, became a spiffy boutique property. The other, the Hotel Pontchartrain, was recently renovated and is now called the Riverside. The cylindrical skyscraper hotel at the Ren Center? It's a Marriott now, and it sparkles. And the city's three casinos have each opened upscale hotels with Vegas-style perks and amenities.

But this is Detroit, where hotel happy endings are always the start of the next lodging nightmare. If anything, the Motor City's hotel scene is in worse shape today than seven years ago.

More than half of Detroit's estimated 40,000 guestrooms are empty, and PKF Hospitality Research says lodging demand will fall further this year. The St. Regis is in receivership. The Riverside has been picketed by employees who say they haven't been paid, and the Detroit News says the hotel owes almost $700,000 in back taxes. One of the casinos is in bankruptcy and another is for sale. Only a handful of buyers have closed on the dozens of pricey condos atop the Book Cadillac. The Fort Shelby's new rental apartments are mostly empty too. And Detroit's REVPAR (revenue per available room), the key measure of financial health in the lodging industry, is one-third lower than the national average.

"The statistics are scary," admits Shannon Dunavent, general manager of the Doubletree Guest Suites hotel that was lovingly carved out of the carcass of the Fort Shelby. "I've been working in Michigan for 20 years and I won't lie to you. There's no new business in the market. We're all trying to steal from the other guy to survive."

It doesn't take a genius to figure out what's ailing Motown's hotels: The automotive business has been careening downhill for decades. Detroit has never been able to replace cars, and the thousands of related businesses that depend on the carmakers, as the city's economic engine. Hell, even Motown Records moved to Hollywood almost 40 years ago.

Land Rover LRX Revealed!

Check out the image below of the new Land Rover LRX. This car is being highly anticipated, and is expected to be unveiled at next month’s Detroit auto show. It has long doors, a sloping roof, 20" wheels, and a 2+2-cabin configuration. For more pictures check out AutoBlog.