Michigan town of Allen Park to vote on saving itself from failed movie deal

About a half-dozen American cities have fallen into bankruptcy. In Michigan, at least four towns have been taken over by state appointed emergency managers as well. 

Late last month, the state took over another city, Allen Park, that found itself under financial water thanks to a Hollywood movie pitch - minus the happy ending.

On Tuesday, Allen Park citizens will vote on whether or not to raise their own taxes to fill the multimillion-dollar hole in its budget left from the movie deal.

The story begins in 2008 when Allen Park had taken a double hit with the collapse of the auto industry and the economic recession.

But in April 2009 a Hollywood producer and Michigan native named Jimmy Lifton made an offer that seemed too good to be true.  

Lifton's pitch: with the help of the city, he'd create Unity Studios, a $146 million television and movie production studio that would add 3,000 new jobs and make seven feature films its first year alone.

For a promotional video, Lifton faced the camera and said, "This is all about creating jobs and creating a workforce."

The mayor at the time, Gary Burtka, and the city council unanimously approved the proposal. They agreed to finance a $31 million bond deal for a 760,000 square foot site across the street from city hall. Burtka did not respond to requests for comment from CBS News.

But after a disagreement with the city over the lease, Lifton backed out of the deal, leaving the city with the property and the bill. Today, Unity Studios stands vacant - what current Mayor Bill Matakas calls an "open wound" he sees every single work day from his office at city hall.

"Unfortunately when the Unity Studio people backed away from the transaction, we didn't have an out clause to purchase the property. So we had to go through with the purchase," he told CBS News.

The movie deal has had lasting repercussions on the city's finances. This year the city had so little money it couldn't afford to put down ice on its local hockey rink.

Paul Antioch is Vice President of Allen Park Hockey Association and he says when he looks at the rink without ice it leaves him feeling "sick to [his] stomach." 

"I can't believe it has come to this," he said.

The 350 children who used to play in the Allen Park hockey rink are forced to practice and play games in a neighboring town.

When Antioch was a child he raised money for the rink, "I can remember walking door to door getting petitions signed for this rink to get it approved. And 40 years later we have no ice."

Now with the state saying it will take over Allen Park's finances, the citizens know more cuts are coming. Allen Park has already slashed its police budget by 25 percent.

Meanwhile, local officials say they have not heard from the producer Jimmy Lifton.

"This mayor or council, myself, I know of no one that's heard anything from Mr. Lifton," said Mayor Matakas.

After repeated attempts to speak to Lifton, CBS News went to Lifton's production office in Burbank, California. There, a woman who declined to give us her name, said while there are "two sides to every story" Lifton would not speak with us.

Today Allen Park's only real financial hope is a ballot measure on Tuesday to raise taxes -- already voted down twice by angry local residents, some of whom have called for a state investigation into the movie deal.

CBS News has learned that the Michigan State Police have been investigating the deal since August.

As for the sum total of the move into the movie business? It was one movie - this civil war "epic" that went straight to DVD.