Movie studio owner building in McKees Rocks is $540K in red
The movie studio owner awarded a $2.5 million state grant to build a soundstage and film offices in McKees Rocks owes more than $540,000 in taxes, loans and outstanding payments to contractors, a review of court and tax records shows.
Michael Dolan, president of Island Studios, has sued the state over claims he didn’t pay enough income taxes, defaulted on loan payments to Allegheny County and owes property taxes to the county, Pittsburgh, McKees Rocks and Pittsburgh Public Schools.
“Island Studios has been under agreement to pay back taxes and remain current on future taxes with the taxing authorities and any loans outstanding,” Dolan said Wednesday.
Bauer Excavating, a Butler company that built two parking lots for the studio in McKees Rocks, said Dolan owes it about $140,000 for work performed, penalties and interest on late payments, said Sarah Bauer, who owns the company with her husband Chuck. The couple offered Dolan a settlement of $92,000 if he paid by Oct. 1. They plan to sue for the full amount.
“Every time he promises a date, we don’t see the money,” Bauer said. “I’m shocked, because how could he get another grant?”
Dolan owes Gateway Engineers Inc., a Green Tree consulting firm, $26,500 from a past project, court documents show.
Dolan, 35, of Naples, Fla., formerly of Fox Chapel, said he thought disagreements with contractors had been resolved.
“I personally will work to make sure on behalf of Island Studios that all vendors, contractors and taxes are paid,” he said.
Gov. Tom Corbett announced last week that Dolan and Island Studios would receive $2.5 million for the McKees Rocks project.
“No state money is going out the door yet,” said Corbett spokesman Jay Pagni, insisting that the state will not reimburse Dolan until the project is reviewed.
Pagni said the Redevelopment Authority of Allegheny County did not alert the governor’s office about Dolan’s financial record when it suggested the project.
Neither the county nor the authority advocated for the project, said Sam Bozzolla, a county project manager who works with the redevelopment authority.
A July letter from Corbett’s budget office to Dennis Davin, director of economic development for Allegheny County, stated the office had received the county’s application on behalf of Dolan and Island Studios.
Bozzolla said the county never submitted an application.
Members of the Pittsburgh Film Office’s Board of Trustees did not know about Dolan’s debts and unpaid taxes, said Russ Streiner, board chair. Dolan is a board member.
The film office, which markets Pittsburgh as a filming location, did not have anything to do with Dolan’s grant, Streiner said. He hopes Dolan can resolve the issues.
Rep. Paul Costa, D-Wilkins, also a board member, said Dolan’s connections to the film industry help bring movies to Pittsburgh: “I can’t address his financial issues, but I think him being on the film office board is an asset because he is in the movie business.”
The state awarded Dolan a $250,000 grant in 2008 and reimbursed him $200,000. In 2013, the state awarded him a $10 million grant for the McKees Rocks studio expansion but did not pay him any money, state records show. The governor’s budget office would not release details on the awards.
In 2011, the state reviewed Dolan’s 2007 personal income tax returns and determined that he owed $184,953 more than the $286,089 he paid on earnings from Voyager Jet Center, an Allegheny County Airport-based company that provides private jet charter services. Dolan sued the state in 2012, seeking a reversal of the decision. The case has not been resolved.
Allegheny County hoped to resolve past-due loan payments from Dolan when it accepted the $2.5 million state grant on his behalf and restructured his payment plans.
Dolan received a $250,000 Economic Development Fund Loan in 2007 for post-production costs associated with the studio’s first film, “The Bridge to Nowhere,” county economic development and redevelopment authority records show. State funds repaid $100,000. Dolan failed to pay the rest.
The county and Dolan agreed to a new payment plan this year, but Dolan is four months and $60,000 behind, records show. He still owes $135,000 on the loan.
The county extended Dolan a $110,000 small business loan in 2008 for furniture and equipment for the McKees Rocks studio. Dolan defaulted on the loan in 2010, according to county records. The county and Dolan reached an agreement this year. He is current on his payments and owes $16,000.
Dolan owes more than $32,000 in back taxes on two properties on West Carson Street in Esplen, court records show. He owes more than $5,500 in taxes on properties in McKees Rocks.
Aaron Aupperlee is a staff writer for Trib Total Media. He can be reached at 412-320-7986 or [email protected].