There's More To The American Legion Hall Rezoning Story Than Public Being Told
A controversy brewing in Saugatuck over attempts by local military veterans trying to have their American Legion Hall at 248 Mason St., rezoned from residential to commercial is not an anti-veteran effort by city officials, as some would like the public to believe.
Rather, it is an attempt to prevent future illegal booze sales, illegal gambling, illegal pocketing of supposedly nonprofit fundraising proceeds and having state and federal law enforcement raids mar the reputation of one the premiere resort towns in Michigan like occurred last year in Holland at a private social club.
Saugatuck city officials - including City Manager Kirk Harrier - have repeatedly voiced their support for all local veterans.
What many are not supportive of is allowing the rezoning effort which would ultimately allow a small contingent of the American Legion Hall members to have almost unfettered and unchecked activities on the premises which could illegally enrich certain members.
The problem began last year when it was discovered the American Legion Hall, although located in an area primarily zoned commercial, was actually zoned residential.
The local veterans’ group has for years held events and rented the space to help pay its bills.
When Post Commander Rob Boyce and member Don Karaus learned of the zoning issue, they immediately began the process to change the hall’s zoning.
City officials have balked at the move saying it is unnecessary, highly complicated and raises several concerns, including the potential for illegal activity by certain Legion members.
Boyce’s reputation - and the reputation of most of the local American Legion members - has never been in question.
But at the center of this ongoing controversy is Karaus.
While one of the most vocal members to cry anti-veteranism regarding the city’s failure to rezone the hall property, Karaus’ past questionable activities are really one of the main catalysts prompting the concern.
It was Karaus at the center of another controversy a couple years ago when he headed the running of Saugatuck’s Venetian Festival and beer tent, held obstensively to raise money for nonprofit community groups and activities.
Both years he was in charge, Karaus claimed little or no money was made from the events and no money was ever paid to any local nonprofit groups from the proceeds.
An investigation by The Local Observer found Karaus had lied about having obtained IRS approval for the organization; his banking records were incomplete or not provided; thousands of dollars had gone missing; and there was little, if any oversight by state or local officials over the supposedly nonprofit fundraising event.
Saugatuck officials, as a result of the controversy, awarded the nonprofit Cowhill Yacht Club the city permit to handle the Venetian Festival/beer tent activities and in its first year - with complete and transparent documentation - raised more than $30,000.
In another recent controversy involving Karaus, the Michigan Liquor Control Commission (MLCC), along with other state and federal law enforcement agencies, raided the private Pioneer Club of Holland in July 2015 and found several illegal activities being run by Karaus and others which included, according to MLCC records: selling illegal adulterated and watered down liquor; selling alcohol not purchased from an authorized vendor; allowed unlawful gambling devices on the premises; held illegal “nonprofit” gambling events; held illegal raffles; etc.
Authorities said they believe tens of thousands of dollars were raised for these supposed “nonprofit” events, but the money could not be accounted for.
As a result, the club was initially shut down and was recently fined and the illegal gambling devices and sheets were confiscated and destroyed.
State authorities say they have not ruled out possible criminal charges against Karaus and others pending further investigation.
State sources say they believe the real reason Karaus wants the rezoning is that the Michigan Attorney General’s Office does not allow many “nonprofit fundraisers” held in residentially zoned areas.
Karaus could not be reached for comment.
Harrier said even if the American Legion Hall remains zoned residential, the veterans could still hold some legal fundraising events if they petitioned the city for a special-use permit for each event.
City officials could then set varying restrictions - including stricter accountability requirements - on the events. “That appears the best way to handle this,” said Harrier.