DEFAULT IS NOT IN OUR STARS, BUT IN OURSELVES: Part 25— FINALE: In Late 2023, Mike Bacigalupo (Illegally) Wrested Control Of $900,000 Federally-Funded Wenonah Park Grant Awarded To Bay City…Accelerating The State Theatre’s Slide Into March 2024 Chapter 7 Bankruptcy Filing
This exclusive report, the conclusion of my “Default Is Not In Our Stars” series, reveals what happened — out of public view — between the June 2023 $900,000 MEDC Bay City grant announcement and the State Theatre’s Chapter 7 bankruptcy filing.
(Here’s a hint: the City of Bay City lost the $900,000 grant because Mike Bacigalupo got it under contract first — for the “State Theatre of Bay City/Bay County”. By the time Bay City’s Economic Development department woke up and found the grant had been swiped…it was too late.)
In a nine-page June 23, 2023 press release, Bay Future, Inc. maintained the State Theatre, Bay City’s Downtown Development Authority, Bay Future and the City of Bay City “collaborated” to secure the state funding. (Not really — the grant was authored and submitted by Sara Dimitroff of Bay City’s Economic Development department, along with letters of support from area businesses and nonprofit organizations.)
By early November 2023, Mike Bacigalupo, the longtime chief operating officer of Bay City’s State Theatre, had been “let go” by the City of Bay City as its “Special Events Coordinator”.
Days later, Bacigalupo was gone from the State Theater — and a new “key security system” was installed.
On January 30, 2023, an MEDC spokesperson confirmed to me in an email that Bay City’s $900,000 grant “could not move forward as planned.”
Here it is, my exclusive report.
The conclusion of the “Default Is Not In Our Stars” series, reveals what happened — out of public view — between the June 2023 grant announcement and the State Theatre’s March 1 Chapter 7 bankruptcy filing.
PART 1-“THE CITY WAS THE APPLICANT FOR THE GRANT. WHY WAS THE GRANT GIVEN TO THE STATE THEATER?”
Ah, fraud!
The world’s (second) oldest profession.
In the weeks before flying off with his wife to Italy for a two-week vacation that would have made Stanley Tucci blush, public records reveal Mike Bacigalupo had already “hijacked” the $900,000 grant awarded to the City of Bay City — officially inking his signature on a September 8, 2023 “Revitalization And Placemaking Program Grant Agreement” contract.
The contract, issued to the “State Theatre of Bay City/Bay County” instead of the “City of Bay City” was co-signed by Valerie Hoag, the Michigan Strategic Fund’s Fund Manager.
And Bacigalupo began spending the grant money — awarding nearly $300,000 in contracts to Bay County companies.
By the middle of October 2023, two vendors awarded work by Bacigalupo under the grant had submitted invoices for completed projects: Bay Landscaping and Clements Electric.
(NOTE: Neither company was paid, and both were later noted as “Nonpriority, Unsecured” creditors in a State Theatre bankruptcy filing. Elevator, elevator…somebody got the shaft!)
The act of misappropriating the grant (supported by federal funds), could result in federal criminal charges.
The most common types of criminal misappropriation that can result in federal charges are as follows: misappropriation of funds, trade secret misappropriation and misappropriation of assets.
However, the most frequently prosecuted “misappropriation” crime is the misappropriation of assets.
In order to get a conviction for misappropriation of funds in federal court, the government must prove the following elements of the crime beyond a reasonable doubt:
- You had access to the funds, but not ownership of them;
- You knowingly and intentionally took the money or intended to take the money; and
- You used the money for your own purposes or intended to use the money for your own purposes, which can include transferring the money to another bank account.
PART 2: “ONCE IT WAS DETERMINED THAT THIS PROJECT WOULD BE SUPPORTED, I WAS PUT IN TOUCH WITH MIKE.”
A trove of emails and documents (including the contract Bacigalupo signed), obtained over the last three months by multiple public record requests, supported a comprehensive timeline while allowing me to excerpt select communications.
With the exception of one altered image shown below, I will not be publishing screenshots of any documents — only quoting from the records. I have the documents and, if I’m subpoenaed by a federal judge, I will consider providing them.
Let’s begin the end.
In mid-October 2023, an employee of Bay City’s Economic Development Department (not Sara Dimitroff, the employee who wrote the proposal) sought the official grant agreement, purportedly issued to and signed by City of Bay City.
Several days later, an MEDC representative responded, attaching a copy of the executed grant agreement — dated September 8, 2023, and signed (not by a City of Bay City official) by Michael Bacigalupo on behalf of the replacement grant recipient: the State Theatre.
In an excerpt from an email response, the Bay City Economic Development official (not Sara Dimitroff) expressed shock and alarm to the MEDC rep:
“I have some confusion. The City was the applicant for the grant. Why was the grant given to the State Theater? [SIC] Our application indicated that the City would oversee all construction with assistance from the State Theater [SIC], but the City expected to be the direct recipient of the grant. I am confused how this ended up with a grant agreement with the State Theater [SIC] instead of the City, especially since this is occurring in a City owned park.”
Responding within minutes, the MEDC rep stated:
“Once it was determined that this project would be supported, I was put in touch with Mike. Once we discussed the project further, I was told the recipient would be the State Theatre.”
There was no statement from the MEDC that revealed who put the MEDC rep “in touch with Mike”.
Tick-tock, tick-tock, tick-tock, tick-tock: Bay City’s “golden boy” didn’t know it, but he was running out of time.
And beginning to tarnish.
PART 3: “WAS IT MIKE THAT TOLD YOU TO TRANSFER IT TO THE STATE THEATER, AND IF SO WAS IT BY EMAIL OR BY PHONE?”
“Once it was determined that this project would be supported, I was put in touch with Mike. Once we discussed the project further, I was told the recipient would be the State Theater [SIC]. If we do need to add the City as an applicant, we can do that through an amendment, with no issues. I suggest we have a call with Mike to discuss the discrepancy and make a plan to move forward.”
The ongoing dialogue between Bay City’s Economic Development department and the MEDC continued, with a Bay City staffer (not Sara Dimitroff) pushing back in the days following the preceding message:
“I have a couple follow up questions. Was it Mike that told you to transfer it (the RAP grant) to the State Theater [SIC] and if so, was it by email or phone? If it was by email, can you send that to me? Mike did not have authorization to do that and the City Manager is wanting an explanation as to how that happened and any documentation associated with it.”
Within a week of that email exchange, Mike Bacigalupo had been fired by the City of Bay City, and later removed from his position at the State Theatre.
Although other departures followed (for example, as Director of Bay City’s Downtown Development Authority), at this writing Bacigalupo remains Director of the Historial Museum of Bay County.
PART 4: STATE THEATRE CHAPTER 7 BANKRUPTCY
In one of the worst examples of “nepo baby” casting since Jonah Hill’s sister appeared as Monica Lewinsky in FX’s “Impeachment: American Crime Story”, Rowley scion Dan Dimitroff joined the State Theater Board of Directors in early November 2023 as its chairman.
Although infamous for his “keep my family’s name out of your mouth” public stance during this sordid debacle, on March 1, 2024, Dimitroff announced (“with a heavy heart”) the State Theatre’s Chapter 7 bankruptcy filing, and liquidation of “the organization’s assets to pay its debts.”
And, it appears, a couple of Mike’s “grant hijack” debts.
It’s a sticky subject, but the bankruptcy discharge of debts from two vendors contracted by Mike Bacigalupo while he was (illegally) in control of a federal grant while also running the State Theatre might someday be taught at NYU’s Law School. (Paging Andrew Weissmann!)
And there’s a “financial account” missing from the State Theatre’s bankruptcy disclosures.
Here’s a hint, Dan: the last four digits are not listed below. You might want to ask Mike.
FINALE
It hasn’t been easy pulling all this information together, which is why this is my final report on the malaise settling over the State Theatre.
Sure, I can pay a few dollars for certain records — but I couldn’t afford the MEDC’s last document quote: an estimated $1999.20.
Damn, somebody’s got a sharp pencil.
So when you’re looking for more reporting on the “fall of the State Theatre”, you’ll have to ask the scribe at MLive…and the copycat at WJRT-TV.
Peace out, people!
