Up North UAW resort bleeds millions, plans controversial lavish cabin

At its remote, 1,000-acre resort in northern Lower Michigan, the UAW is building an opulent cottage for former President Dennis Williams.

But the Black Lake Conference Center near Onaway, subsidized by interest from the union's strike fund, is not a moneymaker for the UAW. Black Lake has bled tens of millions of dollars over the years, and according to tax filings, owes the UAW more than $61 million.

Black Lake, where Lucille Ball and Desi Arnaz once honeymooned, has a kind of spiritual significance for many in the union with its connections to the iconic labor leader Walter Reuther, who wanted to create an educational retreat for workers there.

Now, amid a federal criminal investigation over misuse of millions of dollars from the UAW-Chrysler National Training Center, the union's practice of providing cottages for former presidents to use faces scrutiny and criticism, thanks primarily to the amenities and optics of the 1,885-square-foot house designated for use by Williams, who retired last year.

The designs for Williams' three-bedroom cottage — designated as Cabin No. 4 at the UAW Walter and May Reuther Family Education Center, or as the Williams Cottage on blueprints filed in Cheboygan County — include hidden storage off the master bedroom, quartz bathroom counters, cherry and maple kitchen cabinets, chrome sinks and even a wine cooler.

“It is so exorbitantly unique," said Dick Danjin, a retired General Motors worker and UAW International representative. "In a full-sun eclipse, it would be shining.”

Frank Hammer, a retired autoworker, former local union official and activist, said the construction of the new cottage marks a clear departure between past and present practices.

“The fact that (former presidents) were able to use a cabin for their purposes when they traveled up to Black Lake seemed quite reasonable as an expression of gratitude for the president’s service to the union. I don’t think there was a soul in the UAW who had a problem with it. What’s been done here was not in the same category at all,” Hammer said.

The UAW's position is that the new cottage will not belong to Williams.

"Importantly, the new cabin is, and always will, be the property of the UAW, and is not owned by Dennis Williams. It is a permanent asset of the UAW’s Black Lake Education Center," according to a statement provided by UAW spokesman Brian Rothenberg.

A history of cottages

When the UAW turned over the reins of the union to new President Ron Gettelfinger in 2002, members honored the outgoing leader with more than their thanks.

Stephen Yokich had just been given a new title, president emeritus, and soon, was expected to enjoy a perk of retired life after leading the union since 1995. 

Yokich, a leader who oversaw a major strike against General Motors and was credited with landing lucrative contracts for autoworkers, was to get his own cottage built and furnished at Black Lake.

“In tribute to his tireless efforts to invest in and expand the educational and recreational opportunities available to UAW leaders at the great facility, the cottage shall be available for his use whenever he visits the center, for the use of others when he isn’t visiting the center, and for the display of special memorabilia of his choosing,” according to the resolution included in a book on the proceedings from the union’s convention in Las Vegas.

When the resolution passed, then-Vice President Cal Rapson delivered the news:
“The cabin’s yours, Steve.”

Yokich’s death from a stroke two months later derailed those plans, but other retired presidents have also been granted the use of a cottage on the grounds of Black Lake.

But Black Lake, with the center and golf course open to the public, has struggled as a destination.

The center, supported by interest from the UAW's $760-million dues-supported strike fund, reported a $2.8-million loss for 2017, according to federal records.

And that trend of financial losses goes back many years. 

The Free Press reported in 2008 that Black Lake had lost $23 million over a five-year period.

Reuters reported in 2011 that the union had provided $39 million in loans to Black Lake, and in 2017, paperwork for Black Lake filed with the Department of Labor listed long-term liabilities of more than $61 million payable to the UAW, which now has about 431,000 members.

The Detroit News reported last year that the UAW had sought to save money by using nonunion labor along with union workers to build the Williams Cottage, prompting an outpouring of anger. That revelation led the Wall Street Journal to muse in an opinion piece that “the union didn’t want to pay more for union labor if it meant sacrificing the wine cooler."

The UAW said that it first tries to secure union workers for any work on the property, but that a location in a remote area can make that a challenge.

“The UAW always hires union members and contracts with union contractors when available. The UAW is using members of the United Steelworkers, who work full-time at Black Lake, as the general contractor and builders of the new cabin, along with their work on other projects at Black Lake," according to the UAW.

The price is unclear

Rothenberg could not provide the exact cost of the new cottage, although The News noted that union bids for approximately $851,000 and $1.34 million had been rejected as too high. In 2017, the cost of improvements at Black Lake, not counting $149,265 spent at the union's nearby golf course, was $1.8 million, according to federal tax filings, which may not account for all improvements on the site during the year. Additional line items for the entity that operates the center also list improvement expenses. Figures for 2018 are expected to be filed in March.

The decision to build the new cottage for Williams, however, is not the only issue that stands out.

Planning for the cottage was underway before a resolution about it was passed at last year’s UAW convention in June. The plans filed in Cheboygan County list a date of September 2017.

In the convention language, the resolution touts Williams’ many years of service.

“Dennis has inspired us all by his vision and leadership and enriched us through his genuine nature and friendship. Throughout his illustrious career, the interests and well-being of our members have always come first,” according to the resolution, which authorizes “the availability of a cabin … at Black Lake for his use — at no personal cost — whenever he is staying at the facility.”

Williams could not be reached for comment.

Despite the controversy surrounding the Williams cottage, experts say allowing retired union leaders to stay at Black Lake is understandable, given that their compensation is likely many times less than the corporate executives they face off against during their careers.

Art Wheaton, director of Western New York Labor and Environmental Programs for the Worker Institute at Cornell University, said it’s not surprising that the UAW would want to have a place for retired leaders to go after their term is over. For one thing, those former leaders can pass on what they know to a new generation, he noted.

“I think it’s a relatively reasonable perk for a lifetime of service to the union,” said Wheaton, who in years past was brought to Black Lake to teach about the auto industry.

Wheaton recalled seeing retired UAW President Doug Fraser at Black Lake before his death in 2008.

A union ideal

Black Lake is considered a “living tribute to the lives of Walter and May Reuther,” who were killed in a plane crash en route to the center in 1970.

“Reuther wanted a school for future leaders of the union where members could come for two-week sessions and bring their families with them for educational programs and recreation,” according to a 1972 AIA Journal article from the Walter P. Reuther Library of Labor and Urban Affairs at Wayne State University.

Exact figures were not available, but it's estimated that tens of thousands of union workers have visited the center over the decades.

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Major figures in the union's past have also had a role in shaping Black Lake. A bar there is known as Mazey's, after Emil Mazey, a prominent labor activist who served as a UAW secretary-treasurer. As the story goes, Mazey was able to get a bar on the grounds because he won a poker game over Reuther, who was a teetotaler.

Black Lake, however, has struggled as a destination.

Wheaton, of Cornell, said remoteness — the resort is more than a four-hour drive north of Detroit — is part of the allure for Black Lake but also its great impediment as an attraction, especially for the golf course. The Free Press has noted that the course, which opened in 2000 and is touted by the UAW as a Golf Digest Top 100 course, cost $6 million.

Union officials have considered selling the property in the past, but Wheaton said it's unclear the union could come close to recouping what has been spent there or what the center and golf course are worth. The UAW puts a $31-million value on the Educational Center, and $5.4 million on the golf course after a depreciation listing of $2.3 million.

“It’s just not set up to be a high-traffic, high-volume golf course, and they’ve been unable to attract people,” Wheaton said. “If you want to get away from it all and have no one find you, that’s where you go.”

Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence