Detroit’s “financial emergency” unlikely to derail Red Wings subsidies

In case you missed it, Michigan Gov. Rick Snyder declared Detroit to be in a state of “financial emergency” on Friday, and sounds like he’s all but determined to appoint an emergency manager to oversee the city’s finances, as Michigan really really likes to do.

“Citizens are not getting the services they deserve and need,” Snyder said during a midday Friday public forum. “Public safety, lighting, transportation — all those areas need help and it’s time to call all hands on deck and say let’s all work together.”

So what does this mean for the Detroit Red Wings arena subsidy plan that’s in the works? In all likelihood, not much: The state is already looking at being heavily involved in the arena, so the governor probably isn’t going to stop Detroit from giving tax breaks to a project that he himself favors, even if they’re tax breaks that could otherwise be used to shore up city services. Besides which, Michigan’s emergency managers have so far been more interested in outsourcing public services and breaking union contracts than in reforming developer subsidies.

It could make things awfully interesting, though, as suddenly you’d have a major development subsidy deal being proposed at a time when the city council wouldn’t even be able to vote to have a say in the matter. That could look not so hot, since you’d potentially have an unelected administrator committing millions of dollars in future Detroit property taxes at a time when he’s telling the city’s elected officials that they can’t be trusted with taxpayer money. I don’t think irony can be grounds for a lawsuit, but if nothing else, it could give this a run for its money as Most Ironic Sports-Related Thing Ever.


5 comments on “Detroit’s “financial emergency” unlikely to derail Red Wings subsidies

  1. What really, truly shocks me here is that the new baseball stadium didn’t pull Detroit out of its slump. Isn’t that what sports venues are designed to do? To pull in hundreds of millions of dollars per year, thus providing thousands of jobs, especially with that multiplier effect.

    Substitution, schmubstitution. There’s no such thing.

    Seriously, I don’t think any city would be more prone to leakage (schmeakage) than Detroit is. Although, I bet Sacramento is pretty close.

  2. Not sure why it’s in the state’s interest to be behind this. I could see Detroit to keep the Wings from moving to the suburbs (either a new arena or the Palace of Auburn Hills), but they’re not going to turn down that media market and traditional hockey support to move out of state. As a result, they have no leverage to move anywhere else. So it’s not that new taxes are going to be generated by a new arena, as they’ll be the same taxes that were generated by the old one. So why give them any tax breaks, when the status quo has the city (or whoever) collecting that tax money?

  3. “As a result, they have no leverage to move anywhere else.”

    Ah, the leverage-free giveaway, one of the eternal mysteries around here. I guess it’s hard to sue elected officials, but these deals are such obvious violations of “fiduciary responsibility” that they seem ripe for legal action.

  4. Nice points, Brian. You’re right too, MikeM. Maybe we should go to the European model. When their downtown areas are failing, they build walking paths, plant flowers, import rock and create parks on the riverfront. We build skyscrapers and stadiums/arenas. After what happened with Cincinnati, no city in their right mind should continue this path, but they can’t get enough of it. The Virginia Beach thing a couple of months ago was icing for me. The city is on the verge of losing a good deal of its industry, but never worry an NBA team will cure everything. All America is good at anymore is building military pieces and winning basketball games.

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