Detroit development official confirms Red Wings subsidies a go, despite city bankruptcy

What’d I tell you?

Spokesmen for the Red Wings and Tigers both declined comment, not wanting to speculate in the immediate aftermath of the largest bankruptcy protection request in U.S. history.

But that $650 million arena planned for the Red Wings? That can still become a reality, according to Brian Holdwick, an executive vice president for the Detroit Economic Growth Corp.

Plans for an 18,000-seat arena were announced by the team’s owners and local economic development officials last month, although the new proposal still needed to be approved by the City Council and a handful of state and local agencies. The Red Wings said there will be $367 million in private investment and $283 million in public funds in the complex, which would also include residential, retail and office space.

Spending that kind of money on an arena — in a city where bankruptcy could mean laying off employees and scaling back basic services — could draw some public resistance. Holdwick said funding for the project would come from tax increment dollars that can’t be used by the city’s general fund anyway, so it’s not necessarily a zero-sum game between building an arena and easing Detroit’s financial pain.

Holdwick says money for the arena would go back to the state if not used for development downtown.

“I think there’s a lot of reasons why the city should be supportive,” Holdwick said. “I can’t, obviously, predict what they’ll vote.”

That Associated Press story doesn’t spell it out, but the DEGC, for which Holdwick is vice-president, is the parent organization to the Downtown Development Authority, which is the agency that’s proposing to provide the Red Wings arena with $283 million in property tax funds. So this is, in essence, the DDA saying, “Bankruptcy, schmankruptcy, we’re still gonna build an arena unless somebody tells us to stop.”

As for that “arena money would go back to the state” if not used for downtown development, that’s a tad disingenuous. First off, there are plenty of other expenses that could be justified as downtown development — replacing those streetlights that the city can’t afford to, say, or even rescuing artworks at Detroit’s downtown art museum. But more to the point, the property-tax fund that the DDA wants to tap for the Red Wings was set up by the same state that appointed the emergency manager who is forcing Detroit to declare bankruptcy; so if the state government is really concerned about the city’s fiscal future and wants to reclaim that $283 million for more important uses, it has the power to do so. Though then it would admittedly have to face accusations of nixing Detroit’s girders of momentum.


12 comments on “Detroit development official confirms Red Wings subsidies a go, despite city bankruptcy

  1. Don’t listen to the ‘haters’–people shouldn’t be shortsighted here. Pro-sports is a HUGE economic driver in all cities. They got to get this stuff built as ASAP so they can start reaping the benefits and get Detroit back on its feet.

  2. If they continue to go forward with this, the PR campaign will begin and end with “JOBS! JOBS JOBS!!!”
    They will promote the idea that they are bringing jobs (albeit temporary construction jobs, as well as low-paying service jobs post-construction) to an area in desperate need of economic investment.
    No mention of the fact that a sports stadium is only open maybe 1/4 of the year (I’m being generous), while as Neil mentioned, streetlights are needed EVERY NIGHT 365 nights a year…as well as other more pressing needs such as fire & police staffing, etc.

  3. santa clara jay, lol, no it isn’t. Detroit already has Comerica, Ford Field and the casinos. It’s still a dump.

  4. The only way this wouldn’t be a mammoth money loser for Detroit would be if the Pistons step in and help pay for it + move in. Unless that happens, this will only add to Detroits gigantic list of money problems.

  5. Jobs Jobs Jobs indeed.

    Of course, in addition to all the construction jobs being temporary, they will be filled by itinerant construction workers, given that few unemployed Detroit citizens will have the skills and experience to run modern construction machinery.

    The “permanent” (casual/temporary) jobs will be, you guessed it, ushers, concession workers, cleaners… yes sir, this here building might fix Detroit all by itself… assuming all you need is a few hundred minimum wage (or workfare – Michigan luuuuuuvs workfare programs) mcjobs to right the ship.

    How much of the $360M private investment is cash up front? Right, thoughts so….

  6. Detroit’s long spiral independent of the 1990′s signing of NAFTA by Billy Boy Clinton began with the election of Coleman A. Young who was the point-man in a corrupt political entity that was clearly involved with organized crime and this can be proved by observing history and just looking at the facts since 1974.
    Pro-black-anti-white-anti-business way of doing things in Detroit is now dead.
    The time has now arrived for the start and occupation of a new era in which business and progress are intertwined to that of the people and the non-contributors can either join the movement or find their way to the American gulag.

  7. For the 2,000 (20,000, 200,000?) good paying jobs ad they could recycle Ross’s Neanderthal.

  8. “Pro-black-anti-white-anti-business way of doing things in Detroit…”

    Well, you certainly can’t get any farther way from that than have the city subsidize a very healthy –hockey– team.

  9. @Ryan

    You’re right but Gores won’t do it. He could care less about Detroit. He’ll continue branding his team as a “Detroit” one even though he plays in a town that’s barely part of the metro area and couldn’t possibly be more culturally different than Detroit.

    He’ll continue playing in front of a half empty arena even though the Tigers, Wings and Lions have proved that you can be in the upper half of the attendance standings while playing in downtown Detroit.

    If there’s ever a case for not getting public money for a sports facility, it’s one in a bankrupt city that has 2 teams that could benefit from the building. Not to mention that the Palace would reap the benefits from all the sports events going on downtown since all the other events would have to reschedule and move to the Palace. He’d be making money from 2 facilities as opposed to just one.

  10. Has the city or Mike Ilitch said what is to happen to Joe Louis Arena when this new one is completed? Another vacant lot/ surface parking lot? Another Cobo Center expansion? Guess we know where the concession workers for the new arena will come from.

  11. Walter: The plan (supposedly) is to tear down the Joe and incorporate the waterfront property into the newly expanded waterfront park. To my knowledge, there is no money and no plan for this, but that’s the dialogue that has been thrown about. In the past few years the D has made a lot of waterfront improvements (and having been there recently, the new waterfront park is nicer than the parking lots that used to be there). This concept has been around for at least 10 years.

  12. Not to mention that the permanent jobs at issue (ushers and game-day staff) already exist at the Joe, and it’s not like the Red Wings are going to up and move to another metro area. The only option is the suburbs, and I haven’t seen a suburb step up on this one.

    So basically the Red Wings shouldn’t have any leverage, aren’t going to bring any new permanent jobs, and yet they’re being offered money anyway. Makes perfect sense.