Okay, bankrupt Detroit paying for a hockey arena is nuts, but what can we do about it?

Hey, it must be “Let’s all boggle at bankrupt Detroit building an arena for the Red Wings” week: Yesterday’s Lansing State Journal article is followed up by an in-depth piece today at NextCity (you can read the whole thing for $1.99, or read an excerpt at Deadspin) on how “the Ilitch family—with its estimated $3.2 billion net worth—will get a new stadium, slated to open for the 2016-2017 season, built off the backs of taxpayers.” In a city, mind you, where police and firefighters may have their pensions cut to 16 cents on the dollar*.

All of this should be old news to readers of this site, though NextCity’s Bill Bradley does provide a nice precis. The more interesting bit (aside from the several quotes from yours truly, which is mostly going to be interesting if you’re related to me) comes in the section omitted from the Deadspin excerpt, where Bradley asks sports subsidy critics like former U.S. Rep. Dennis Kucinich (who held hearings on stadium subsidies back in 2007) and Seattle city councilmember Nick Licata (who testified at those hearings, as did I, and who was instrumental in passing Seattle’s Initiative 91 that requires that the city get a positive return on any sports venue investment) what the heck they think can be done about it. Kucinich first:

“Any time you’re talking about massive investment of public resources, it ought to be treated in the same way that a venture capitalist would treat it,” Kucinich said. “There’s no business in the world — no bank, no venture capital fund — that would give money to an entity without asking for anything in return. Negotiate a position in the same way that a venture capitalist would. You become a partner, not simply someone who is playing Santa Claus with taxpayer money.”

That’s certainly what Licata and the I-91 forces did, even if the math for “return on investment” turned out to be trickier than they had anticipated. And, it’s worth noting, even though the Sonics subsequently moved to Oklahoma City, Licata says he didn’t suffer any significant retribution at the ballot box from spurned basketball fans:

When he ran for reelection in 2009, the year after the Sonics had left for the heartland, his opponent, Jessie Israel, came out “aggressively” on the stadium issue. “[Israel] was younger than me, well connected, raised more money than I did and beat me up on that issue,” Licata said. “And I still won by a 14-point advantage. The folks who are strong advocates for professional sports teams are passionate and that passion translates into a lot of heat, but it doesn’t necessarily translate into a lot of votes.”

Still, the number of elected officials pushing a standard of “the public should get back something equal to what it puts in” remain few and far between, for reasons that I’ve covered elsewhere. (TL; DR version: Lobbyists!!!) And to change that is likely to require more organizing from both the local Licatas of the world and the Congressional Kuciniches — okay, you know what, hell with, I’m just going to quote myself:

Ending the scam that is stadium welfare very well may have to start with local leaders — like Licata in Seattle and [Frank] Rashid in Detroit — before there’s a better chance of real change in Washington.

“I think it has to be both at once,” deMause said. “Congress isn’t going to act until there’s a major public groundswell, which needs to happen locally because organizing takes place around this stuff on a local level. At the same time, local officials are always going to be at the mercy of teams threatening to move — even if only to the county across town with the elected officials dumb enough to fall for their scam — until there’s some federal restriction on companies playing off localities against each other.”

Things aren’t exactly going great on either of those fronts, but hey, there’s a first time for everything. Drops of water turn a mill.

*UPDATE: Or 94 cents on the dollar, or somewhere in between. See comments.


19 comments on “Okay, bankrupt Detroit paying for a hockey arena is nuts, but what can we do about it?

  1. ” In a city, mind you, where police and firefighters may have their pensions cut to 16 cents on the dollar.”

    Misleading – latest cuts on police and firefights are 6 cents on the dollar, not cut to 16 cents.

    http://www.freep.com/article/20140302/NEWS01/303020059/Kevyn-Orr-pension-systems

    Your larger point stands, obviously.

  2. Yeah, I was citing Bradley, didn’t check the latest Orr pension proposal myself. Though it’s worth noting that a 6% cut probably isn’t right either, since eliminating cost-of-living-adjustments effectively tacks on additional cuts.

  3. Licata’s comment about “passion not turning into votes” is a key one in my view.

    In any “save our (insert team name here)” effort, there is pretty much always a staggering amount of passion evident. Obviously, people opposed to paying a team to stay aren’t generally as passionate as those that are in favour of same (you can get that on nearly every issue put before any kind of government… the relatively small minority who feel strongly about a certain issue almost always shout over the majority who don’t agree but don’t vehemently not agree… politicians like to consider passion in one’s voice as evidence of the message’s general popularity).

    The people that are screaming the loudest are often the ones who either stand to gain from the proposal on the table, or the ones who stand to lose something (IE: their sports tickets being subsidized by non-fans and non-attendees) if it doesn’t pass…

    These are issues that absolutely scream for a plebiscite… luring a sports team to your community (or paying one not to leave, even if it doesn’t seem to have a better alternative anywhere else…) is by definition a want and not a need. Politicians need to understand they are elected to manage the things that are actual needs first. Wants are very much a secondary concern.

  4. Thanks for reading! Glad everyone liked it.

    That number is from some original reporting I did with retired and injured firefighters in December. That was the rumor among retirees, so I think it’s fair to say, “some have speculated,” as it does in the piece.

    I can confirm that speculation not only from the multiple firefighters I spoke with, but also my grandmother. My grandpa is retired DFD, so I hear pension chatter from the meetings and public debates.

    Now, is that in Orr’s plan of adjustment? No. But it’s still fair to say “speculate.”

    http://nextcity.org/equityfactor/entry/the-face-of-pension-reform-detroit-firefighters-lament-cuts

  5. Detroit fans aren’t the brightest. They refuse to admit the Ford’s are the problem with the team. They’ll bend over for any corporate thief.

    Watch and see, the Pistons will soon conspire to move down to Detroit soon and play this game all over again. Of course they will need their own arena too.

  6. This…

    “Politicians need to understand they are elected to manage the things that are actual needs first. Wants are very much a secondary concern.”

    …is a much better standard than this…

    “…a standard of ‘the public should get back something equal to what it puts in’…”

    …because of the corrupting influence on the free market of having government subsidize one business over another. It’s incredibly unfair to play favorites in the competition for discretionary income, regardless of whether there’s a payoff for taxpayers. And purely wasteful when a project would be built regardless.

  7. Hate to defend Detroit here but the Joe is in an isolated area. If the goal to to try to recreate SoDo in Denver or LA Live in Los Angeles, then a new arena is a must. And if the Wings build an arena on their own it would likely result in the debt service cutting into player salaries (a la Arsenal). So if the Wings can’t do it but it might help the city, then why not subsidize it? I’m sure Detroit doesn’t want their only decent nightlife to be in a casino forever.

  8. If debt service on an arena would be so high that it would force a team to cut payroll, remind me again why a new arena is a good idea?

  9. John Bladen: I was actually in Seattle visiting relatives when the city elections were under way. Every voting age member of my fam up there put a ballot in, and it was brought up at every family dinner we had while I was there. The arena talks never came up at all.

    I later found out that one of the anti-arena members of the city council was voted out by a close margin, but I highly suspect his stance on the Sonics was a huge factor in it. If anything, his replacement seems even more unlikely to support an arena project, given her views.

  10. There are very, very few instances where a single issue is instrumental in an election, in either direction. Though the handful of local officials who have gotten the boot thanks to supporting stadium subsidies is still greater than the zero who have been forcibly retired thanks to rejecting them.

  11. Ben: Since Ilitch’s wife owns all or some of at least three casinos in the Detroit area, I’m not sure that Detroit really gives a **** which Illitch business it’s tax dollars subsidize in the way of entertainment. It might, on the other hand, care whether on not it does subsidize billionaires (more than it presently does).

    www.google.com/maps/@42.3365334,-83.0465139,14z

    I guess it depends on what your definition of isolated is, but the JLA is about 10 blocks from the centre of downtown and 7 or 8 from the Renaissance centre. In the map, it’s under the “M” at the end of W. Jefferson avenue near the waterfront at lower pic centre.

    Downtown Detroit is not now and has never been particularly vibrant, but I don’t believe it’s fair to call that location “isolated”. It’s worth mentioning that part of the raison d’etre for both the JLA and the RenCen were to “revitalize” downtown Detroit in the 1980s.

    Anyone know how that particular use of tax dollars work out?

  12. The isolated area comment kind of made me laugh, Auburn Hills or Pontiac are far from downtown, not the current arena.

    As for Denver, arguments can be made that the baseball park helped revitalize Lo-Do, but keep in Baseball has twice as many home games and takes place in the summer, when people mill about and go to restaurants. The Denver Hockey/Basketball arena has no influence on the area around it.

  13. Kei, if you’re talking about Kshama “The Selective Socialist” Sawant, I can almost guarantee she’ll never sign on for public subsidies of sports facilities in Seattle unless all the money goes to unions for building it. She’s already shown by siding with taxi companies against rideshare companies that she’s willing to play favorites, and those are the easiest politicians to buy off.

  14. @RogerC

    Actually, I wish that the Pistons would help out with this arena project. If they did, they wouldn’t be taking as much money from the public. 2 owners sharing an arena makes a lot more sense.

  15. Neil,

    The hope is that an arena spurs nearby development. The city spends $ on the arena (just as they’d spend it on building a road to/around a mall in the olden days) in the hopes that development around the arena (bars, restaurants, hotels, offices) will grow the overall local economy. Obviously that succeeds sometimes (SoDo Denver) and fails sometimes (P&L KC). But there’s reason behind it.

  16. As I’ve noted here before, virtually all of the development in LoDo came *before* Coors Field was built. There are a handful of venues that have spurred minor development, but I doubt any were $200 million worth. That’s a lot of roads to malls you could build.

  17. John Bladen: what you don’t see from the satellite image is the man-made isolation of the Joe. Yes, it’s within easy walking distance as the crow flies; however, it’s virtually impossible to walk from downtown to the arena. Your choices are along a two-lane road that’s more of a service road, a three-foot-wide sidewalk right on the curb of a six-lane highway, or to walk through Cobo Hall (the big convention center adjacent to the arena). It was not planned well; if you are due north of the arena, you can’t get there without walking four or five blocks in either direction, then down to the riverfront and back the other way.

    Your other assertion, that the Joe was part of the Renaissance of downtown, isn’t entirely correct. The Wings had already announced that they were moving to a new rink in Auburn Hills, across the street from the Pontiac SIlverdome, when the city threw up the Joe in a matter of months, and gave away the store to get them to stay in the city instead. The poor planning behind it is evident in the satellite image; you can clearly see the enclosed walkway that allows access to the arena from the parking garage and from the north side of the expressway. That eastern stretch is never used, and in fact, there’s only one way to even get to it, and it’s almost impossible to find.

  18. As I recall, Paul, the “Silverdome” arena idea was never a serious consideration. It was a “maybe we’ll do this if you don’t build us a new rink” negotiating tactic.

    There are legitimate access issues with the JLA. However, there has never been any reasonable effort to address these by either the Red Wings or the city. Doing so is/was likely to be a great deal cheaper than building a $650m arena complex (which, unless it addresses it’s own access issues, may well end up with a similar problem). Are you really suggesting that the main reason the arena should be abandoned is that pedestrian access is difficult?

    Secondly, part of the reason access to foot traffic is so limited is that the city/Wings wanted to force people to use the parking garage… this works in some cities, but it seems not to have done in Detroit (or at least, not to the degree the Wings/city wanted.) Downtown fans could take cabs if the walk is deemed too much for them. Or drive to the parkade.

    I think the “real” issues with the JLA are that it was built just before the economic model of pro sports changed from quantity to quality… it was designed to seat the maximum number of paying fans, not corporate bigwigs in tax deductible seats. It is not the only arena with that problem, obviously.

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