Red Wings owner has no immediate plans to build most of arena district, no he’s not giving his $300m back

You know how every time some team owner announces that their new publicly financed venue will come with a “ballpark village” or “arena district,” and I shake my head sadly and warn that accompanying development rarely if ever happens on the expected timetable? Well, this just in from the Detroit Red Wings front:

Nearly a year after Olympia Development announced that a big chunk of $200 million in retail, offices and apartments could be open when the Red Wings’ hockey arena debuts in summer 2017, plans, details and timelines of many of those components remain unknown.

“I don’t even see the majority of that 45-block overhaul starting before the arena is open,” said John Mogk, a Wayne State University law professor who closely follows Detroit development.

“You need to prove a strong market for new residential and commercial, and what is in that area now doesn’t make much of a case,” Mogk said.

So, Red Wings owner Mike Ilitch can’t build the new housing and stores until there’s a market demand for it, and there’s no market demand for it yet. I could be churlish and point out that the whole point of the state giving public money for the arena was that the market wasn’t creating enough demand to get anything built on that site, and so the arena was supposed to jump-start things, and if it’s just a matter of waiting for demand for more housing to materialize then Detroit could have done that without having to give Ilitch $300 million, and — you know what, it’s Monday, I have a right to be churlish. Or at least to point out that when developers make promises about all the stuff they’re going to build, you really want to get it in writing.

(Ilitch can reportedly get another $74 million from the city development authority if he spends the $200 million within five years; whether you consider that a valuable incentive or throwing good money after bad is your call.)

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9 comments on “Red Wings owner has no immediate plans to build most of arena district, no he’s not giving his $300m back

  1. and there’s no market demand for it yet

    Key word, YET. There will be plenty of demand once everything comes into place. The Midtown neighborhood (where the arena is being built) is flourishing and there’s a light rail line currently under construction. This is a slam dunk project and the only way it doesn’t come to fruition is if the economy goes in the tank. Ilitch has a lot of money invested in this area not to follow through with the ancillary development.

  2. But if Midtown is flourishing, why do you have to spend $300m on an arena to make the housing and commercial development happen? It’s not like an arena is such a great catalyst that it creates demand out of thin air.

  3. They didn’t need to do it, but were stuck in no man’s land because the teams lease ran out at Joe Louis Arena and the city was in bankruptcy under emergency management. If the land (where the arena is being built) was up for sale, developers would have scooped it up in a second. It’s in a prime location right on the edge of downtown and within walking distance to Comerica Park, Ford Field, Fox Theatre, The Fillmore etc.

  4. But if you are looking for development, and not just a hockey team playing for a public buck, having land bought up and built on by actual developers is “good,” right???

    Why couldn’t a hockey arena go in a less-than-prime location and save the prime locations for paying customers?

  5. This is literally across the street. Be curious how he thinks it’s not indicative of demand.

  6. And that’s not really what the story says, unless you take the word of the Wayne State Prof that I just displayed was being intentionally misleading. It’s mostly about how lots of the plan doesn’t even have governmental approval yet, which, you know, is kind of an issue.

  7. @umleaf
    People need to realize that you have to go through a process in order to build everything else. The rezoning approval last month was just for the arena and residential buildings attached to it. The historic commission has to approve the development for Hotel Eddystone (September has been the rumored start date for redevelopment). Plans for the Little Caesars HQ and apartments next to Comerica Park are in the process of being assembled and need approval from city council. There will also be a hotel in front of the arena, but that will come within the next five years. Not everything was promised to be done in two years and no one in their right mind would finish the secondary buildings before the primary one is complete.

  8. Many years ago a city wanted an Art Museum and hired an designer to plan it. Main building with 2 large wings. When started builder built wings first. So if city changed mind on how much to spend or it had over runs they could not scale back plans or if they did city would have 2 Art Museums instead.

    So tell me why is Detroit so broke?

  9. Here’s all you need to remember.

    When Ilitch built Comerica Park, part of the deal was, as it is here, the idea of making it more of an entertainment district. As part of that, they installed a significant amount of retail space that was accessible from outside the ballpark.

    Absolutely nothing has been successful in those spaces.

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