Red Wings owner Mike Ilitch just wrote John Oliver’s show for next week

If you slept through the last week, this headline from Detroit Curbed probably has you utterly baffled:

Ilitch Responds to John Oliver’s Critique of Stadium Deal

Yes, that’s the owner of the Detroit Red Wings (and Detroit Tigers, and Little Caesar’s Pizza) issuing a press statement in response to an HBO comedian’s criticism of his deal to get $300 million in public subsidies for a new hockey arena. And what was Ilitch’s response?

“This project is about so much more than a world-class sports and entertainment arena; it’s about transforming a core part of our city for the benefit of the entire community,” the statement said. “The new Detroit arena and The District Detroit will create 8,300 construction and construction-related jobs, as well as at least 1,100 permanent jobs. To date, the Detroit Downtown Development Authority has approved nine contracts worth $121 million, of which Detroit-based and -headquartered businesses have won more than 88% — or $106 million. Initiatives of this size, scope and impact — $1.8 billion dollars for our city, region and state — are almost universally public-private partnerships. The majority of this development is being privately financed, and no City of Detroit general funds are involved whatsoever.”

That doesn’t actually counter any of Oliver’s criticisms, which amounted to pointing out that 1) Ilitch is getting $280 million in public funds, 2) Ilitch is worth an estimated $5.1 billion, 3) Detroit filed for bankruptcy the week before all this was approved, and 4) Little Caesar’s Crazy Bread sucks. In fact, the majority of the development is not privately financed (it’s 58% public, even by the Detroit Free Press’s conservative math), and while city general funds aren’t being used, development funds that would otherwise go to other city projects are, as is a gift of free city land.

In short: Watch John Oliver’s show next week, because he just got handed a whole lot of new material. Thanks, funnyman Mike Ilitch!

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13 comments on “Red Wings owner Mike Ilitch just wrote John Oliver’s show for next week

  1. Why this common rhetorical ploy works on some people is beyond me. No one seriously argues “Nothing good comes of publicly financing this stadium.” If people did, then the “But look at all this good stuff that comes from the stadium project” rebuttal would make sense: some good stuff will happen.

    The real argument against these boondoggles is obviously “Not enough good stuff will come of publicly financing this stadium.” Which is evident to anyone here, but even on fairly with-it places like Deadspin, the comments get swarmed by people making the same Jobs! Construction! Development! arguments. At least sometimes people just admit that they like their team and want everyone to pay to keep it around.

  2. and while city general funds aren’t being used, development funds that would otherwise go to other city projects are, as is a gift of free city land.

    Free city land LOL Have you ever been to Detroit? You might wanna look up where the arena is going. Currently that land has zero value and even paying a $1 for it was too much. The Cass Corridor has been a blighted area of the city for almost 50 years. The city even designated two hotels in the area as historic in order to get federal tax credits for development and still no one was interested. “The Local Government” is overly simplistic given that the Detroit Economic Growth Corporation is a quasi-governmental agency that answers to the State of Michigan as opposed to the City of Detroit and given that the DEGC’s diverted tax funds are supposed to be reimbursed by the State of Michigan’s general fund. The State is also the agency that backed the bonds that were sold to pay for the stadium, not the City of Detroit, so the taxpayers that are on the hook should things go wrong are State residents. Trust me a Republican governor, has no interest in helping the city (see Milwaukee), unless the project is a win-win situation.

    As far as John Oliver goes, the dude is a comedian so I don’t expect him to have some in depth analysis on the situation (The quip about the Wings was all of 20 seconds long in a show that runs nearly 30 minutes). If he actually had some facts, he would know that the DDA is not part of the local or municipal government, a fact that many others have pointed out time and time again. So no, bankrupt Detroit is not spending a dime on this project since zero dollars are coming from the general fund. This is a far cry different from the usual public funding mechanisms and Oliver is not being honest by not noting the difference. Plus the main argument used against arenas and stadiums, that they merely redistribute economic activity instead of spurring it, are actually a plus for Detroit. Every penny spent in the city (instead of Auburn Hills or the suburbs), is a penny that goes toward rehabilitating the city proper, which will ultimately pay dividends for the entire area.

  3. I’ve been to Detroit many times, and know the Cass Corridor. Yes, there’s plenty of vacant land in the city, but not all of it is right near the Fox Theater et al., which is why Ilitch wanted this land in particular.

    And Oliver never said that city of Detroit money was being spent on the arena. (I checked.) Yes, he said that Detroit was bankrupt and public money was being spent, which implies a more direct connection, but that’s the kind of fudge you need to make occasionally for the sake of a Crazy Bread joke.

  4. Yes, the stadium will create jobs–short-term construction jobs (many of them for workers from outside the Detroit area) and long-term minimum wage jobs (vending hot dogs, taking tickets, etc.). But the stadium will provide a big boost to Detroit’s economy. Yeah. Right. Got it.

  5. From what I’ve culled about Detroit from people i know are investing and developing in the city, after it hit rock bottom the cost to develop met the demand and people started taking a vested interest. The idea that land is cheap and worthless shouldn’t be dismissed but if people are keen to invest in the city it’s probably because they are seeing the potential now that it is so cheap. They aren’t developing for charity: they are buying low and hoping the return makes it worthwhile. The notion of bending over backwards to accommodate investment is probably one of the things that got Detroit in this mess in the first place.

  6. This stadium is not creating long term minimum wage jobs because the team already has a hockey arena and presumably they sell hot dogs in it.

  7. I was the first one to say this was a good deal when it originally started out, even though I don’t support demo of Joe Louis Arena. In the original deal, about 5 neighborhoods were scheduled to be completely renovated in exchange for these funds which indeed are state funds which does matter in the sense that Detroit, not Michigan, is the bankrupt entity.

    HOWEVER, as soon as this thing broke ground, Illitch and the Red Wings have already demolished the historic Park Avenue Hotel with the phony excuse of “we forgot to plan room for a loading dock”. Are you kidding me!?!

    I have to wonder how long will it be before the other 5 neighborhood plans get scaled down and/or the other building next to the Park Avenue Hotel is scheduled for demolition. This project could be worthy of public investment, but so far it’s the regular ole Olympia Entertainment failing to live up to expectations.

  8. @Jordan Baer
    Thank god someone finally demolished the Zombieland building, it was an eyesore for years. Park Avenue has a vastly longer history of being a flop house than an actual hotel, plus they’re renovating an identical building next door.

    @Neil deMause
    The land for the arena is not exactly across the street like Comerica Park, but I get your point. Still, the DDA had those funds allocated and available for development downtown (those funds couldn’t be used for anything else). Illitch simply took advantage, like any other smart businessman would’ve done while building something of significance. At the end of the day, the project still bring jobs (temporary is better than nothing) and economic activity INTO Detroit without costing the taxpayers of Detroit.

    To the core point, the additional development by the Fox district does bring in money from the suburbs. The city would be more of a wasteland than it already is without some of the regentrification projects going on. Overall, it’s pretty hard to attract businesses and suburbanites to Detroit, so maybe having all the pro teams based there is a good deal for the city. Most of the studies on arena/stadiaim funding conclude that cities are just moving economic activity from one area to another, thus not creating additional or new economic activity (or limited relative to the cost). In the case of Detroit and Michigan (Lions moving back from Pontiac and hopefully the Pistons will do the same in the near future), that appears to be the intent– move the economic spending from the suburbs into the city.

  9. Ilitch also bought up ridiculous amounts of land in what investors called lottery tickets. What wasn’t historically available was bought up a decade ago and they asked for sometime 5 times as much as the estimate.

    The Detroit arena issue is far more complex than most including Oliver care to examine.
    The State money which is collected annually can be applied to large developmental projects. So no to the education, police and fire crowd, it isn’t accessible for those so that angle is really irrelevant.

    The Cass Corridor is a wasteland. This project connects Woodward from the river to the entertainment district on to Wayne State. It makes the M-1 light rail project, possible an incredibly important project in my opinion. Many leaders have been moving their headquarters back in town in anticipation of this project already.

    All of these are case by case. Detroit desperately needs this investment, Ilitch is going to wind up spending north of 500 million in personal wealth. Will he make a profit? I am sure that he will. But the Cass corridor is a ghost town, it is everything people like to point out is wrong with Detroit. The Wings leave behind waterfront property for redevelopment. They bring the biggest concert venue in from the suburbs where the Palace will now surely lose dates. There are a lot of net gains here.
    I understand people that hate public funding. This wasn’t done with the Detroit city money. They kept the corrupt Detroit politicians out of it.

    I am excited to see it happen. If you’re going to take shots at it, avoid things like Detroit is bankrupt because it has nothing to do with the funding and should be celebrated that much more because of the massive investment they are receiving from Ilitch and the State.

  10. Pretty much anyone willing to build anything in Detroit would get a lot of perks to do so. They give houses away for $500. I go to Detroit a couple of times a year for Wings games and the Auto Show. My wife has said to me when we go that she gets depressed walking around that city and she grew up in Karachi.

  11. Why does a billionaire need to take money from a broke city? It’s just how we roll, baby!

    I love the smell of public stadium cash in the morning!

  12. I love how people complain about subsidies and public money going towards sports, but our government is doing the same thing on an even larger scale with corporations. Some examples from here – GM got 2.3 billion in 2009 from Orion Township, Chrysler got 1.3 billion in 2010 from the state of Michigan and Ford got 2.3 billion in 2010 also from the state of Michigan.

    Oh and don’t forget how close Dan Gilbert, the current Detroit savior de jure, came to moving his entire company to Cleveland before the city of Detroit offered him $200 million in tax incentives.

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