Dan Gilbert says Detroit MLS stadium will create umpty-bajillion dollars in economic impact

In “economic impact reports are ridiculous, but some are more ridiculous than others” news, Cleveland Cavaliers owner Dan Gilbert says that if Detroit gives him $300 million in city funding plus free land so he can build a soccer-stadium-plus-other-stuff complex on the proposed site of a new jail, it will create $2.4 billion in economic impact, because sure, why the hell not?

I can’t find the actual study anywhere — it’s not anywhere on the website of Rock Ventures, Gilbert’s real estate umbrella firm, or on the site of Mark Rosentraub’s University of Michigan Center for Sport & Policy, which conducted it — but I’m sure I can guess where it came up with that crazy-high impact figure: Gilbert says he’ll spend $1 billion on construction of the soccer stadium and surrounding development, so add in a smidge more for money spent at actual soccer games and apply a standard multiplier effect, and you can certainly get to $2.4 billion. (I’ve asked Rosentraub and Rock Ventures for a copy of the study, and will report back here if I get a look at it.)

Wayne County executive Warren Evans immediately called the study “irrelevant” and said it “does nothing to sway my thinking,” but not because of anything about the numbers — rather, Evans is just concerned that building a soccer stadium will delay getting a jail built. (Gilbert says he’ll build a jail complex elsewhere if he gets the stadium land and money.) It doesn’t sound like this plan is going anywhere fast, but if so, it’s less because of the actual economics underlying it than because Major League Soccer is still less popular than jails, which seems to be the trending message these days.

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7 comments on “Dan Gilbert says Detroit MLS stadium will create umpty-bajillion dollars in economic impact

  1. “…it will create $2.4 billion in economic impact…”

    If there’s one thing we’ve learned from Gilbert, it’s “not without a $70m glass wall it won’t”.

    Question: When these economic impacts are announced, do the beneficiaries include the personal economic benefit that accrues to them in the totals?

    If so, I guess I can see how their figures might be accurate. If Gilbert were to get $1.7Bn in net economic benefit, while $300m or so is spent on the stadium and surrounds, and another $400m may or may not be built by others (maybe including Gilbert controlled or managed companies)…. yeah, that’s $2.4Bn.

    It’s not $2.4 Bn in public benefit. But it might be $2.4 Bn in “impact”.

    Then again, substitution effect etc. The public money spent would have had some economic impact no matter how it was spent.

  2. How much would the jail cost if the city built it on its own. As far as the free land goes, I am pretty sure Detroit is handing that out to anyone who wants to build anything, or they should anyway.

    1. The new jail is already partly built, and would require an estimated $171m to complete.

  3. I understand the arguments against taxpayer funding of new sports stadiums but understand, the county was trying to build a freakin jail on the site of downtown Detroit. An area that has been rapidly booming in recent years and seeing rising rents. Anything is better than a taxpayer subsidized cage where people live rent free in what would otherwise be land in high demand.
    So in this case, a sports stadium will almost certainly generate more revenue than the alternative because the alternative (jail) will generate absolutely zero.
    This is just another reason why mass incarceration and the war on drugs need to be ended, yesterday.

    1. Actually, a sports venue is one of the few other buildings that could fairly be described as a taxpayer-subsidized rent-free cage. And the jail would generate construction economic activity (as well as permanent jobs for corrections officers, etc., which would at least be full-time as opposed to hot dog vendors) just like the stadium would.

      I do get your point, and I know that there’s more to the soccer project than just the stadium. But neither is a very high-value use of the land, which is why I’d really like to see the actual study. (Still waiting for it, btw.)

    2. I agree, there should never be a jail in a downtown. As for the war on drugs , the end of that war has resulted in record addiction rates , deaths , murder and crime rates here in Chicago. Hey but jails are being closed across the country.

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