Red Wings owners to get $74m bonus subsidy for building parking garages for themselves

If you’ve been remotely awake the last couple of weeks, you’ve no doubt heard about the controversy around the Detroit Red Wings arena, which the team’s owners the Ilitch family promised would create tons of new development in the surrounding district and which instead led mostly to lots of parking lots. Injury, get ready to meet insult: The Ilitches are about to pocket $74 million in bonus subsidies from the city because they built, among other things, parking garages:

Ilitch-owned Olympia Development has made at least $200 million in building investments within the arena district, popularly known as District Detroit. That spending fulfills the organization’s minimum legal commitment for so-called “ancillary development” around the new sports venue where the Red Wings and Pistons have played since fall 2017…

The $200 million goal was met by development of two parking decks, the Google office at the south side of the arena and the still-under-construction Little Caesars headquarters on Woodward.

That Google office, which opened last year, employs all of 100 people and is actually in the arena itself, so it’s hard to call it additional development. The parking decks are for the Red Wings (and their tenants, the Pistons), while the Little Caesars headquarters is for the pizza company owned by the Ilitches. (One garage will feature some ground-floor retail stores, at least, if anyone rents the space.) So while that’s all certainly an “investment” by the team owners, it’s an investment in their own business, for which they’ll now be collecting a check from city taxpayers covering 37% of their $200 million cost.

The Detroit Free Press has this as increasing taxpayers’ total arena outlay to $398 million; there are so many moving parts to this deal — stadium construction bonds, demolition costs, free city land, etc. — that I can’t confirm that independently, but it sounds about right. The lesson here, as the lesson pretty much always is, is for god’s sake don’t sign leases allowing team owners to rake in additional subsidies for easily attainable goals that gain local residents pretty much nothing. It would have been easy enough to tie the bonus subsidy to jobs created instead of money spent, or exclude spending on the Ilitch’s own businesses, or any number of other requirements, but the state officials running Detroit when the arena deal was agreed to during the city’s bankruptcy seem not to have been interested in any of that. I would say that I hope at least future elected officials in Michigan and elsewhere would learn from this mistake, but given past experience, really I don’t hope that hard at all.


5 comments on “Red Wings owners to get $74m bonus subsidy for building parking garages for themselves

  1. Remember, this is the same city that bought the Fox Theater, under the threat of condemnation and demolition, for a relatively tidy sum, then sold it to the Ilitch organization FOR A BUCK. ONE. DOLLAR. Oh, and the director of the Downtown Development Authority, charged with the benefit of the city as a whole, not only signed the condemnation notice, but took a cush job with the Ilitches shortly after the transaction.

    • Just another example of the type of corruption that has been institutionalized across most of the western world. Didn’t the guy who rammed through the Braves stadium in Cobb county go to work for an affiliated company after he was ousted from his commissioner post?

      And the individual in charge of the treasury dept made his money by purchasing a small bank in California and turning it into an illegal foreclosure machine, in which homeowners who weren’t even ‘eligible’ to be foreclosed upon (IE: delinquent on payment) were foreclosed on.

      IF we could bring some of the average citizens of 4th century Rome to the present day, I suspect they would see some strong parallels between the state of their ‘union’ and western civilization today.

      The issues isn’t that there haven’t always been criminals making their way into high places… it’s that it now seems so commonplace people barely notice, let alone do anything about it.

      • Tim Lee — yep:

        https://www.ajc.com/news/local-govt–politics/former-cobb-chairman-tim-lee-lands-new-economic-development-gig/rnwd49okHB9kVx4TzJGjiJ/

        Mnuchin — yep:

        https://www.huffpost.com/entry/steven-mnuchin-foreclosure-king-of-america_b_5a020bf6e4b06ff32c93f55f

      • Thanks…. and I forgot to even mention Jeff Davison, the Calgary city councillor taking the lead on negotiating the new arena for the Flames that the public will almost certainly end up paying for…

        and how by pure chance, he spent ten years working as an executive for principal Flames owner Murray Edwards’ energy company…

        Or the hard line Brexiteers in England, most of whom appear to have heavily shorted the pound…

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