Detroit group calls for community benefits deal on Red Wings arena

The Detroit community group Corridors Alliance is demanding that any public funding of a new Red Wings arena should include a community benefits agreement to guarantee that jobs go to local residents and protect local homeowners from being displaced:

“We want to hold the development to a higher standard,” [the alliance's Francis] Grunow said. “As time has gone on, there’s been more and more public money included in these projects.”

That’s all well and good, and a CBA would indeed provide some teeth for requiring that the Red Wings actually live up to their promise to hire Detroit residents for the majority of jobs created. The problem with even well-written CBAs, of course (i.e., not this one), is that 51% of the jobs created by an arena project is still not a whole heck of a lot of jobs, especially not once the actual construction is completed.

If the argument for the arena project is that it will help the local economy, then requiring local hiring seems like a no-brainer, but it won’t change the fact that Detroit could create a heck of a lot more jobs for its $261.5 million if it spent it on just about anything else. Which isn’t getting discussed now, mind you — and the state of Michigan has effectively ruled out considering it — but so long as community groups focus on getting a cut of the meager spoils and not the overall policy behind sports subsidies, it’s easy for team owners to buy off opposition by promising to hire the right people.

Edmonton set to break ground on Oilers arena in March, paying-for-it, schmaying-for-it

The city of Edmonton may still be between $50 million and $130 million short on being able to pay for a new Oilers arena, but that’s not going to stop them from breaking ground:

Edmonton’s downtown arena is on course to meet its $480-million construction cost and should be ready to start construction in March, city manager Simon Farbrother says.

“I would say we’re very close to the end,” he said Thursday.

It sounds like Oilers and city representatives have been working with contractors to ensure that the project won’t bust its $480 million budget ($605 million counting land and infrastructure), which would leave it just $50 million short, plus however much the city will end up needing to dig in its pockets for if the local Community Revitalization Levy (aka a Canadian TIF) only produces the amount of revenue the city expected in the first place, and not the amount it decided to project when it suddenly realized it had a funding hole to fill.

The city is apparently still hoping to apply to the province for funds for at least another $25 million — which has never worked before, but can’t hurt to keep asking, right? — but if it doesn’t get it, it can always shuffle some money around and figure it out later. Because that’s worked out so great elsewhere.

Florida Panthers exec says free arena is nice, but free rent would be even nicer

Clearly I’m going to have to update my article on sports team owners asking for operating subsidies even after they get new arenas, because this:

The Florida Panthers professional hockey team says it’s losing more than $20 million a year and needs more public funds to survive.

The struggling team is asking for a rewrite of its contract with Broward county. Under the team’s proposal, the county would use additional tourism taxes to pick up $70 million in BB&T Center costs currently being paid by the Panthers.

That’s a little clipped, so let’s backtrack for a second. Then-Panthers owner Wayne Huizenga got $185 million from Broward County to move from Miami to a new arena there in 1998. In exchange, the team signed a lease guaranteeing it would say put through 2028, and pay $4.5 million a year in rent to defray the county’s construction costs.

The Panthers were just sold in September to a financier named Vincent Viola, who apparently wasn’t content with the free arena the team got in 1998, or the free $4 million scoreboard it got last May, because those were the old guys getting those things. So he’s thinking that maybe the county could tear up his lease, with 14 years remaining on it, and revise that $4.5 million a year in rent. To, like, zero. Because, though the Panthers are making money on running the arena, they’re losing money on running the Panthers:

“This organization has lost between $20 [million] and $30 million on an annual basis,” [Panthers president Michael] Yormark said, “and those dollars have been funded by our owners.”

And this is a problem for Broward County … why exactly no one seems to say, though Yormark did promise that if the county gives them an extra $4.5 million a year, they promise to spend on payroll “at a level competitive with the rest of the National Hockey League,” implying that if they don’t get it they’ll replace their roster with these guys. Which actually might be more entertaining than watching the real Panthers.

Anyway, local officials have to be derisively snorting at this demand, since Viola has no leverage and there’s absolutely nothing in it for the county, right?

Sunrise Mayor Mike Ryan said it is still too early to tell what the proposal could mean for his city, but he cautioned that it would be important to balance the job growth and other benefits against “security, financial, infrastructure, environmental and aesthetic impacts” near the site and beyond.

I guess looked at one way, that could be taken as a way of brushing off Viola without actually telling him where he can stick his request. But I’d still prefer a derisive snort.

Columbus declares “no backsies” on Blue Jackets arena bonds, kicks ballot measure back to elections board

The city of Columbus has finally figured out how to respond to that campaign for a public vote on undoing the Blue Jackets arena bailout deal from 2011, and it’s to just declare the whole thing illegal and let the county board of elections sort things out:

At its first meeting of the year, the city council voted to send petitions to put the issue on the spring ballot back to the Franklin County Board of Elections, to determine whether the petition language meets requirements to get it on the ballot.

It’s unclear when the elections board would decide that issue…

City Attorney Richard C. Pfeiffer Jr. said yesterday that the proposal is invalid because voters cannot overturn the contract, which is to purchase the arena and operate it through 2039.

“The lease documents have been executed roughly two years ago, and this ordinance passed by council made it through the 30-day referendum period without a challenge,” Pfeiffer said. “The proposal would have no legal effect if approved.”

That’s what the initial response was to the plan for a vote on defaulting on the arena bond payments (including from me), but plenty of Ohio legal experts have since said that the initiative is totally legit. Whatever the board of elections decides, expect to see lawsuits challenging its ruling from the losing side, which means this could drag on for quite a while. What happens if a court case is still ongoing when it’s time to vote in May, I have no idea — anybody have an Ohio legal expert handy?

Penguins could seek additional subsidies for housing on old arena site

As part of the Pittsburgh Penguins$290 million arena deal back in 2007, for which the team put in only about one-fifth of the costs (the rest came from the state and a company that got a state casino license in exchange), owner Mario Lemieux got development rights to the site of the team’s old arena. Which he still hasn’t developed yet, and which he may now demand more public subsidies for, according to the Pittsburgh Post-Gazette:

The Penguins have been talking to various city and county officials, including members of [Mayor-elect Bill] Peduto’s staff, about the implications involved in increasing the level of affordable housing from 20 to 30 percent. They have said it likely would require some form of public aid to bridge the funding gap.

“If you’re going to add affordable housing to the project, it generally requires some form of subsidy,” [Penguins COO Travis] Williams said.

That could pose a challenge for Mr. Peduto, who has been trying to limit the amount of public money that goes into the development.

If the Penguins don’t build something there by the year 2017, they lose the development rights, so it seems like Peduto would actually be bargaining from a position of strength here. At least until Lemieux threatens to move the housing to Kansas City.

Detroit city council delays Red Wings land transfer until February to retain “leverage”

The Detroit city council voted on Friday to approve two of the measures required for a new Red Wings arena, expanding the Downtown Development Authority’s tax-increment financing district and redirecting the money to go toward paying off Red Wings owner Mike Ilitch’s construction costs. They did not, however, approve the transfer of city-owned land for the project, kicking that decision back to February.

The council apparently held off on approving the land sale because it wants to maintain “leverage” to cut a better deal, though it’s not exactly clear what it intends to ask for. (Some councilmembers had previously griped about how much the city would be compensated for the land and what guarantees there would be of local job hiring, so those could still be two possible demands.) Pushing the vote back into the new year, though, could scramble things significantly, as five new members will join the nine-member council in January, so who the hell knows how they’ll vote or what they’ll want in exchange for their vote.

Friday’s votes came after “dozens of people” (per the Detroit Free Press) spoke out against the public cost of the $650 million arena-plus-mixed-use-development project. Downtown Detroit landowner Jerry Belanger, who has emerged as one of the loudest critics of the deal, also hinted at filing a lawsuit against the project, asserting, “There could be several aspects of this contract that could be challenged as unconstitutional.”

We also finally got a cost estimate for demolition of the city-owned Joe Louis Arena, the Red Wings’ current home: Detroit Economic Growth Corp. VP Brian Holdwick says razing the arena is expected to cost the state $5 million, bringing the total public cost to $266 million. I hope they voted to put it in money balloons.

Red Wings arena could face council vote tomorrow

Lots going on in Detroit this week around the proposed Red Wings arena:

  • The city council is meeting tomorrow to discuss the arena plan, and could even vote on it, though MLive reports that even after that it would still require “parking agreements, homeland security approvals and an OK from Detroit Emergency Manager Kevyn Orr.” (Homeland security approvals?)
  • Opponents to the arena plan — mostly downtown property owners who see the Red Wings’s arena district as a land grab — are meeting at 3 pm today to discuss how to fight the project.
  • Detroit city officials are apparently set to cut a deal on the overdue share of cable TV revenues that they say Red Wings owner Mike Ilitch owes them, going back to 1980: The city has previously said this could amount to $70 million, but other experts say it’s more like $10 million, and Ilitch says he don’t owe nuthin; since cable rights deals are so complicated that it’s nearly impossible to tell who’s paying what to whom, the city is apparently going to just send Ilitch a bill for $6 million and call it even.

Red Wings’ new home would mean wrecking ball for Joe Louis Arena

Amid all the talk of the Detroit Red Wings‘ plans for a new $450 million downtown arena (public cost to the bankrupt city of Detroit: $284.5 million), little has been mentioned of what would happen to the Red Wings’ old home, Joe Louis Arena. Now it has been revealed: They’d tear it down, of course no team is going to want to have its old arena around to compete with it, what are you, nuts?

The state will pay to demolish Joe Louis Arena after the Detroit Red Wings move into a new facility sometime in 2017 or 2018…

The cost of the demolition and what could be built on JLA’s riverfront location haven’t been determined, said George Jackson, chief of the Detroit Economic Growth Corp., the quasi-public agency that staffs the DDA under a contact with the city.

Jackson said the demolition would happen not long after the Red Wings move out, pending an agreement with the state.

So tack on an as-yet-to-be-determined demolition bill to the public costs of this project. Given that it cost $2.9 million to raze the Pittsburgh Penguins‘ old Civic Arena two years ago, it probably won’t make a huge difference to a project already set to cost taxpayers 100 times that, but money is money.

The news about Joe Louis Arena’s fate came during a Downtown Development Authority special meeting to finally send a concession agreement (they’re not calling it a lease, but: it’s a lease) on the proposed new arena to the city council, at which point that body is expected to finally vote on whether to sign off on the deal. At last word it didn’t sound like councilmembers were going to raise too many serious objections, but we’ll see, maybe starting this week.

Connecticut governor: I have on this piece of paper names of would-be Whalers owners

Connecticut Gov. Dannel Malloy says he’s been contacted by several groups looking to revive the Hartford Whalers — if the state chips in for improvements to Hartford’s arena:

“Over the last six months I have been contacted by several groups who are interested in knowing that should they acquire a team and win the rights to move that team, would we be interested in competing for that team that is with facilities, housing? I have indicated time and time again that we would be interested, although probably not at our sole expense.”

That’s pretty vague, but then, multiple people calling up the governor’s office and saying, “Hey, would you help us out if we could get a team?” is pretty nebulous to begin with. Malloy said he “encouraged at least two groups” (what, he can’t count that high?) that the state would be “active participants” if they were to acquire a team; who knows what that means, except that Connecticut is likely to see lots of haggling in its future over how much more to pour into the Hartford Civic Center (yes, it has a corporate name now, but I can’t be bothered to remember it) on top of the $35 million it just sunk into new scoreboards, concessions, and other facilities, or whether to build a whole new building, in exchange for a team that might never arrive.

Columbus ballot measure to stop payments on Blue Jackets arena purchase set for May

As of yesterday afternoon, the Columbus arena backsies initiative already had enough signatures verified to qualify for the ballot, which means local voters will go to the polls next May to decide whether to stop automatic payments on the $42.5 million in bonds the city and county sold to buy the arena from its private builders back in 2011. (Actually the county sold the bonds, but the city and county both committed to paying them off — here, read the whole convoluted process for yourself, if you dare.) Future payments would then need to be approved by voters in a second ballot measure in November — which means all legal hell is about to break loose:

If approved by voters, the coalition wants that second vote to occur in November.

The initiative is likely to face legal challenges. Franklin County, Ohio State University, the Franklin County Convention Facilities Authority and the state also were part of the arena purchase. Their contracts are not subject to the vote.

City Attorney Richard C. Pfeiffer Jr. and elections officials said they are trying to determine whether such a two-part vote can be put on the ballot with one set of petitions.

“We are still looking into the matter, but those are the right questions to ask,” Pfeiffer said.

Another question city officials are asking: Can voters legally overturn a contract that the city already has signed?

In that 2011 deal, Columbus also exempted the Blue Jackets from making their annual $9.5 million rent payments — adding up to a far bigger subsidy than the actual purchase price, even in present value — but that wouldn’t be affected by the May vote. (According to the petition, which the Columbus Coalition for Responsive Government finally got posted properly on its website.) Still, it would be unprecedented for a city to stop payments on an arena deal it already made, which is why Columbus and Franklin County elected officials are no doubt scrambling their lawyers as we speak.