SBD/December 19, 2013/Facilities

Detroit, Ilitch Family Near Debt Settlement To Pave Way For New Downtown Arena

Detroit could move forward with the $650M arena with the settlement
The city of Detroit is "on the verge of settling a long-standing debt it says is owed" by Red Wings Owner the Ilitch family so it "can move forward with a plan to build a new hockey arena near downtown," according to Guillen & Helms of the DETROIT FREE PRESS. City officials said that the Ilitches "could owe the bankrupt city" up to $80M in payments "tied to cable TV revenues, which were included in a 1980 amendment to the Red Wings' original lease of Joe Louis Arena before the Ilitches bought the team" in '82. City records show that it is "unknown whether the Ilitches ever have paid the city anything related to such revenues." It also is not clear "how much of an effort the city has made over the past 30 years to assess and collect any money." But now Detroit is "expected to offer a settlement" of about $6M "to resolve the cable TV issue and a variety of other unpaid bills" at the arena. Olympia Entertainment, which is owned by the Ilitch family, "has maintained through the years that the city is not entitled to any cable TV money." The company told the city in '07, "Olympia has neither sold any such rights nor has it received any money for the sale of such rights." Olympia's position has "made it difficult for the city to calculate how much it believes the company owes." The settlement of the debt, "including any outstanding payments for playing" in Joe Louis Arena, is "expected to be discussed" during a City Council public hearing tomorrow. Some cities "tried to extract such revenues in leases of publicly owned or financed arenas decades ago, but the practice fell out of favor because of deep disputes about what exactly the teams had to pay" (DETROIT FREE PRESS, 12/19).

TAX SAVINGS: In Detroit, Christine Macdonald reports the Ilitch family of companies "saved nearly" $1.8M off yearly tax bills "by appealing city assessments" over the last three years. The Illitch companies "won appeals on assessments on 42 properties." Most were downtown parking lots, but others "included two parcels in the Motor City Casino complex and the vacant United Artists building" (DETROIT NEWS, 12/19).
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Facilities, Detroit Red Wings, NHL

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