Ilitch Family, Detroit Development Authority Agree On $650M Arena, Entertainment District
The Detroit Downtown Development Authority yesterday "approved a plan offered" by Red Wings Owner the Ilitch family for a $650M "multipurpose arena and entertainment district within easy walking distance of Ford Field and Comerica Park," according to a front-page piece by Louis Aguilar of the DETROIT NEWS. The proposed 45-block area, "described as an 'entertainment district,' also will include retail, office and residential space, a hotel and parking buildings." The public, through an "economic development fund," will pay $283M toward the project, and $367M will "come from private funding sources -- a 44-56 percent split." But officials "emphasized there will be no new taxes, and the money won’t come out of the city’s battered coffers." The DDA "entered into a memorandum of understanding with Wayne County and Olympia Development of Michigan, the real estate arm of the Ilitch empire, that proposed the project’s financing and location." It is the "first step in a series of approvals needed from city, county and state agencies." The DDA will own the 650,000-square-foot, 18,000-seat arena, and Olympia Entertainment, "another unit of the Ilitch organization, will manage it under a long-term contract." The Red Wings will pay $11.5M "annually toward the project, as an arena concession fee." The DDA will pay a projected $12.8M per year "from property taxes collected from within its boundaries." This revenue stream, which "could vary each year depending on the economy, would repay 30-year bonds, issued by the Michigan Strategic Fund, used to finance construction." Detroit Economic Growth Corp. President & CEO George Jackson said that he "hopes to wrap up negotiations by year’s end, but there’s no firm timetable for construction or when the first puck will be dropped" (DETROIT NEWS, 6/20). In Michigan, David Muller noted the "timeline for the actual project to be complete is still a ways off," with DEGC spokeperson Bob Rossbach saying that '16 or '17 would be an "aggressive finishing point" (MLIVE.com, 6/19).
LESS IS MORE: In Detroit, Karl Henkel notes the arena's seating capacity is "roughly 10 percent fewer than the 20,066 at Joe Louis Arena." The "idea behind new stadiums and arenas is to create more value, and in most cases, that means shrinking the capacity to improve sight lines and game experiences." It also is a "move to combat the growing secondary ticket market" (DETROIT NEWS, 6/20). Also in Detroit, Brian McCollum notes officials are "billing it as a multipurpose venue that would host concerts and entertainment events year-round." Since talk of the proposed venue "began percolating several years ago," concert industry experts said that a new arena will "likely become an instant magnet for many acts as they sketch out Detroit tour stops" (DETROIT FREE PRESS, 6/20).
YO JOE: In Detroit, John Niyo writes under the header, "Joe Louis Arena Will Scarcely Be Missed When Red Wings New Arena Goes Up." It is a "common refrain by now, but the Joe -- the fourth-oldest arena in the 30-team NHL -- was outdated almost from the moment it opened in 1979." The steps are "too steep" and the concourse is "too narrow and dimly lit." These days the "bathroom lines are legendary in length." As modern "amenities go, it leaves much to be desired." But to be "fair, it's also one of only three NHL arenas that aren't currently named for a corporate sponsor" (DETROIT NEWS, 6/20). Also in Detroit, Helene St. James writes, "At this point, the best part about the Joe is that it’s not named after a corporate sponsor." Otherwise, it is "outdated." St. James: "I don’t see anything but an upside to a new hockey arena" (DETROIT FREE PRESS, 6/20).
FAMILY SHARE PLAN: Meanwhile, the DETROIT FREE PRESS reports the Pistons "might be interested in sharing an arena with the Red Wings someday, but in the near future, that seems unlikely." Palace Sports & Entertainment President & CEO Dennis Mannion has been "making changes and upgrades in the past year as if the Palace of Auburn Hills will be the Pistons’ home for a long time." It is "hard to imagine a scenario in which the Pistons would leave a place with significant investment that still is considered a top-notch facility and move somewhere else to become a tenant" (DETROIT FREE PRESS, 6/20).