Deal With Detroit Will See Ilitch Family Retain All Revenues From Red Wings' New Arena
The Red Wings under a new deal with state and local development authorities for the team's soon-to-be-built arena "will no longer have to share 10% of ticket proceeds, 7% of suite sales, 10% of food and beverage concessions, 5% of souvenir sales and other revenue from parking," according to Guillen & Reindl of the DETROIT FREE PRESS. An agreement that had existed between the team and the City of Detroit for more than 30 years "will disappear," along with about $7M "in revenue the city received annually from the team’s home games." Instead, that money "would belong" to the Ilitch family, which owns the Red Wings. Any future proceeds "from the selling of naming rights" would also go to Ilitch family. The new arena, set to open for the '16-17 NHL season, is "expected to revitalize a commercial dead zone between downtown and Midtown and later anchor a proposed spin-off development of residential, entertainment, retail and office buildings" worth $200M. The Ilitch family's Olympia Development will "pick up 42% of the arena's construction cost," while the other 58% will come from "tax revenue collected by Detroit's Downtown Development Authority to pay off state-issue bonds." The authority will "own the arena and lease it -- rent-free -- to the Red Wings for up to 95 years." Some residents and elected officials have publicly and privately "questioned whether negotiators should have gotten more in the deal for state taxpayers," as well as "more financial sweeteners for the City of Detroit" (DETROIT FREE PRESS, 3/2).