A new Red Wings arena moved a key step ahead Wednesday as a state agency, the Michigan Strategic Fund. approved $450 million in private activity bonds to finance construction.
Good news for Detroit, particularly right now, merits an announcement straight from the boss.
“This new entertainment district will be much more than a new arena for the Detroit Red Wings," says a 10-paragraph statement from Gov. Rick Snyder. "This is a project that will help revitalize Detroit.”
“This project creates another major destination point for residents and visitors alike that builds on prior investments along Woodward from Comerica Park and Ford Field to the new Whole Foods in Midown. The Ilitch family organization is making an enormous investment in the city and state bond financing makes this project a true public-private partnership.”
The 18,000-seat arena west of Woodward Avenue and I-75 is part of a wider plan for a 45-acre district with shops, residence, offices and restaurants around the replacement for Joe Louis Arena.
Olympia Development of Michigan, an Ilitch-owned company, last month signed a memorandum of understanding with the Detroit Downtown Development Authority and Wayne County that lays out the $650-million overall project's private and public financing.
Olympia Development is expected to cover 56 percent of the cost, with public sources contributing 44 percent, says the announcement from Snyder's office.
Detroit's Downtown Development Authority intends to use about $284 million from property taxes captured within its 615-acre downtown district to pay off the state bonds.
No design and construction timetables are set yet.
“This vital community development will provide thousands of jobs for city residents during construction and new full-time jobs when the facilities are completed,” Strategic Fund chair Michael Finney says in the state handout. “This vital community development will provide thousands of jobs for city residents during construction and new fulltime jobs when the facilities are completed.” Finney also is president and CEO of the Michigan Economic Development Corp.
Detroiters must fill at least half the construction jobs under the deal with state.
At Crain's, sports business writer Bill Shea explains that the Strategic Fund can sell a limited amount of tax-exempt private activity bonds on behalf of private companies building projects for public benefit. He also fills in this background:
Critics have blasted the arena deal as unnecessary subsidies for a billionaire pro sports team owner in a city in municipal bankruptcy.
Detroit's state-appointed emergency manager, Kevyn Orr, has said the city's recent Chapter 9 bankruptcy protection filing won't affect the arena project.
