Red Wings, Detroit officials plan new $650 million home for NHL team in downtown sports zone

  • Article by: JEFF KAROUB , Associated Press
  • Updated: June 19, 2013 - 11:05 PM

DETROIT — The Detroit Red Wings and city officials on Wednesday announced a $650 million plan for a new arena development for the NHL team in Detroit's downtown entertainment and sports district.

Plans for an 18,000-seat arena were announced by the team's owners and local economic development officials. Red Wings owner Mike Ilitch has long said he wanted a replacement for the 32-year-old Joe Louis Arena.

The new proposal — essentially a framework of financing and development plans — still needs to be approved by the City Council and a handful of state and local agencies, but it's seen as an important first step. The Red Wings said there will be $367 million in private investment and $283 million in public funds in the complex, which would also include residential, retail and office space.

Developers said the public money would come from existing economic development funds and requires no new taxes or funds from the cash-strapped city. Detroit, the largest city in the country under state financial oversight, is struggling with a long-term debt that emergency financial manager Kevyn Orr believes is more than $17 billion.

"Today, this public-private partnership took a significant step forward in laying the groundwork for a major catalyst development, which will create approximately 8,300 jobs, stimulate economic activity and have a positive and lasting impact on our community," said Christopher Ilitch, son of Mike Ilitch and president and chief executive of Ilitch Holdings Inc., another family company.

The city's Downtown Development Authority approved a "memorandum of understanding" with Olympia Development of Michigan, which is owned by Ilitch and his wife, and Wayne County, home to Detroit. Ilitch also owns the Detroit Tigers, and his family owns Little Caesars Pizza and downtown Detroit's Fox Theatre.

Under the plan, the authority would own the arena and event center complex, while Olympia Development would have exclusive rights to use, manage and operate it, and hold naming rights.

The arena is slated to be built near the Detroit Tigers' Comerica Park and the Detroit Lions' Ford Field, close to the intersection of Interstate 75 and Woodward Avenue. The proposed location is a couple miles away from the Red Wings' current arena.

Red Wings officials said it was too soon to estimate when construction would start or end.

Michigan lawmakers in December approved legislation allowing property tax dollars collected by the Downtown Development Authority to be used for the development. The authority has been allowed for nearly two decades to finance economic stimulus projects by selling revenue bonds to be paid off with the tax money. It takes in about $12.8 million a year that otherwise would have gone into a fund for public schools statewide.

Developers and supporters of that legislation said it will create thousands of new construction jobs and pump $1 billion into Michigan's economy. Opponents counter that funding a private stadium with taxpayer dollars shouldn't be a priority, especially when that money was otherwise going to the School Aid Fund.

"We're talking about jobs ... talking about enhancing the entertainment district. It's a win-win for everybody. The Ilitch family has been a very big supporter of Detroit and we agree that Joe Louis Arena is dated," Wayne County Executive Robert Ficano said, adding that county road funds may be used for some infrastructure work associated with the new stadium.

Mayor Dave Bing said in a statement that the project will "continue to add momentum to the transformation of the city." Detroit is experiencing economic activity in its downtown and Midtown neighborhoods, but other parts of city are grabbling with tens of thousands of abandoned or vacant homes and businesses.

Orr, the city's state-appointed financial emergency manager, didn't return messages seeking comment Wednesday.

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