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As rink deal nears, it’s trading stories time: Wings to pay Detroit $12.2 mil to settle JLA issues

Some things never change. When Bill Bonds and Mort Crim were more than the inspiration for Anchorman, and when the Detroit News and Detroit Free Press were the only newspapers available for delivery in Garden City save the town's Observer, you could always tell when big political news was about to break.

Inevitably and invariably, WDIV, WJBK and WXYZ and their rario and print counterparts would start trading "scoop" stories regarding the next big thing, and the "scoops" surrounding the Red Wings' follow-on facility have followed that tried and true 80's formula--with a slight "internet age" twist.

On Monday evening, the Detroit Free Press revealed that part of the agreement to transfer 39 blocks of land to the Downtown Development Authority for the sake of paving the way for Joe Louis Arena's follow-on facility involved ensuring that Joe Louis Arena would be demolished and brought down without holding a ticketed event after the Red Wings' last game

As the clock ticks toward a March 31st deadline for the City Council to approve said land transfer, it's the Detroit News's turn to get the scoop, and Christine Ferretti reports that Olympia Entertainment's proposing paying over $12 million to the City to both lease the Joe until next year (and then on a single-year basis, as necessary, after 2015) and settle any arrearages, claimed or existing, that the City has regarding the rink or the Red Wings--but this time, MLive's Eric Lacy has the same details, so the internet era's no longer a two-paper business...

The proposed lease agreement says Olympia Entertainment and the Red Wings are giving the city about $12.2 million in valued “consideration” in the next three years to help settle claims “without admission of fault or liability...”

Olympia Entertainment will pay $5,175,000 in six installments during the next three years along with semi-annual rent payments under the pact. The rent is $1 million a year, subtracting previously received rent and tax payments from the Red Wings owners.

The firm also will annually pay an estimated $350,000 for insurance and another $250,000 over two and a half years for city police and traffic services needed for arena events.

The Red Wings owners have agreed to restore 600 unused parking space at the city-owned parking garage — a projected cost of $1.25 million.

Olympia Entertainment and the Red Wings have continued to use and occupy the arena and to operate and manage the Joe Louis Garage since the lease’s expiration with the city’s blessing. They would still be responsible for ordinary repairs and maintenance of the arena.

Ferreti continues and notes that, at one point, the City claimed that the Wings owed the City up to $70 million in the form of a never-collected tax on cable TV revenues...

And here's Lacy's version:

  • The lease is retroactive to July 1, 2010 and expires at the end of June 2015. The earliest a new arena would be built, according to economic development officials, is 2016.
  • Once Olympia’s lease is up at the Joe Louis Arena, the city agrees to that no events would be held there until it is demolished.
  • On March 25, the Michigan Economic Development Corporation's Michigan Strategic Fund board is scheduled to vote to approve up to $6 million in demolition costs of the Joe Louis Arena.
  • The lease, once approved by the city, resolves any outstanding matters Olympia has with the city in regards to the Joe Louis Arena. ”Claims includes any and all disputes related to Prior Agreements; any and all disputes related to the New Agreements as of the date the New Agreements are signed, and any and all disputes related to the Joe Louis Arena, Cobo Arnea and Joe Louis Parking Garage.” the lease says.

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About The Malik Report

The Malik Report is a destination for all things Red Wings-related. I offer biased, perhaps unprofessional-at-times and verbose coverage of my favorite team, their prospects and developmental affiliates. I've joined the Kukla's Korner family with five years of blogging under my belt, and I hope you'll find almost everything you need to follow your Red Wings at a place where all opinions are created equal and we're all friends, talking about hockey and the team we love to follow.