Kukla's Korner

The Malik Report

CNN weighs in on the Wings’ rink financing amidst Detroit’s municipal bankruptcy

This was inevitable: I know that TMR readers are having a spirited discussion regarding the merits of the Downtown Development Authority, State of Michigan and Michigan Strategic Fund's approval of $450 million in bond sales to help fund the Red Wings' proposed rink and surrounding retail development...

And CNN's Chris Isadore finally caught on:

Detroit's financial crisis hasn't derailed the city's plans to spend more than $400 million in Michigan taxpayer funds on a new hockey arena for the Red Wings.

Advocates of the arena say it's the kind of economic development needed to attract both people and private investment dollars into downtown Detroit. It's an argument that has convinced Michigan Gov. Rick Snyder and Kevyn Orr, the emergency manager he appointed to oversee the city's finances, to stick with the plan. Orr said Detroit's bankruptcy filing won't halt the arena plans.

"I know there's a lot of emotional concern about should we be spending the money," said Orr. "But frankly that's part of the economic development. We need jobs. If it is as productive as it's supposed to be, that's going to be a boon to the city."

Continued, and, surprisingly enough, the article's worth your time...

Filed in: | The Malik Report | Permalink
 

Comments

Joe Z.'s avatar

So this article states that the money actually could go to schools, pensions and so on. Contrary to what was written in your piece “with downright nasty comments” (I would really like an example of such a “downright nasty” comments).

It was simply decided last December that it would go to “downtown development”. And now everyone jumps on the train that once made decisions are irreversible, way to progress with that set of mind.

But after this is done, people like you George (“like you” in the sense of supporting the idea) will relize that creating several thousand temporary and much less long term jobs came along with a huge price tag, by furthing cutting the economic fundament for all those people working in Detroit today….

Posted by Joe Z. from Austria on 07/26/13 at 03:46 PM ET

Avatar

But frankly that’s part of the economic development. We need jobs. If it is as productive as it’s supposed to be, that’s going to be a boon to the city.”

Ding.  Ding.  Dingydingding.

‘Why yes, gullible plebes, if our investment of however many hundreds of millions of dollars in subsidy to a rich owner creates a bajillion or so jobs, everything will work out just fine.  Now granted, no other similar investment has done anything approaching that, but surely, SURELY you can trust us this fifth/sixth/seventh time to have discovered the secret formula with which we can contravene the basic laws of economics.  Just allow us to spend another 9 digits of your tax dollars.  And you’ll see.  Of course, I, personally will be long gone when the butcher’s bill comes due.  Oh well’

So, how many jobs did Comerica Park ‘create’.  Ford Field?  What kinds of jobs are we talking about here?

But after this is done, people like you George (“like you” in the sense of supporting the idea) will relize that creating several thousand temporary and much less long term jobs came along with a huge price tag, by furthing cutting the economic fundament for all those people working in Detroit today….

Agree 100%.

George’s position on this wouldn’t be so amazing/dismaying/amusing if we hadn’t seen exactly this already play out with Comerica Park and Ford Field.  Detroit gave super rich owners hundreds of millions, a great big stadium was built… and then what?

Nothing real, that’s what.  Hey, those stadiums are great for me.  I can drive in, see stuff if I want, and drive away.  Yippee.

But a HOCKEY stadium, boy, that’ll really do it. 

The thing that has me shaking my head in disgust years in advance is going to be reading George talking about what a great deal it would be for the city of Detroit to spend another 9 digits to bring the Pistons down from Auburn Hills. 

I mean, it’s for the city, right?  How, oh how, could it possibly go wrong?

Posted by HockeyinHD on 07/26/13 at 04:05 PM ET

cowboycoffee's avatar

ugh

Posted by cowboycoffee from San Francisco, CA on 07/26/13 at 04:13 PM ET

Avatar

As a quick aside, I dimly recall a discussion wherein JJ chided me for making assumptions on the nature of the financing after I posited that as most arena’s received significant to a majority of public funding it stood to reason that the next one would demand that as well.

The arena will be paid for with a $450 million bond issue that will be repaid over the next 30 years. Taxpayers will be paying almost two-thirds of the cost of the arena—$283 million—and private developers will cover the rest.

What a gigantic surprise.  I certainly don’t expect JJ to review, retract or otherwise moderate his comments, beyond a general recollection I don’t even know precisely what they were because, come on, who cares?  Still, wow.  Even if all I remember is all there was (and I tend to think JJ added a little hot sauce to his comments because that’s his move), he should probably feel a little dumber today than he did yesterday.

Posted by HockeyinHD on 07/26/13 at 04:16 PM ET

J.J. from Kansas's avatar

So this article states that the money actually could go to schools, pensions and so on.

.

Most of the tax money going into the project would otherwise be going into Detroit schools, which are also under state control due to their dire finances. But the lost money is slated to be made up for by the state government according to Michigan’s school-funding formula.

“The schools won’t lose a dollar,” said Robert Rossbach, spokesman for the Detroit Economic Growth Corp., the non-profit agency overseeing the project. “It was designed to have minimal impact on city of Detroit operations.”

The article does not state that the money could go to “pensions and so on.” Nowhere in the article is that stated. The piece I quoted is directly from the article which discusses how the use of the DDA money for DDA purposes is not keeping that money away from schools (or, more to the point, would not increase how much funding the schools get overall).

It’s important to speak truthfully about such matters.

Posted by J.J. from Kansas on 07/26/13 at 04:17 PM ET

J.J. from Kansas's avatar

I dimly recall

Posted by HockeyinHD on 07/26/13 at 04:16 PM ET

That’s all you really had to say before trying to pick a fight with me over a discussion you don’t actually remember well enough to speak truthfully about all these months later.

Posted by J.J. from Kansas on 07/26/13 at 04:19 PM ET

Joe Z.'s avatar

It’s important to speak truthfully about such matters.

Fully agreed!

but the lost money is slated to be made up for by the state government according to Michigan’s school-funding formula.

So, tax payers are going to spend money they don’t have twice, ok.
Neo-liberals always use the argument of compensation, without mentioning where the compensation comes from…..

 

Posted by Joe Z. from Austria on 07/26/13 at 05:15 PM ET

J.J. from Kansas's avatar

Neo-liberals always use the argument of compensation, without mentioning where the compensation comes from…..

So mention in detail where it comes from, because the State of Michigan is a different set from the Municipality of Detroit.

There’s also a cart-before-horse thing going on with the concept of the DDA money and where it goes in relation to schools. Remember, the DDA is specifically chartered to use their money for downtown development. The part where it would go to schools is a tack-on that captures money that isn’t being specifically used for the purpose for which it’s collected.

The compensation comes from Michigan’s actual state budget which is targeted for school funding. Calling it “lost” money or money that would otherwise go to schools is like calling the stuff you spend on comic books “money my parents give me which would otherwise go to pay for school lunches if I chose to eat.”

Posted by J.J. from Kansas on 07/26/13 at 05:34 PM ET

J.J. from Kansas's avatar

That also may be the first time somebody has ever accused me of being a neo-liberal, BTW.

Posted by J.J. from Kansas on 07/26/13 at 05:39 PM ET

Hippy Dave's avatar

I for one worked in downtown Detroit before the construction of Ford Field and Comerica Park and I remember what it was like then compared to what it is now.  Downtown is a better place for it (and the CompuWare investment) and this development will continue the city’s growth, encouraging more people to move in and actually live in the city again.  This is an obvious trend to anyone who visits the city with any regularity.  That being said there’s a lot more to Detroit than just downtown and those areas need investment as well.

You’ve got to spend money to stimulate an economy.  Austerity didn’t work in Europe and it won’t work in Detroit.  That’s that.

Posted by Hippy Dave from Portland by way of Detroit on 07/26/13 at 06:41 PM ET

WingsFaninCO's avatar

Posted by Hippy Dave from Portland by way of Detroit on 07/26/13 at 06:41 PM ET

Do you have any fictitious numbers pulled out of your ass to support that?  Can you make some wild assumptions and extrapolate them into dollar amounts for me?  Then, can you please post the same text in 4 or 5 different comment threads and hurl insults at anyone who dissents?  I know it’s asking a lot, but it’s obviously the only civilized way to discuss this.

Posted by WingsFaninCO on 07/26/13 at 06:48 PM ET

cowboycoffee's avatar

double ugh

Posted by cowboycoffee from San Francisco, CA on 07/26/13 at 06:57 PM ET

George Malik's avatar

Triple ugh. Come on now.

Posted by George Malik from South Lyon, MI on 07/26/13 at 07:02 PM ET

christpuncher's avatar

Block user option is wonderful Paul! Great addition to KK Hockey! Thank you so much George for your tireless and near-insanely in depth work on the Red Wings! I can’t properly express how much I appreciate your blog posts!!

Posted by christpuncher from Detroit, MI on 07/26/13 at 08:38 PM ET

Avatar

Posted by Joe Z. from Austria on 07/26/13 at 03:46 PM ET

Joe Z, please use the entire article in make your point.

“Most of the tax money going into the project would otherwise be going into Detroit schools, which are also under state control due to their dire finances. But the lost money is slated to be made up for by the state government according to Michigan’s school-funding formula.”

The real problem with the detractors posting here is that their point of view is unless something will save Detroit all in one swoop it isn’t the right thing to do. This “Neo-Conservative” point of view is as simple minded as the brains that put Detroit in this situation—Lee Iacoca please step forward.

HockeyinHD’s behavior is quite telling in why the other stadiums have not panned out in the ways he would like,

“Hey, those stadiums are great for me.  I can drive in, see stuff if I want, and drive away.”

“...and drive away.” There is no care on his/her part to participate in rebuilding Detroit. HockeyinHD would rather get out of there just as quick as arrived. I’m sure this behavior is not his/her alone. By not supporting a Wing’s arena in Detroit s/he actually advocating for more “white flight” as the team, its fans and those jobs moves to the suburbs or worse, Red Wings Fans, to Seattle, WA—they are getting desperate for another pro-sports team. How many of you will drive in, see a game and drive away then?

To HockeyinHD’s credit, s/he does use vague terms in easily predictable ways so that why actual facts and figures do come out s/he is shown to be correct….except in all those instances when JJ actually show him/her being in error.

Posted by Hippy Dave from Portland by way of Detroit on 07/26/13 at 06:41 PM ET
I second that. I live and went to school downtown back when the Shelter wasn’t the glamorized venue it is now. But, with all the change that has happen since, I would say Detroit is making progress—although very slow—the deterioration of the city went at about the same pace.

Posted by WingsFaninCO on 07/26/13 at 06:48 PM ET

Oh my god! Funny!!!!!

Ditto to chrispuncher too!

Posted by howeandhowe from Seattle on 07/26/13 at 09:29 PM ET

Avatar

Posted by Joe Z. from Austria on 07/26/13 at 03:46 PM ET

Joe Z, please use the entire article in make your point.

“Most of the tax money going into the project would otherwise be going into Detroit schools, which are also under state control due to their dire finances. But the lost money is slated to be made up for by the state government according to Michigan’s school-funding formula.”

The real problem with the detractors posting here is that their point of view is unless something will save Detroit all in one swoop it isn’t the right thing to do. This “Neo-Conservative” point of view is as simple minded as the brains that put Detroit in this situation—Lee Iacoca please step forward.

HockeyinHD’s behavior is quite telling in why the other stadiums have not panned out in the ways he would like,

“Hey, those stadiums are great for me.  I can drive in, see stuff if I want, and drive away.”

“...and drive away.” There is no care on his/her part to participate in rebuilding Detroit. HockeyinHD would rather get out of there just as quick as arrived. I’m sure this behavior is not his/her alone. By not supporting a Wing’s arena in Detroit s/he actually advocating for more “white flight” as the team, its fans and those jobs moves to the suburbs or worse, Red Wings Fans, to Seattle, WA—they are getting desperate for another pro-sports team. How many of you will drive in, see a game and drive away then?

To HockeyinHD’s credit, s/he does use vague terms in easily predictable ways so that why actual facts and figures do come out s/he is shown to be correct….except in all those instances when JJ actually show him/her being in error.

Posted by Hippy Dave from Portland by way of Detroit on 07/26/13 at 06:41 PM ET
I second that. I live and went to school downtown back when the Shelter wasn’t the glamorized venue it is now. But, with all the change that has happen since, I would say Detroit is making progress—although very slow—the deterioration of the city went at about the same pace.

Posted by WingsFaninCO on 07/26/13 at 06:48 PM ET

Oh my god! Funny!!!!!

Ditto to chrispuncher too!

Posted by howeandhowe from Seattle on 07/26/13 at 09:29 PM ET

Joe Z.'s avatar

That also may be the first time somebody has ever accused me of being a neo-liberal, BTW.

Posted by J.J. from Kansas on 07/26/13 at 05:39 PM ET

That wasn’t directed at you, it was more towards Robert Rossbach

Posted by Joe Z. from Austria on 07/27/13 at 07:16 AM ET

Joe Z.'s avatar

You’ve got to spend money to stimulate an economy.  Austerity didn’t work in Europe and it won’t work in Detroit.  That’s that.

Actually there was no austerity, in the sense of saving money everywhere, in Europe, quite the contrary. I am sure you are referring to the PIGS. The austerity in Greece was done by cutting wages, employment, health systems, pensions, etc. (sounds familiar?) That’s the part of austerity you always hear, but what you don’t hear is that trillions (10^9 in the us, right?) of Euros flown to Greece to “stimulate the economy” in the end it was used to buy military equipment and to bail out debitors of german and french banks so they won’t feel the impact of their bad investements. So saying that austerity didn’t work in europe is wrong, since it never truly happeend…

On the other hand noone asks why Greece, Italy, Spain, Portugal are in such big trouble, they were sending money they didn’t have in projects that didn’t pan out (like in spain where they built hunderd of thousands of flats where noone can live in, all co-sponsored by the tax money) now in Spain they have like 60-70% youth
unemployment. Instead of taking care about youth employment in 2000 where several intellectuals predicted this development, they continued to invest money of tax payers for projects of rich guys.

I actually not sure why I care so much about this topic, maybe it’s because I feel for Detroit somehow.

The real problem with the detractors posting here is that their point of view is unless something will save Detroit all in one swoop it isn’t the right thing to do. This “Neo-Conservative” point of view is as simple minded as the brains that put Detroit in this situation—Lee Iacoca please step forward.

That’s what you want to understand, noone ever said there must be a one size fits all solution. What I am trying to say is that investing 450 mill tax money in a new arena is the wrong way. Let Mr. Ilitch pay for his arena himself, just save the 450 mill. of tax money. And before you start again telling me that this is DDA money or/and from Michigan state, etc. This money has to come from somewhere, and it for sure makes a huge difference if I spend 450 mill + interest I actually don’t have. For the city, for the state hell even for the country (looking at the us public debts)

Posted by Joe Z. from Austria on 07/27/13 at 07:49 AM ET

J.J. from Kansas's avatar

I wonder how much different this all would seem to come across if from the very start of things, the Ilitches and the city of Detroit had framed the fund discussion from the point of view that Olympia is essentially paying for the arena while the city is paying for the other 25 acres’ worth of development to be anchored by the arena.

I mean, it would be dishonest, but no more so than the idea that this money is made up of dollars stolen from the grips of schoolchildren or that it’s coming from an indefinitely renewable source base.

Posted by J.J. from Kansas on 07/27/13 at 08:47 AM ET

RWBill's avatar

Still ignored, by convenience or deliberate dishonesty, is the fact that the City of Detroit (its DDA) will be the owners of the arena and collect lease fees from the Red Wings, skim, parking, taxes on parking, and millions $ of concessions from home games, concerts, and other events held there, as well as from new permanent residents and shops.  People who don’t feel comfortable to hang around and walk around the Anchor Bar and others in the dark will feel fine staying at restaurants located under the same complex as the arena.

All of a sudden CNN comes up with numbers that flip the long published numbers that private investment was about 60% of total investment to the entire project, now stating the majority of investment is from public sources, i.e. DDA.

Posted by RWBill from the open bar on The Hasek. on 07/27/13 at 11:21 AM ET

Hippy Dave's avatar

(snicker)

Posted by Hippy Dave from Portland by way of Detroit on 07/28/13 at 02:27 AM ET

Avatar

Joe Z,

This,

“...save Detroit all in one swoop…”

Is not the same as this,

“...[no one] ever said there must be a one size fits all solution.”

You are the one reading what you want to read.

Posted by howeandhowe from Seattle on 07/28/13 at 11:49 AM ET

Add a Comment

Please limit embedded image or media size to 575 pixels wide.

Add your own avatar by joining Kukla's Korner, or logging in and uploading one in your member control panel.

Captchas bug you? Join KK or log in and you won't have to bother.

Smileys

Notify me of follow-up comments?

Feed

Most Recent Blog Posts

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.