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Crain’s Detroit Business’s Shea: expansion of downtown district to rink footprint is a sticky wicket

Via Deadline Detroit, Crain's Detroit Business's Bill Shea reports that Detroit's City Council still has some questions regarding the City's benefits if the Council and Mayor decide to expand Detroit's official "downtown" footprint to include the area behind the Fox Theatre and the Cass Corridor near the Masonic Temple--a.k.a. the area in which Olympia Entertainment plans on building a $450 million rink and another $200 million in "economic development" investment.

If the Foxtown and Cass Corridor districts were officially deemed part of "downtown Detroit," they'd be eligible for funding from the Detroit Economic Growth Corporation's (the DEGC) "Downtown Development Authority," which would make the Ilitches' rink/economic development footprint eligible to receive the property taxes that the DDA diverts from downtown businesses toward economic development.

Earning that kind of status from a City Council that's never been anything less than primarily concerned with its own bottom line and friends and contractors' pockets requires a stiff admission fee--according to Shea, the City Council wants to see nothing less than a formal concession agreement between the Ilitches and the DDA as the DDA will own and lease the rink to the Ilitches...

The council will vote on, or allow to die, a proposal to expand the current 615-acre DDA property taxing district by about 40 blocks north of the Fisher Freeway between Grand River and Woodward avenues to encompass the arena district site, said Marcel Hurt, chief of staff for council President Saunteel Jenkins.

The council next meets Dec. 17.

What the council wants to see, Hurt said, is the final concession agreement between the DDA, which will own the arena, and Olympia Development of Michigan, the real estate arm of Red Wings owners Mike and Marian Ilitch's $2 billion Detroit business holdings that also include the Detroit Tigers and the Little Caesars pizza chain.

A draft concession agreement, absent timelines and other details, was made public in June. It would have Olympia operate the venue for 35 years, with 12 five-year renewal options.

It's unclear when the agreement might be finalized and made available to the City Council.

"Negotiations on the (concession management agreement) are continuing," said Robert Rossbach, a spokesman for the Detroit Economic Growth Corp. The DEGC, the city's quasi-public economic development arm, is contracted to staff the public authorities handling the arena project.

That's the tricky part--as Shea notes, there's a "memorandum of understanding" between all parties involved, but it's particularly tricky to try and get a formal concession agreement and formal timelines in place over the course of six-or-so months.

But that's how the cookie is going to crumble...

Olympia paid an estimated $50 million for half the land needed for the arena district, according to a Nov. 1 cost-benefit analysis provided to the council by its Legislative Policy Division.

That analysis recommended the council approve the DDA requests after the final concession management agreement is provided to the council, certain income tax questions related to Olympia and Red Wings employees are answered, and issues related to the future of Joe Louis Arena are considered.

Shea contiues at length and breaks down the entire picture in extensive detail, explaining how everything breaks down.

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Comments

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GEORGE!!!! Any status updates on Pavel? Helm? (Z,, im sure will be out until January)

Posted by Pasha1277 on 12/09/13 at 10:29 AM ET

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The sheer amount of buggery that will be visited upon the taxpayers of Detroit promises to be breathtaking in its scope and ferocity.

As the city trundles down the road to an epic insolvency, their retirees having pensions and benny’s slashed, their schools moldering into piles of brick, paper and hoplessness, their streets lit by housefires rather than streetlights, their police surrounding a 20 block area and abandoning the city at large…

... man, I bet they totally can’t wait to see how frickin’ boss their new half a billion dollar stadium is going to be.  I mean, there might actually be an Aunt Millie’s Pretzel and a Footlocker in the mall portion!  How cool is that?

Awesome.

Posted by HockeyinHD on 12/09/13 at 10:37 AM ET

Mandingo's avatar

The sheer amount of buggery that will be visited upon the taxpayers of Detroit promises to be breathtaking in its scope and ferocity.

As the city trundles down the road to an epic insolvency, their retirees having pensions and benny’s slashed, their schools moldering into piles of brick, paper and hoplessness, their streets lit by housefires rather than streetlights, their police surrounding a 20 block area and abandoning the city at large…

... man, I bet they totally can’t wait to see how frickin’ boss their new half a billion dollar stadium is going to be.  I mean, there might actually be an Aunt Millie’s Pretzel and a Footlocker in the mall portion!  How cool is that?

Awesome.

Posted by HockeyinHD on 12/09/13 at 09:37 AM ET

Posted by Mandingo from The Garage on 12/09/13 at 11:01 AM ET

J.J. from Kansas's avatar

Really got to me at the “schools moldering into piles of brick, paper and hopelessness.”

Then I remembered that was a line lifted directly from Cormack McCarthy’s 2011 Christmas card.

Posted by J.J. from Kansas on 12/09/13 at 11:11 AM ET

George Malik's avatar

No status on Datsyuk or Zetterberg…Waiting for practice.

As for the boo hoos, for *#$%@&’s sake, everything that could have possibly happened to the city in terms of its citizens’ behalf being raped, pillaged and ransacked has already happened a thousand times over.

Nothing that is happening now is anything new, nor is it less than transparent and held accountable to a disturbing level of clarity and culpability by Detroit standards.

The rink will be built no matter how much bluster is blown in its direction, and lamenting it as another “sign of the city’s imminent downfall” is ridiculous. The apocalypse already happened. Now people are trying to deal with it

Posted by George Malik from South Lyon, MI on 12/09/13 at 11:33 AM ET

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Posted by HockeyinHD on 12/09/13 at 09:37 AM ET

I love that people who only use the city to prostitute it’s sports events have such audacious opinions on how the city and its businesses should spend their time and money. If you really care about the city, its people and its schools then move there and make a difference. Otherwise shut the *#$%@& up and keep you opinions for who ever is on city council in your hole in the ground.

Posted by howeandhowe from Seattle on 12/09/13 at 11:50 AM ET

George Malik's avatar

One of the lessons of blogging: for better or worse (and this is not necessarily meant in a demeaning manner), some of us were born to be hockey fans and some of us were born to choose hockey as our means by which to professionally critique everything that doesn’t completely align with our beliefs, perceptions, preferences and presumption that our and only our perception of the world is the correct one.

To each their own.

Posted by George Malik from South Lyon, MI on 12/09/13 at 12:01 PM ET

MOWingsfan19's avatar

Posted by George Malik from South Lyon, MI on 12/09/13 at 11:01 AM ET

Well said, George.

Posted by MOWingsfan19 from I really like our team on 12/09/13 at 01:31 PM ET

cigar_nurse's avatar

Posted by George Malik from South Lyon, MI on 12/09/13 at 11:01 AM ET

This is the generation that we are developing .  The child’s opinion rules over all others regardless of how the family hierarchy is set up.  When the child grows up, they disregard any other opinions or perspectives. Sad

Posted by cigar_nurse from Greenville South Cakalakee on 12/09/13 at 10:12 PM ET

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As for the boo hoos, for *#$%@&’s sake, everything that could have possibly happened to the city in terms of its citizens’ behalf being raped, pillaged and ransacked has already happened a thousand times over.

This is why I find that statement shockingly ignorant, George:  there are new people all the time.

Yes, the people who have been screwed by having to live in Detroit for the past 20-40 years have already had their educations obliterated, their lives stunted and all sorts of other really, really awful things visited upon them by nature of their region of residence.

Guess what?  There are still young people who have to live there, and there are more all the time.

So, yeah, I understand how in some sort of entirely disconnected, intellectually lazy manner someone could kind of convince themselves that ‘the worst has already happened’.  The problem is that such a position is a) silly as I have explained above and b) wrong on the merits, even if it wasn’t ignorant of demographics. 

It can get a whole lot worse.  Your position hints at the mindset of the morbidly obese person who, rather than make any kind of real attempt to change their lives just sighs, stuffs a huge cupcake in their mouth and mumbles ‘hey, the worst has already happened’ around the frosting.

Good plan.

I love that people who only use the city to prostitute it’s sports events have such audacious opinions on how the city and its businesses should spend their time and money.

You say that for the same reason you say most things: because they are easy, thoughtless, and you can fool yourself into thinking it makes you sound remotely competent.

A) I very, very rarely go to Detroit to see a live sporting event.
B) By definition we are not talking about how ‘businesses’ are spending their money.

If you understood the nature of modern taxation even a little bit, you’d comprehend that what we’re talking about here is a rather huge amount of tax dollars being directed towards the construction of an arena specifically to avoid a business having to spend its own capital.  But you don’t understand that.  So you say the things you do.  Alas. 

some of us were born to be hockey fans and some of us were born to choose hockey as our means by which to professionally critique everything that doesn’t completely align with our beliefs, perceptions, preferences and presumption that our and only our perception of the world is the correct one.

The amusing thing about your bout of tedious piety here, George, is how misplaced and hypocritical it is.

You are actually trying to take the position that being a fan of a sport somehow indemnifies you against any of the social and moral implications of that preference.  This is odd, because I’m fairly sure I’ve seen you take some stands on what has happened surrounding the NHL based on your own set of morals (specifically, the lockout and those economic issues), so to hear you rail against that exact thing here makes you sound profoundly self-serving.

Speaking personally, if the city of Detroit wants to spend the money of it’s tax base stupidly, hey, great.  They can all knock themselves out being morons.  Illtch will make out like a bandit (like he did with Comerica) and like the Fords made out with Ford Field.

This does not change the reality that they are, in fact, spending their tax money stupidly.  So sorry if that intrudes upon your ability to watch a hockey game free of all social connection.

Posted by HockeyinHD on 12/09/13 at 10:15 PM ET

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While I admit I have only been in the City of Detroit once in my life. I find it appalling that the government would subsidize a very profitable enterprise in the face of a city in despair. If Illitch really cared about the city he would make this investment on his own to support/help the city, instead of milking it. I know someone will say this isn’t city money, but it is money that could go to support the schools or pay debt, if the Legislature chose to do so. It is unconscionable in my opinion to do this under the current circumstances.

Posted by timbits on 12/09/13 at 11:36 PM ET

George Malik's avatar

Oof, I guess you did want to welcome me back.

It’s going to get a lot worse for people with pensions, no doubt, for those who’ve spent their professional lives earning slightly-below-competitive wages because they thought they were giving back, because they felt they were doing their duty, because they so strongly believed in the city whose emergency manager’s about to toss them out on their butts like so many unsecured creditors. Yes, for them, it’s as bad as it’s going to get.

It is very possible, if not probable, that the DIA, for example, will have to engage in some lend-lease measures to retain its art.

And the all-too-frequent arson, the statuses of certain areas of the city as dumping zones for burning bodies, the high rates of violent crime and the abject poverty…That’s all got a long, long way to go.

But my father was a probation officer in the City during the 70’s and 80’s and 90’s, when there was little outrage, just about as much done by the police department as is done now to deter violent crime and just a grim acceptance of “the way things are” happening while previous administrations were racking up the credit card on the road to municipal bankruptcy.

That’s why the Robocop statue going up in front of the old Central Depot, until it’s taken down by scrappers, anyway, is so ironically placed: there was and still may be more than a kernel of truth to its embracing of gratuitous violence while planted in front of the biggest and once-baddest symbol of the city’s decline.

“Doing business” in the City of Detroit has always been an endeavor in blood money, however, and the expansion of the downtown area by 40 blocks is not exactly going to divert property taxes collected upon “used” land given that we’re talking about the Foxtown district and the few faint shadows of what the Cass Corridor was before the riots in 1967.

Could the tax money be better put to grass-roots initiatives? Could it be better-used to pay down the debt and not throw thousands of retirement-age Michiganders back into the ranks of the “employed by necessity?” Hell yes. Could it be better-used to help restore very basic city services and improve the health, safety and security of the citizens of Detroit who don’t live downtown? Yes.

Is that going to ever happen in the City of Detroit, Wayne County or the State of Michigan?

Not after 40-plus years’ worth of governmental business by the people and for those who can afford to pay to point others’ tax dollars in the direction that benefits them.

No amount of outrage or self-righteous indignation is going to change the course of the rink’s construction.

I would rather make peace with the inevitable by acknowledging that the ruins behind the Fox and the Cass Corridor will finally find some sort of purpose and use other than standing as Mr. I’s contribution to the vast tracts of city land that go unused.

I would rather have at least some of the money that’s obviously going to line the pockets of contractors with connections to the City, the County, the City Council and the Ilitches also go toward something that may line the streets with something other than places that few dare to venture in daylight and fewer in darkness.

At this point, in this environment, some sort of corporate investment downtown that is not a complete “loss” is not exactly unconscionable.

If we are going to be pointing fingers and splitting hairs, I do not understand this concept of moderate-to-severe personal outrage with not only the woes of the direction of corporate money but also every personnel machination during both losses and wins, as well as the perceptions of those who do not march lock-step with those of the blessed high-definition viewers…Though I suppose that is a topic for another day.

Posted by George Malik from South Lyon, MI on 12/10/13 at 12:37 AM ET

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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.