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Crain’s Detroit Business’s Shea: Ilitches *could* break ground on new rink during 2013

Given the economic mess that the City of Detroit is in, the continued corruption investigations facing Wayne County and the still-somewhat-tenuous economic status of the State of Michigan's ability to broker just about anything these days, I and probably you have been assuming that the Detroit Red Wings won't begin to build Joe Louis Arena's follow-on facility for another 4-6 years at the earliest.

Crain's Deroit busness' Bill Shea has been pretty busy dropping bombshells regarding the Red Wings' follow-on facility of late, resulting in an estimation of the follow-on rink's location from the Detroit News's Louis Aguilar...

And this evening, Shea's back at work, suggesting that the Red Wings will break ground on a new rink within the next year, and that the rink itself may take under two years to build, with the rest of the Ilitch Holdings/Olympia Entertainment-proposed retail, corporate and residential-use construction taking a little longer to complete at the location between Cass and Woowdward Avenues just north of I-75:

Construction is expected begin no later than autumn on a new downtown arena for the Detroit Red Wings, according to a sports economist who has done work for the team's owners and is familiar with their plans.

"I would hope that they would be able to get it in the ground by the fall," said Mark Rosentraub, a professor of sports management at the University of Michigan. "A lot of that depends on the infrastructure."

He's worked for the Ilitch family, which owns the Red Wings, as a consultant to create economic impact, jobs and tax estimates and models for the $650 million arena district project, he said. Rosentraub cautioned that he's had no contact with the Ilitches since early December, so he doesn't know if plans have changed.

Sandra van Meek, a spokeswoman for Ilitch-owned Olympia Development Co. that's overseeing the project, declined to comment. Driving the project's timeline and cost will be infrastructure needs, Rosentraub said.

"Most of the infrastructure is already there. You don't need new access to the freeways or widening the street," he said.

Until site testing is done, the real project cost won't be known.

"They'll be putting up a very heavy building," Rosentraub said, noting that arenas tend to have more runoff from rain and melted snow than office or residential buildings, which makes drainage infrastructure a key priority. "All of that is very dependent on the environmental engineering. You don't get the final price until you get into it," he said.

Rosentraub said the "best case" construction timeline is 20-22 months. That schedule would mean the Wings would play at Joe Louis Arena for two or three more seasons.

Rosentraub also estimates that the rink may cost about $325 million to build, which seems pretty low given that similar rinks have cost over $350 million...

And what's really interesting about this story is that, via RedWingsFeed, the Free Press's John Gallagher happened to offer a substantial amount of information regarding who might own the rink, what the sources of the facility's costs might be and how the non-"building a box" aspects of the mixed-use proposal's construction fare into the equation:

[W]whether a new downtown arena for the Detroit Red Wings would contribute more than it costs to build and operate remains an open question as negotiators for the Ilitch family, (owner of the team) and state and local officials continue to work on a plan for an arena.

On Sunday, George Jackson, president of the Detroit Economic Growth Corp. and the city’s chief negotiator for such a deal, said nothing has been settled although the parties continue to explore what an agreement might look like. “There’s no development agreement” yet, he said.

There has also been some speculation that a new arena complex could serve as the anchor of a larger $650 million special entertainment district and special tax zone that would promote ancillary development and essentially fill in the swath between downtown and Midtown with spin off business. Officials have suggested that such a district including a new arena for the Red Wings, if built, would be located in a largely vacant area behind the Fox Theatre and to the north, west of Woodward Avenue.

But given the estimated $650 million price tag, there already has been a spirited debate over whether some government entity – the Michigan Strategic Fund at the state level or the Downtown Development Authority at the city level – should draw funds away from other potential uses to back a new complex.

There has also been some speculation that a new arena complex could serve as the anchor of a larger special entertainment district and special tax zone that would promote ancillary development and essentially fill in the swath between downtown and Midtown with spin off business.

The Ilitches’ Olympia Development arm suggested in mid-December that the family would contribute part of the cost. The district, while anchored by a new arena, would also include housing, retail and entertainment venues. of a massive $650 million mixed-use district anchored by a new arena but also including housing, retail, and entertainment venues.

The questions left unanswered and still up for discussion, according to sources, include location, boundaries of any special district, mode of financing and ultimate ownership of the complex

Eric Larson, a real estate professional and the non-executive president of Olympia Development, said Sunday the mechanism for financing the project and other details are still in the exploratory phase. th the talks are still in the exploratory phase.

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Comments

LivinLaVidaLockout's avatar

Alright, bets on which happens first: New Wings arena or someone buys the Coyotes?

Posted by LivinLaVidaLockout on 02/04/13 at 11:20 AM ET

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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.