The Malik Report
by George Malik on 06/23/13 at 11:00 AM ET
When getting down to brass tacks regarding the details surrounding and sources of funding for the Red Wings' follow-on rink and real estate development in sum--there's a 56%-private-funds-44%-public-ones split--the most controversial part of the dollar picture came at the beginning, when the State of Michigan legislature approved the diversion of $12.8 million in taxes collected by the Downtown Development Authority to fund the project.
Now the whole, "This money is coming from schools and children!" line was BS from the start, and Crain's Detroit Business's Bill Shea (who's been following the scuttlebutt surrounding Joe Louis Arena's follow-on facility for over half a decade now) confirms that fact, but he also reveals that the biggest public contributors to the rink will in fact be downtown businesses like General Motors, DTE Energy, downtown casinos, Quicken Loans and, well, Compuware:
General Motors Co. and other downtown corporations will be the chief funders via their property taxes of the public portion of the $650 million Detroit Red Wings arena and entertainment district under a plan announced last week.
Detroit's Downtown Development Authority intends to use $284.5 million in property taxes captured within its 615-acre downtown district to pay off bonds issued by the state to build the 18,000-seat arena at Woodward Avenue and I-75.
GM has the largest taxable value within that district, and it and other corporations, along with small- and medium-sized property owners, will foot some of the arena's bill through property taxes.
The remainder of the arena costs, or $365.5 million, will be picked up by Olympia Development of Michigan, the property development arm of Mike and Marian Ilitch's $2 billion Detroit business empire that includes the Red Wings, Detroit Tigers and Little Caesars pizza chain.
The Michigan Strategic Fund will issue 30-year bonds to cover the public portion of the arena's construction costs.
That's just the introduction to a really fascinating article breaking down where the financial trail leads and how it breaks down. And Shea writes in such a manner that those of us without financial degrees can understand how things work.
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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.