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Legislation to assist Ilitches in building follow-on rink may be scuttled in Lansing

Sigh. Via Paul, per the Detroit News's Chad Livengood, Michigan Governor Rick Snyder's decision to back a controversial "right-to-work" bill has officially yielded the end of bipartisan legislation in the Michigan legislature, and I guess we shouldn't be surprised that the Ilitches' attempts to build a follow-on rink to Joe Louis Arena may be hitting a legislative dead end as a retaliatory measure:

Minority Leader Rich Hammel said his caucus plans to vote "no" on a bill that would allow Olympia Development to tap nearly $13 million in downtown development authority tax funds for a proposed $650 million mixed-use district comprising a multipurpose events center along with retail, office and residential housing space.

"They will vote 'no' on the Ilitch project," said Hammel, D-Mount Morris Township. "From our perspective, I think it's important that we stand together united — and we will."

House Speaker Pro Tem John Walsh, the bill's sponsor, said Saturday he was trying to secure more Republican votes for House Bill 5463 over the weekend. Republicans control 64 of the House's 110 seats — a majority set to decline to 59 votes next year — in the lame duck session that leaders hope to end Thursday.

"The Dems have indicated they're going to vote no on everything and we're going to have to work hard to get (more Republican) votes," said Walsh, R-Livonia.

But it's a difficult sell with some conservative Republicans who oppose taxpayer support of private development, Walsh said.

"We have some people who simply believe that no public money should be used for any private sector project," he said.

Is there any sense to this? Why yes, there are senisble legislators in the State House and Senate...They're just very, very hard to find:

Rep. Tim Greimel, the House minority leader-elect, said the Ilitch legislation needs more vetting and should be delayed until early next year.

"It's a big deal when people are asked to devote taxpayer money to a private development," said Greimel, D-Auburn Hills. "For them to try to rush this through lame duck is every bit as unacceptable as any of the others policy issues they're trying to run through lame duck."

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I don’t get it.  If the bill gets voted down now it’s not like it’s dead for all time, right? 

Once whoever’s throwing the latest legislative hissy fit gets over it the government will go back to doing what it always does: spending money.

Posted by HockeyinHD on 12/10/12 at 04:01 PM ET

J.J. from Kansas's avatar

Minority Leader Rich Hammel said his caucus plans to vote “no” on a bill that would allow Olympia Development to tap nearly $13 million in downtown development authority tax funds for a proposed $650 million mixed-use district comprising a multipurpose events center along with retail, office and residential housing space.

Somebody please correct me if the math is wrong here, but $13M is not half of $650M, is it?

Why, it’s less than the $15M the Penguins got for the Consol, right?

Posted by J.J. from Kansas on 12/10/12 at 04:12 PM ET

George Malik's avatar

Generally speaking, if a “lame duck” legislature tries to push a bill through the state legislature, and it’s defeated, the bill can be considered “dead,” and as enough democrats were elected that the state house will now be democratically controlled, any attempts to revive the bill if it is not in fact pushed back until after the new year would probably meet so much opposition that it would have no chance in hell of passing.

And it should be noted that the Downtown Development Authority *already* collects this money. This vote is about allocating the funds toward certain projects, not imposing a new tax upon anyone.

Posted by George Malik from South Lyon, MI on 12/10/12 at 04:14 PM ET

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Somebody please correct me if the math is wrong here, but $13M is not half of $650M, is it?

Why, it’s less than the $15M the Penguins got for the Consol, right?

Those are installment tax funds, JJ.  It’s not 13 M total, it’s 13 M at regular intervals during development and construction up to whatever mysterious point they are agreed upon to stop.

Posted by HockeyinHD on 12/10/12 at 04:14 PM ET

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Generally speaking, if a “lame duck” legislature tries to push a bill through the state legislature, and it’s defeated, the bill can be considered “dead,” and as enough democrats were elected that the state house will now be democratically controlled, any attempts to revive the bill if it is not in fact pushed back until after the new year would probably meet so much opposition that it would have no chance in hell of passing.

Um, 59 is still more than half of 110, George.

And it should be noted that the Downtown Development Authority *already* collects this money. This vote is about allocating the funds toward certain projects, not imposing a new tax upon anyone.

Excellent.  So, what happens to all the other projects, then?  Are they no longer funded or are they going to show up somewhere else… like, say, as a tax to pay for school development because all the money was spent on a sports arena… and how can you evil people vote against better schools? smile

 

Posted by HockeyinHD on 12/10/12 at 04:17 PM ET

George Malik's avatar

As you probably know, the legislature may not tackle the emergency education authority bill at all for the sake of pushing right to work through to the governor’s desk instead. That speaks for itself regarding “voting for bad schools.”

Posted by George Malik from South Lyon, MI on 12/10/12 at 04:20 PM ET

J.J. from Kansas's avatar

Those are installment tax funds, JJ.  It’s not 13 M total, it’s 13 M at regular intervals during development and construction up to whatever mysterious point they are agreed upon to stop.

Yep, just reading up on that.  So if the arena takes 27 years to build, it will be half-funded by tax dollars from a development authority created solely for the purpose of doing things like getting this arena and surrounding area built.

Posted by J.J. from Kansas on 12/10/12 at 04:22 PM ET

J.J. from Kansas's avatar

From what I’m reading, the $13M that the bill would have earmarked for downtown development is currently going to the Michigan House and they’re basically raiding a fund earmarked for a specific purpose to make up budget shortfalls elsewhere (and they’re saying it’s going to schools specifically for that “WON’T SOMEBODY PLEASE THINK OF THE CHILDREN!” mentality).

Posted by J.J. from Kansas on 12/10/12 at 04:24 PM ET

George Malik's avatar

Regarding the legislative majority, I should have offered a little more nuanced answer: between the increased number of democrats in the state legislature and the number of republicans who are more than happy to vote against anything that involves subsidization of anyone, the dems feel that they could very well defeat the bill if they choose to put up a fight in January, thus the promise to hose the bill should the republicans attempt to ramrod it through and bring it up again if it doesn’t pass.

Posted by George Malik from South Lyon, MI on 12/10/12 at 04:29 PM ET

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Yep, just reading up on that.  So if the arena takes 27 years to build,

When are those funds collected?  Yearly, bi-annually?  Is that the only source of funds Illtch is pursuing?

When I read the stuff on DDAs I don’t see anything which implies a specific limit to the amount collected under the DDA.  I see a millage limit, but not limits on revenue bonds or whatnot.

tax dollars from a development authority created solely for the purpose of doing things like getting this arena and surrounding area built.

“A community can capture property taxes which would have been paid to entities such as the library, community college and county, and instead use them for public improvements in targeted areas”

http://www.michiganadvantage.org/cm/Files/Fact-Sheets/DowntownDevelopmentAuthority.pdf

So, property taxes which were voted on and passed as millage agreements for one thing can be redirected for another.

Which, obviously, creates a funding shortfall in the entity whose millages are being diverted.

Which, also obviously, will lead in fairly short order to new millages being proposed or existing ones being increased in order to fund both the original intent of the millage and the secondary intent it was diverted to.

I mean, hey… I don’t pay either Detroit or Wayne County taxes so those morons can do whatever they want with their taxes.  Good for them.

I’ll just prepare myself to chuckle when the next tax initiative slides on though and people wail about how their Libraries are closing and WCCC can’t make ends meet so they have to cut back evening classes or whatnot.  Unless, that is, you citizens who are human beings and care about people will just agree to letting us jack up your mills by 1 or 2.  Just this once.  Promise, we won;t ever ask for more.

Regarding the legislative majority, I should have offered a little more nuanced answer:

George, you said “and as enough democrats were elected that the state house will now be democratically controlled”.  That’s not a statement which requires ‘nuance’.  It was a statement which was wrong on it’s face.

It’s no biggie, but c’mon.

 

Posted by HockeyinHD on 12/10/12 at 05:24 PM ET

George Malik's avatar

I done got it wrong. Sorry.

Posted by George Malik from South Lyon, MI on 12/10/12 at 05:33 PM ET

J.J. from Kansas's avatar

Is that the only source of funds Illtch is pursuing?

Nobody has released any information about him asking for funds from any other public sources.  As it is with projects like this, things could change, but I’m going to assume that reporters in Michigan and elsewhere are digging for whatever information they can find that will let them break the story that Ilitch is secretly asking for 20 times what has so far been reported.

I’ll just prepare myself to chuckle when the next tax initiative slides on though and people wail about how their Libraries are closing and WCCC can’t make ends meet so they have to cut back evening classes or whatnot.  Unless, that is, you citizens who are human beings and care about people will just agree to letting us jack up your mills by 1 or 2.  Just this once.  Promise, we won;t ever ask for more.

Right. So the people actually affected by this get to get together and decide to what extent they would like to be affected.

Posted by J.J. from Kansas on 12/10/12 at 05:37 PM ET

Red Winger's avatar

Right. So the people actually affected by this get to get together and decide to what extent they would like to be affected.

Right, just like when certain workers could choose if they wanted to be in a union or not…

...errr, wait ...

Posted by Red Winger from Sault Ste Marie on 12/10/12 at 06:18 PM ET

J.J. from Kansas's avatar

Gosh yes. That is exactly the same thing and every bad decision that’s ever been made in the history of American politics is going to come to bear on this one because rabblerabblerabble.

Posted by J.J. from Kansas on 12/10/12 at 06:31 PM ET

Red Winger's avatar

JJ caught in a catch-22 again ...priceless smile

Posted by Red Winger from Sault Ste Marie on 12/10/12 at 06:42 PM ET

J.J. from Kansas's avatar

What catch-22? They’re not the same thing.

Posted by J.J. from Kansas on 12/10/12 at 06:44 PM ET

OlderThanChelios's avatar

“They will vote ‘no’ on the Ilitch project,” said Hammel, D-Mount Morris Township. “From our perspective, I think it’s important that we stand together united — and we will.”

So the Democrats are going to take a stand and defeat a bill that would bring a new arena and probably hundreds of new jobs to Detroit. Brilliant. When it comes to politicians, logic is a completely foreign concept.

Posted by OlderThanChelios from Grand Rapids, MI on 12/10/12 at 07:31 PM ET

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Nobody has released any information about him asking for funds from any other public sources.  As it is with projects like this, things could change, but I’m going to assume that reporters in Michigan and elsewhere are digging for whatever information they can find that will let them break the story that Ilitch is secretly asking for 20 times what has so far been reported. 

Dude, if you think Illtch isn’t going to get at least as much public float as he did for Comerica… wow.

I mean, come on.  There’s a certain amount of plausible credulity one can safely possess in life, and there’s a level that requires constant adult supervision.\

That freaking guy is not going to drop 637 million dollars on an arena.  He’s not dropping 500 mil on it.  He may, perhaps, possibly spend 400 mil on it.  That’s an absolute max.

Comerica cost less than half as much (300 mil back in 2000) and Illtch still only paid 185 mil of it..  If he contributes at the same percentage, we’re talking about 401.85 mil.

Illtch (or whoever is calling the shots now) isn’t an idiot.  He’s not going to spend money he doesn’t have to just to be a cool guy, and especially not on the magnitude of 9 figures worth of it, if he can get a gullible city to throw their city a bit further into bankruptcy for it.

After all, it’s going to be a big help to the city, right?  Suckers!

Right. So the people actually affected by this get to get together and decide to what extent they would like to be affected.

How’s that been working for them, anyway?

Anyway, this will all be a wonderful note when the next Emergency Manager blows up all the labor deals and people in Detroit are screaming about being disenfranchised.

Posted by HockeyinHD on 12/10/12 at 07:41 PM ET

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So the Democrats are going to take a stand and defeat a bill that would bring a new arena and probably hundreds of new jobs to Detroit. Brilliant. When it comes to politicians, logic is a completely foreign concept.

And hoo boy aren’t we going to have a wonderful 4 years having that exact fact rubbed in our faces.

The vast amounts of schadenfreude I am going to be ingesting may break the meter.

Posted by HockeyinHD on 12/10/12 at 07:43 PM ET

HockeytownOverhaul's avatar

So tired of politics and labor strife just excentuates this polarization with hockey fans and it’s a conversation that we shouldn’t even be giving a shit about right now.  We should be talking about Wings rookies competing for the Calder and Brunner’s seamless transition to NA ice and Pav and Z’s resurgence as dominate shutdown/scoring lines in the NHL and how our D played above their head and Kronwalls stepping out from St. Nicks shadow…


instead we get to argue about bullshit taxes and politics that we watch hockey to FORGET about.

Posted by HockeytownOverhaul on 12/10/12 at 07:46 PM ET

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We should be talking about Wings rookies

I made it a point to get familiar with the Michigan players this year because I was going to dial in on them and get my hockey fix there.

Did not pick a good year for that decision.

Anyone up for an online NHL 13 league? smile

Posted by HockeyinHD on 12/10/12 at 08:09 PM ET

J.J. from Kansas's avatar

That freaking guy is not going to drop 637 million dollars on an arena.  He’s not dropping 500 mil on it.  He may, perhaps, possibly spend 400 mil on it.  That’s an absolute max.

Comerica cost less than half as much (300 mil back in 2000) and Illtch still only paid 185 mil of it..  If he contributes at the same percentage, we’re talking about 401.85 mil.

Illtch (or whoever is calling the shots now) isn’t an idiot.  He’s not going to spend money he doesn’t have to just to be a cool guy, and especially not on the magnitude of 9 figures worth of it, if he can get a gullible city to throw their city a bit further into bankruptcy for it.

2000 may as well have been an eon ago as far as Detroit and finance works.

Ilitch being not stupid could very well work out to mean he’s smart enough to figure how much he can get away asking for from a bankrupt city.  It could mean he’s smart enough to gamble on getting the federal government to fall for directly or indirectly helping fund the development.

It could mean a bevy of private financiers could be talked into helping.

All I’m saying is that I’ll actually wait for those details to happen before passing judgment on them.

Posted by J.J. from Kansas on 12/10/12 at 08:56 PM ET

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I love the irony. When the city of Glendale proposes to spend 300 million on a hockey deal, oh the outrage.  How dare they subsidize hockey in a “wasteland”. Now Papa Illitch has his hand out to the tune of 300 million in downtown Detroit and the love flows. Other than HD who is consistent in his disgust.  I love it!!!

Posted by timbits on 12/10/12 at 10:16 PM ET

George Malik's avatar

Seems to me that the rink in Glendale will continue bleeding taxpayer-subsidized money, whereas the rink in Detroit will actually make money and end up adding revenues to the City of Detroit, Wayne County and the State of Michigan’s coffers.

As JJ says, this is all so incredibly “exploratory” at this point that nobody knows how things will or won’t work, other than the concept that the DDR would be diverting taxes already collected toward the Ilitch project. There are no public concept photos, blueprints or any sort of a proposal other than, “We could use this money for this development we’re serious about eventually breaking ground on,” and enough support developing for said potential development that it was going to pass because the words “Ilitch” and “Red Wings” were attached to the reallocation.

I’m a little more concerned about the elimination of the personal property tax for businesses taking money away from schools, public services, etc., and given the legal clusterf*** and/or death spiral that the dance between Detroit’s City Council and Mayor’s Office have locked themselves and the rest of the city into, who the hell knows what’s going to happen when Andy Dillon takes over.

Posted by George Malik from South Lyon, MI on 12/10/12 at 10:51 PM ET

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Seems to me that the rink in Glendale will continue bleeding taxpayer-subsidized money,

And a new mall in downtown Detroit is going to make millions?

Posted by timbits on 12/10/12 at 11:02 PM ET

J.J. from Kansas's avatar

Somebody’s complex is showing.

Posted by J.J. from Kansas on 12/10/12 at 11:10 PM ET

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Somebody’s complex is showing.

What, in calling you out for your inconsistent views on hockey team subsidies?

Posted by timbits on 12/10/12 at 11:33 PM ET

J.J. from Kansas's avatar

Anything is true if you lie hard enough!

Posted by J.J. from Kansas on 12/11/12 at 12:00 AM ET

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Anything is true if you lie hard enough!

You can say what you want about my opinions, but calling me a liar is not one of them. So go *#$%@& yourself!

Posted by timbits on 12/11/12 at 12:26 AM ET

George Malik's avatar

Despite the attempts of some of you to skirt the rules regarding personal insults while trolling the *#$%@& out of the comments sections of recent articles, your comments have been noted and it is highly likely that any further personal attacks will no longer be tolerated.

This is cute and all, but certain KK members have made a profession out of the trolling business, and either you let up on it or your asses will be banned. Very happily in some cases.

Posted by George Malik from South Lyon, MI on 12/11/12 at 12:35 AM ET

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All I’m saying is that I’ll actually wait for those details to happen before passing judgment on them.

C and C that with your position on the lockout. wink

Seems to me that the rink in Glendale will continue bleeding taxpayer-subsidized money, whereas the rink in Detroit will actually make money and end up adding revenues to the City of Detroit, Wayne County and the State of Michigan’s coffers.

Of course it will add revenues, George.  That’s obvious.  The question is whether the added revenues will be sufficient to offset the cost in construction, tax abatements, and other costs the City may float Illtch to build the damn thing.

For instance, if the City ‘only’ floats 200 mil of the construction via DDA and other sundry shenanigans, how much revenue at the city tax rate of 2.5% resident, 1.25% non resident and 1% corporate would have to be generated just to break even on the investment?

Well, if we assume that every single dollar of revenue is taxed at the highest rate, the one for residents… oh, just EIGHT BILLION DOLLARS.

If we assume some combination of those rates to take the average taxable rate down to, say, 1.75%... oh, just ELEVEN AND A HALF BILLION DOLLARS.

And that’s just to break even on the City loans, George.  Between 8 and 11.4ish BILLION DOLLARS in revenue.

All three casinos combined in 2010 generated just over 1.3 B in receipts, IIRC.  We’re talking about a positively titanic amount of activity needed to just get back to 0.

Posted by HockeyinHD on 12/11/12 at 06:33 AM ET

J.J. from Kansas's avatar

You can say what you want about my opinions, but calling me a liar is not one of them. So go *#$%@& yourself!

Posted by timbits on 12/11/12 at 12:26 AM ET

Cry me a river, troll.

The parallel you’ve drawn in these situations (asking for $300M) is false. The article above and the comments which follow specifically show that. Either you’re not smart enough to know that or you don’t care.  I’m giving you credit for being smart, which makes you a liar.

Combine that with some sort of wildly speculative position on what I feel about the Phoenix situation, which is actually “I think the market is ruined but Glendale residents are free to do whatever they want with their tax money.”  In that situation, I’m sure that you’re not so obsessed with me as to really care about separating my comments from the overall feel of everybody you think is your opponent on this matter, so I don’t necessarily think you’re lying about what position you’re putting me in on the issue, I just think you’re wrong.

It’s just that the two situations are like comparing apples to firetrucks. The only thing they share is that they’re both red.

Posted by HockeyinHD on 12/11/12 at 06:33 AM ET

That’s a lot of math for a made-up number.  Not to mention an unspoken assumption that cities should apparently work like the world’s worst real-estate development companies.

Posted by J.J. from Kansas on 12/11/12 at 08:02 AM ET

MsRedWinger's avatar

Sigh…

Posted by MsRedWinger from Flori-duh on 12/11/12 at 08:49 AM ET

Paul's avatar

Please ease up with the name calling.  Calling someone out because of their opinion is fine, name calling is not.

Use the IGNORE feature if need be. Go to Your Profile, then under Utilities, Manage Ignore list.

Really, there should be no name calling and if two or more members want to get in a discussion with name calling, etc., use the PM feature where you can also block other members.

Thanks.

Posted by Paul from Motown Area on 12/11/12 at 09:44 AM ET

redxblack's avatar

I wanted to correct a misconception from something Red Winger posted. There is no forced unionism. The Taft-Hartley Act banned that practice in 1947. What the act did not change was the Wagner Act’s charge that anyone covered by a collective bargaining unit had to receive full coverage from the union, regardless of whether that person was in the union or not. What that means is that a so-called “right to work” means that a person can elect to not pay for services that must be rendered onto that person, as required by federal law. This essentially puts the union in a position where it must work for free or face criminal sanctions under US Labor Law. There is a case pending in Indiana that such a law requiring someone to work without compensation violates their state constitution’s ban prohibiting uncompensated commercial work.


Please forgive the tangent, but I couldn’t let that pass unchallenged.

Posted by redxblack from Akron Ohio on 12/11/12 at 10:28 AM ET

OlderThanChelios's avatar

Use the IGNORE feature if need be. Go to Your Profile, then under Utilities, Manage Ignore list.

That is a great feature, Paul. But it would be even better if that person’s comment wasn’t replaced with a “You’ve chosen to ignore this person” note. It kind of defeats the pupose of “ignoring” someone.

Posted by OlderThanChelios from Grand Rapids, MI on 12/11/12 at 10:58 AM ET

Avatar

It kind of defeats the pupose of “ignoring” someone.

But it does mean you don’t have to scroll as far down to read all of the other comments.

Posted by hockey1919 from mid-atlantic on 12/11/12 at 11:04 AM ET

Paul's avatar

Use the IGNORE feature if need be. Go to Your Profile, then under Utilities, Manage Ignore list.

That is a great feature, Paul. But it would be even better if that person’s comment wasn’t replaced with a “You’ve chosen to ignore this person” note. It kind of defeats the pupose of “ignoring” someone.

Posted by OlderThanChelios from Grand Rapids, MI on 12/11/12 at 10:58 AM ET

Would you rather have nothing, like a comment was never made by the ignored person?

Give me some ideas and I can see what can be done.

Posted by Paul from Motown Area on 12/11/12 at 11:24 AM ET

J.J. from Kansas's avatar

I like how the “You have chosen to ignore this person” note works. Without it, those who choose to respond look like they’re pulling quotes out of nowhere.

My suggested change would be that if enough people ignore a commenter, their comments show up as ignored by default for all new and nonregistered readers.

Posted by J.J. from Kansas on 12/11/12 at 11:49 AM ET

MsRedWinger's avatar

Thank you for the Ignore feature, Paul.  I think it’s good as is. Without the indication that an Ignored member had commented, the rest would be awfully confusing.

Posted by MsRedWinger from Flori-duh on 12/11/12 at 11:49 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.