The Malik Report
by George Malik on 06/19/13 at 08:07 PM ET
Amongst this evening's Red Wings-related news stories:
Let's just say that the following Tweets make the Red Wings' locking up of Pavel Datsyuk over the long haul seem even more important going forward:
If you missed this afternoon's news that Ilitch Holdings will essentially be utilizing all of the vacant land behind the Fox Theatre, as well as a huge chunk of the Cass Corridor, to build a new 18,000-seat rink and another $200 million worth of "mixed-use" development, we'll start at the beginning, with the Detroit Economic Growth Corporation's press release regarding their approval of the Ilitches' plan, per WXYZ:
The Detroit Downtown Development Authority (DDA) has approved a memorandum of understanding (MOU) among the DDA, Olympia Development of Michigan (ODM) and Wayne County that describes the proposed public and private financing and location for a new sports and entertainment district Downtown.
The district would include a $450 million sports and entertainment center and $200 million in new residential, retail and office development in an approximately 45-block area that generally reaches from Grand Circus Park to Charlotte St. between Woodward Ave. and Grand River Ave.
The multipurpose event center is anticipated to be an approximately 650,000 sq. ft. facility with 18,000 seats that can accommodate Red Wings hockey games, as well as other sports and entertainment events year-round. It will also include premium seating and amenities of a contemporary first-class professional sports and entertainment complex.
The new district anticipates expanding the boundaries of the DDA several blocks north of I-75 and west of Woodward Ave. to accommodate the center, redeveloping several properties, building new parking decks and mixed-use developments.
The new development is anticipated to create approximately 5,500 jobs for the events center alone and approximately 8,300 jobs for the entire residential and commercial mixed-use district. Michigan can anticipate an estimated economic impact of $1.8 billion from the completion of this project.
“We have outlined a deal that will do far more than build new home ice for the Red Wings. When it’s done, it will redefine Detroit’s Downtown. We will have incorporated all three of our major league sports venues into an exciting, walkable sports and entertainment district that will rival anything in the world,” said George W. Jackson, Jr., president and CEO of Detroit Economic Growth Corporation, which managed negotiations on behalf of the DDA. “A project of this scale requires strong commitments from both private and public partners, and that’s exactly what this agreement represents.”
Other projects that could be part of the $200 million additional development named in the MOU include:
- A 140,000 sq. ft. new mixed office and retail development on Woodward at Sproat St.
- A 25,000 sq. ft. office and retail development along Woodward
- Several parking structures with a total of 25,000 sq. ft. of retail
- Renovation of the Detroit Life Building at 2210 Park Ave. for 3,645 sq. ft. of retail and 35 residential units
- Renovation of the Blenheim Building at 81 W. Columbia St. for 1,833 sq. ft. of retail and 16 residential units
- Renovation of the building at 1922 Cass for 70,000 sq. ft. of office space
- A new hotel-retail development with a 20,000 sq. ft. ground floor
- Parking lots and other amenities
The primary public funding mechanism for the $450 million center is a continuation of a projected $12.8 million-per-year property tax capture authorized by the State Legislature last December. The DDA is also expected to contribute an average of just over $2 million per year. Olympia Development is expected to contribute $11.5 million per year. All three of those commitments would be used to retire 30-year private activity bonds issued through the Michigan Strategic Fund.
Additional private sources are expected to fund the remainder of the $650 million total investment anticipated for the entire district. Overall, approximately 56 percent of the total development costs of the district would be privately funded and approximately 44 percent would come from public economic development funds requiring no new taxes.
The DDA would own the events center and Olympia Development would manage it under a long-term contract. Before that concession management agreement (CMA) can be finalized, the City of Detroit has to approve the expansion of the DDA boundaries and other matters related to the development. The Economic Development Corporation of the City of Detroit has to review and amend plans for the area and transfer property it owns. Wayne County, the State of Michigan Strategic Fund and others also have to approve aspects of the development plan before construction can begin.
Jackson added, “Today’s agreement represents one step among many that all the partners have to take together, but it is a very significant step.”
The city’s DDA would own the arena and Olympia Development would operate and maintain it, much as the Ilitch organization currently operates Joe Louis Arena for the city. Once built, the new arena, as yet unnamed, would leave the older Joe without an anchor tenant, but no decisions have been made about what to do with the aging riverfront structure.
Red Wings general manager Ken Holland did not want to say much about the project Wednesday other than to note it was good news. “It’s a positive step in a process. But as I’ve learned over the years in negotiations, everything is a process.”
Private money would pay for about 56% of the total cost of the new project, with 44% coming from public sources, mainly from continuation of a $12.8-million-a-year property tax “capture” authorized by the state legislature last year. The DDA would contribute about $2 million a year. Olympia Development is expected to contribute $11.5 million per year.
All three of those sources would be used to pay off 30-year bonds issued through the Michigan Strategic Fund. The city of Detroit and Wayne County general funds would not be used for the project.
The deal is tentative and what officials called a “framework” for a final agreement. Multiple steps have to be concluded before the deal is final. Jackson said he hoped to have a final agreement signed by the end of this year.
Jackson made no secret of his hopes that eventually the Detroit Pistons team, which has played in the Palace of Auburn Hills for two decades, might one day agree to share the new arena with the Red Wings. Noting that downtown already has three major league teams in the Red Wings, Tigers, and Lions, “We would like to have a fourth, obviously.” But he said no discussions have taken place with the Pistons about moving.
Construction would typically take about two years after a formal agreement is signed.
As did the Detroit News's Louis Aguilar...
“I’d like it completed by tomorrow,” said George Jackson, president of the Detroit Economic Growth Corp., responding to media questions on the development’s timetable.
Jackson said he hopes to wrap up negotiations by the end of the year so that construction can begin on the project, which he called an “incomplete portrait” at this point but will have an “urban look” with an “urban feel.”
“This is definitely a dynamic process,” Jackson said Wednesday.
More details emerged following a special board meeting of the Downtown Development Authority Wednesday. The News already has reported that the DDA is considering making an annual grant of nearly $13 million for the project.
Under the concept proposed by Ilitch Holdings, the new hockey arena, or multipurpose events center, would anchor a 35-acre downtown district featuring sports, entertainment, stores and housing near the Ilitch family’s company headquarters in the restored Fox Theatre on Woodward Avenue and nearby Comerica Park, the home built for Mike Ilitch’s Detroit Tigers.
“I’m extremely pleased that a framework has been established for the development of a new downtown arena and a commercial, entertainment and residential district that will continue to add momentum to the transformation of our city,” Mayor Dave Bing said in a statement.
On Wednesday, the DEGC announced it approved a memorandum of understanding with Olympia Development of Michigan and Wayne County that “describes the proposed public and private financing and location for a new sports and entertainment district Downtown.”
According to the DEGC, the district includes a $450 million sports and entertainment center and $200 million in new residential, retail and office development in an approximately 45-block area that generally reaches from Grand Circus Park to Charlotte Street between Woodward and Grand River avenues.
And MLive's David Muller...
The project was first revealed near the end of last year when Red Wings owner Mike Ilitch's Ilitch Holdings said that that the development hinged on passage of state legislation that allows for use of DDA funds. That legislation passed in December, indicating plans could move forward.
The state legislation allows Detroit's DDA to collect up to $15 million a year for the project. According to the DEGC, the primary public funding mechanism for the project will be about $12.8 million per year in property taxes captured. The DDA will contribute another $2 million each year, and OIympia Development will pay another $11.5 million annually. Together, those three commitments will be used to retire 30-year bonds through the Michigan Strategic Fund.
DDA spokesman Bob Rossbach said the next step for the DDA would be to vote to approve its coverage area north of Grand Circus park, thus encompassing the project's footprint.
Several parcels in its footprint have changed hands recently, and Jackson said the area is now a mix of private and city-owned land. On several occasions, there was heavy speculation that Ilitch and co. were buying many of the parcels, such as when the residents of three low-income apartment buildings were suddenly told this Spring that a new owner had purchased the properties and they would have to move out within two months.
According to the DEGC, which staffs the DDA, the new development is anticipated to create roughly 5,500 jobs for the arena alone, and about 8,300 jobs for the entire mixed-use district. The DEGC says the it will have a statewide economic impact of $1.8 billion.
The timeline for the actual project to be complete is still a ways off, with Rossbach saying that 2016 or 2017 would be an aggressive finishing point. Jackson said that if the project were a football field, it would now be close to the 50-yard line, "but when you get in the red zone you never know what will happen."
And the Windsor Star's Dave Waddell noted that there's more than a rink involved here:
The rink would be located on the west side of Woodward Avenue, just north of where it crosses over I-75. The entire district will cover 45 acres.
DDA officials said a final agreement is expected to be worked out by the end of the year allowing for construction to begin after that. It’s estimated the project will take about four years to complete if things progress smoothly.
Ilitch Holdings already owns much of the property needed for the plan. The city will transfer to ODM any lands it holds for the project.
“There has been tremendous progress made throughout Detroit over the last decade,” said Christopher Ilitch, president and CEO of Ilitch Holdings. “The location of the events centre district will not only help to rebuild this neighbourhood, but will also serve as a vital connector bringing together the many efforts completed or underway from the riverfront to midtown and beyond.”
The centrepiece of the project will be a $450-million multi-use arena that covers 650,000 square feet.
The arena and attached parking structure will be owned by the DDA, but the Wings will lease the facility, manage and maintain it similar to the arrangement they now have with the City of Detroit to run Joe Louis Arena.
However, the plan calls for the arena to be part of an urban development that emphasizes walkable density similar to Columbus’s successful Arena District surrounding the Blue Jackets’ Nationwide Arena complex.
“This project will leverage more than $360 million in private investments, create thousands of new jobs, revitalize a significant area along Woodward Avenue,” said George Jackson Jr., president and CEO of the Detroit Economic Growth Corp. “(It’ll) concentrate Detroit’s major league sports and entertainment venues in a way that is unique among urban centres anywhere in the world.”
Crain's Detroit Business's Bill Shea discussed the fate of the Wings' current facility, and he tried to pry some comments from Ilitch Holdings' representatives...
The new arena will replace city-owned Joe Louis Arena. Jackson said it will be up to the city to decide the old arena's fate. It was built is 1979, and is widely considered within the sports industry to be vastly outdated and lacking in revenue-generating modern amenities craved by pro teams. Sports industry insiders have told Crain's that a new arena could generate $5 million to $8 million in new annual revenue for the Wings.
"Today, this public-private partnership took a significant step forward in laying the groundwork for a major catalyst development which will create approximately 8,300 jobs, stimulate economic activity and have a positive and lasting impact on our community," said Christopher Ilitch, president and CEO of Ilitch Holdings Inc., in a statement.
The Ilitch family owns the Red Wings, Olympia, the Detroit Tigers and the Detroit-based Little Caesars pizza chain. They have pledged $3 million toward the $137 million public-private Woodward Avenue streetcar line project that will run past the new Wings arena and the Tigers' Comerica Park, and other Ilitch-owned properties.
Project backers have estimated the arena construction will create 5,500 jobs and the project will generate $1.8 billion in economic activity for the city, region and state.
The Ilitches, who for years have said they want a new venue for the Red Wings to replace Joe Louis, announced plans in December for the $650 million office, residential and entertainment district anchored by a multi-use venue that would be the team's new home.
They did not disclose at the time any details about a location or how the district would be financed, other than to say the Ilitch organization will make a "substantial investment" in the project.
Today's announcement is unclear about how much Olympia specifically will invest, and how much could come from other private investors and developer.
The Ilitches have stated that their companies, with Little Caesars as the backbone, generated more than $2.4 billion in revenue last year, but they haven't disclosed details. John Hahn, the Wing's vice president of communications, declined after the DDA meeting today to answer questions about the project.
Other suspected arena sites were the area near the Ilitch-owned Fox Theatre and between Grand River and Cass avenues south of I-75.
The Red Wings' ownership in May 2012 selected Dallas-based HKS Inc. as the arena architect, according to Sports Business Journal. The team and firm declined to confirm or deny the report. HKS will design the venue with Cambridge, Mass.-based architectural firm NBBJ, the sports industry trade magazine said.
And he added a trio of Tweets to the mix:
The Associated Press's report snagged a few more comments from the higher-ups...
"Today, this public-private partnership took a significant step forward in laying the groundwork for a major catalyst development, which will create approximately 8,300 jobs, stimulate economic activity and have a positive and lasting impact on our community," said Christopher Ilitch, son of Mike Ilitch and president and chief executive of Ilitch Holdings Inc., another family company.
"We're talking about jobs ... talking about enhancing the entertainment district. It's a win-win for everybody. The Ilitch family has been a very big supporter of Detroit and we agree that Joe Louis Arena is dated," Wayne County Executive Robert Ficano said, adding that county road funds may be used for some infrastructure work associated with the new stadium.
Mayor Dave Bing said in a statement that the project will "continue to add momentum to the transformation of the city." Detroit is experiencing economic activity in its downtown and Midtown neighbourhoods, but other parts of city are grabbling with tens of thousands of abandoned or vacant homes and businesses.
And, stating the obvious, the Free Press's Brian McCollum noted that a new facility would serve as a viable competitor to the Palace of Auburn Hills for concerts and other events:
For touring performers and their booking agents, a new Detroit arena could be a bright, shiny object that’s hard to resist.
The proposed 18,000-seat arena, conceived as the centerpiece of Woodward Avenue’s entertainment district, would be more than just a new home for the Detroit Red Wings. Officials are billing it as a multipurpose venue that would host concerts and entertainment events year-round.
Since talk of the proposed venue began percolating several years ago, concert industry experts have told the Free Press that a new arena will likely become an instant magnet for many acts as they sketch out Detroit tour stops.
That could have big implications for the Palace of Auburn Hills, which has reigned as the market’s top entertainment arena for a quarter century. The Palace may find itself facing the same scenario its own 1988 opening presented to Joe Louis Arena: the threat of a younger, fresher competitor across town.
The Palace typically hosts more than 40 concerts and other entertainment events annually, while Joe Louis usually stages about a dozen each year. Live Nation and AEG, the nation’s two biggest concert promoters, book tour dates in both venues.
Still, the Palace isn’t just any old arena: More than $100 million has been invested in renovations and upgrades through the years, first by late owner Bill Davidson and then by Tom Gores’ Platinum Equity Group, which purchased Palace Sports & Entertainment in 2011.
The company also owns DTE Energy Music Theatre, traditionally one of the country’s busiest summer concert venues.
The Palace and DTE “are well established as the premier arena and outdoor amphitheatre concert venues in the region,” Platinum partner Mark Barnhill wrote Wednesday in an e-mail to the Free Press. “We don't foresee anything changing that.
A new facility in downtown Detroit would definitely change that equation.
If you're interested, WDIV posted a fan-canvassing report, and WXYZ:
1. Flew over the arena area...
2. Talked to local businesspeople...
3. And filed a general report. An EIGHT MINUTE report:
Fox 2 posted a report as well:
In other news...
Regarding the Griffins, both coach Jeff Blashill...
And Griffins play-by-play announcer spoke with ESPN 96.1 FM's Sean Baligian:
The Rapidian's David Urban spoke to members of the Grand Rapids Griffins' booster club about the Griffins' capturing of the Calder Cup, and Michigan Hockey's Matt Gajtka spoke to the Michigan-born Griffins about their Calder Cup triumph:
The significance of the moment clearly wasn’t lost on 24-year-old rookie center Luke Glendening, who was born and raised in Grand Rapids before playing four years at the University of Michigan.
“This is special…I couldn’t be more proud,” Glendening said. “We’re happy to bring this title back to Grand Rapids. They support us so well.”
“We were so close in ‘GR,’” he said. “We shouldn’t have had to come back [to Syracuse], but here we are, and we won it.”
Defensemen Dan DeKeyser (Detroit) and Chad Billins (Marysville) were the other two Michiganders to lift the 77-year-old trophy at Onondaga County War Memorial Arena. Both played NCAA hockey in state, with DeKeyser just completing a successful three-year stay at Western Michigan and Billins 12 months removed from a four-year stint at Ferris State.
“It’s been pretty great to play close to home and Ferris,” said Billins, 24. The rookie pro provided offense from the blueline in the regular season (10 goals, 27 points) and the playoffs (12 assists, 14 points). A lot of friends and family came to games [in Grand Rapids] and some of them are here tonight.”
Home was also on the mind of first-year Griffins head coach Jeff Blashill. The 39-year-old Sault Ste. Marie native and former Ferris State goalie had his thoughts immediately drift west after his team claimed the prize.
“I couldn’t wait to call my wife and family,” Blashill said. “They’ve made a lot of sacrifices over the years.”
Gajtka also spoke to Jeff Hoggan about the possibility that the Griffins' captain may retire and long-serving Griffins assistant coach Jim Paek about the significance of the win.
Among the Griffins' Tweets from today:
In sort of "ancillary" news...
The Toledo Walleye will open their 2013-14 season on the road on Oct. 19 and the team's home opener is slated for Oct. 26.
The Walleye will play at Fort Wayne on Saturday, Oct. 19 to begin next season. Toledo then hosts Wheeling on Saturday, Oct. 26 to open the season at the Huntington Center.
The Walleye play just four games in the opening month of October with two scheduled at home. Toledo hosts Cincinnati for a special 10:35 a.m. game on Oct. 30.
Toledo plays five home games in November, including four straight from Nov. 3-15.
In the fan participation department, the Free Press's "best Michigan sports championship" bracket has reached its "sweet sixteen" segment, and Pavel Datsyuk's still up against Cody Hodgson in TSN's Play of the Year showdown;
Just as an FYI, IceThetics notes that the NHLPA's logo is going to change;
And we may as well go out with a bang, so let's do just that:
TSN's "Insiders" and ESPN's Pierre LeBrun report that Kris Letang's future in Pittsburgh is uncertain at best, and the Free Press's Helene St. James pondered whether Letang would be a "fit" for the Wings:
Letang is a year away from unrestricted free agency, but if general manager Ray Shero realizes he isn’t going to be able to extend Letang — who just finished as a finalist for the Norris trophy — Shero will trade Letang over losing him for nothing.
Could Letang be a fit for the Red Wings? Letang is a very talented player, and the Wings are in the market for a top-three defenseman, but there are two big issues to consider with regards to Letang: Cost to get him and cost to keep him.
Let’s take the latter first, because it’s what’s going to make moot figuring out the former. Look at what defensemen are going for in the NHL: Mark Streit, who like Letang is productive, but who is also 35, will be getting $5.25 million a year from the Philadelphia Flyers starting next season. Sergei Gonchar, who is 39, just got two years and $10 million from the Dallas Stars. The Wings liked Gonchar, but they would have topped out at a reasonable $3.5 million.
Letang just turned 26. He had 50 points in 82 games in 2010-11, 42 points in 51 games the following season, and 38 points in 35 games — better than a point a game, in other words — this past season. And he’s used to playing with hugely talented forwards who want the puck. Imagine Letang feeding Pavel Datsyuk and Henrik Zetterberg instead of Malkin and Crosby.
But Letang knows defensemen are at a premium, and if guys 10 years older are getting at least $5 million a season, a guy who is just entering his prime is going to want closer to $7 million. That would put Letang in Zetterberg and Datsyuk territory, and well above the Wings’ top defenseman, Niklas Kronwall.
The Wings have committed to their big-money guys already: Datsyuk, Zetterberg, Kronwall and Jimmy Howard. Letang would be a dreamy addition, but the cost to get him and to keep him is simply prohibitive.
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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.