The Malik Report
by George Malik on 09/05/13 at 09:00 AM ET
This should be...Interesting. According to the Detroit News's Louis Aguilar, Detroit's City Council has decided to hold a public hearing regarding the public funding portion of the Red Wings' next rink, and while the money involved comes from property taxes collected by the quasi-governmental Downtown Development Authority and the Detroit Economic Growth Corporation, and Aguilar notes that the particular revenue stream has been in place for over 20 years...
The stadium proposal won’t be affected by the bankruptcy filing because the deal is being run by Detroit’s Downtown Development Authority, an entity that is separate from the City of Detroit. The stadium project also will use tax dollars from a budget and revenue stream that is separate from the city’s general revenue fund, which is part of the bankruptcy case, supporters contend.
That assertion has been backed by Detroit Emergency Manager Kevyn Orr, who has been overseeing the city after being appointed in March by Snyder.
The city’s Downtown Development Authority plans to use $284.5 million in property taxes captured from within its 615-acre downtown district to support part of the bonds. The rest will be picked up by Olympia Development, the property development arm of Mike and Marian Ilitch’s $2 billion business empire that includes the Red Wings, Detroit Tigers and Little Caesars pizza chain.
The special tax capture has been in place for more than two decades and legally can’t be used for anything other than economic development.
As you can imagine with anything in the City of Detroit, the City Council seems intent upon stoking the controversial fire given that emergency manager Kevin Orr's presence makes the council all but powerless:
Today’s 10:55 a.m. hearing at the Coleman A. Young Municipal Center may gauge just how deep and broad opposition is toward the plan. The $650 million deal relies heavily on taxpayer support at a time when the city is seeking to offer creditors — including retired city workers — 10 cents on the dollar or less.
“Suddenly we have a project that is untouchable. Really?” said Edward McNeil, negotiator for the Detroit units of Michigan Council 25 of the American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO. “Pensions are being threatened, workers will lose their jobs, services are going to be cut, and yet the billionaire sports owner is protected. Really?”
McNeil said he’s having union attorneys look into how the stadium deal’s financing can be challenged in the city’s bankruptcy case. McNeil is part of a nine-member committee that represents retirees in the bankruptcy case.
According to Crain's Detroit Business's BIll Shea, the local news stations (i.e. WXYZ, WDIV, Fox 2) are going to stream it online:
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