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Original article URL: http://bridgemi.com/2014/04/public-shells-out-for-detroit-sports-stadiums/

Economy & competitive position

Public shells out for Detroit sports stadiums

At the major league level, sports stadiums get built with the help of millions in mean major public dollars, though the promise of economic benefit to the community can prove elusive. Some recent stadium deals in metro Detroit:

Pontiac Silverdome
Opened as home for the Detroit Lions in 1975 at cost of $55 million in public funds. Lions left for Ford Field in 2002 and deteriorating facility was sold at auction for $583,000 in 2009. Pontiac, under financial emergency, paid more than $1.5 million a year to maintain the roof and other expenses. An auction of stadium artifacts including seats and locker room equipment is scheduled for May.

Joe Louis Arena
After then-Detroit Red Wings owner Bruce Norris threatened a move to Pontiac from aging Olympia Stadium, the city of Detroit offered to build a downtown arena with public funds. The $58 million Joe Louis Arena opened in 1979. Norris paid nothing for facility.

Ford Field
Opened in in downtown Detroit in 2002 at a cost of $430 million. According to the National Sports Law Institute at Marquette University, 36 percent of that was publicly financed, including money from tourism excise taxes and $45 million from the Downtown Development Authority.

Proposed Red Wings arena
Nearly 60 percent of the $450 million facility just north of downtown Detroit is to be publicly financed with funds from school and local property tax revenue captured by Detroit’s Downtown Development Authority. The Detroit Economic Growth Corporation says the arena, along with an adjacent $200 million entertainment district, will generate more than 8,000 jobs and statewide economic impact of $1.8 billion. The state is to pay for any shortfall to Detroit’s per-pupil funding. Red Wings owner Mike Ilitch gets 100 percent of arena revenues, including money from naming rights. The Red Wings pay nothing for use of the arena.

Ted Roelofs worked for the Grand Rapids Press for 30 years, where he covered everything from politics to social services to military affairs. He has earned numerous awards, including for work in Albania during the 1999 Kosovo refugee crisis.

12 comments from Bridge readers.Add mine!

  1. Fiona Lowther

    This is a drop in the bucket to the money that Matty Moroun has taken from Detroit. When are people going to wait up and demand an accounting for the money Moroun takes from the Detroit Wayne County Port Authority Master Concession Agreement snuck through during the Kilpatrick reign? Millions and millions of dollars that Detroit desperately needs are being channeled to Moroun and seemingly no one in the mainstream media has the gonads to dig into that. [ Ask writers at alternative publications; ask Bankole Thompson, ask Jack Lessenberry, ask Joel Thurtell (joelolntheroad.com). At least the Ilitches and the Fords have contributed to the city; Moroun just bleeds it dry.

    1. Fiona lowther

      Typo corrections:

      WAKE up (not wait up);

      correct website for Joel Thurtell: joelontheroad.com

  2. Tom

    As a taxpayer, I agree with funding that provides public benifit. Ford Field, Commerica Park and the new ice arena provide a major facelift to our city. The teams that play in them improve the image of our city. And the entertainment we enjoy could not happen without these facilities. Add in the jobs created, crime prevented, etc….. and it seems like a good investment to me.

  3. ***

    I’m not sure how a new stadium prevents crime.

  4. John Rose

    It’s interesting..very rich people can take public funds for their pet projects (corporate welfare)so we can watch a billionaire pay millionaires to play hockey and the owner keeps the profits. And yet many of these same folks will be against any type of support for those who are struggling to eat and put a roof over their heads. Isn’t this grand:)

  5. Annie P

    How and when will the state” make up” for the loss of the school tax revenue (especially the non-homestead millage) in the DDA tax capture?

  6. David Waymire

    It’s not just Detroit stadiums….
    GR too….

    http://grcity.us/design-and-development-services/Downtown-Development-Authority/Documents/GRCAA_EconImpact_11.28.12.pdf Page 6
    “Construction of the $77 million Van Andel Arena began in 1994…while the majority of the project was funded publicly through a series of bonds issued by the GR Downtown Development Authority, $21 million came through private donations.

    Ditto DeVos Place…Kent County $93.2 million; state of Michigan $65 million, GR DDA $10 million…etc. Let’s make it clear, these kinds of projects seem to get taxpayer dollars on both sides of the state.

  7. Marshall Jacobs

    What Detroit needs right now more than ever is jobs and investment. With the 8,000 jobs included in this project, along with the state-of-the-art arena that will house many more events (other than hockey) compared to the Joe. With each event comes thousands of people coming into Detroit and spending their money at local bars/restaurants and hotels.

  8. John Q. Public

    The best part is how all those DDA bonds for Van Andel and Olympia Development are/will be paid for with money otherwise destined for the school aid fund. That’s a big reason for the decline in K-12 spending (if you believe there has been one).

    A major component of Proposal A and getting the dollars to work out was that school taxes were supposed to be off-limits to DDAs. Instead, as the Ilitches have shown, development muscles are flexed to keep the school taxes flowing to billionaires.

    It’s not just Detroit and GR stadiums–it’s all over the state. The people we elect–and re-elect even after they prove what a detriment they are to our well-being–have decided that entertainment is more important than education and health care for all. Then on Election Day we tell them how much we agree.

  9. Barry Visel

    It’s not just stadiums and DDA’s munching from the public trough, it’s all of us. Tax Expenditures (credits, deductions and incentives) are bleeding our State dry to the tune of more than $30 Billion per year. Take a look at Appendix A of the Michigan State Budget to see where it all goes: http://www.michigan.gov/documents/treasury/ExecutiveBudgetAppendixOnTaxCreditsDeductionsAndExempts_FY_2013and2014_394614_7.pdf

  10. J. Strate

    What are the opportunity costs of $270 million public expenditure on a new arena for the Red Wings? As one writer has argued, the DDA and other public officials through their decision have expressed their values: providing taxpayer subsidies to a billionaire owner of a sports team is a higher public purpose than K-12 public education. What will the spillovers be from a new arena? The DDA has done an analysis. Typically, analyses of this kind greatly overestimate the benefits.

  11. bill maxey

    I don’t want to hear about a new stadium, The economy is not good, try economic development,
    based on employment and training, people need training to fill the demands to fill job slots.Primarily #1 is to get our veterans to work, they return from the war,no jobs, they have scattered skills and experience.Train them for job slots and all groups can contribute to helping each other have a better life.
    Permanent employment in permanent career fields, which leads to family quality of life living. After these accomplishments every one can enjoy the life they deserve.

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