OT - One very big step closer to MLS in Detroit
Looks like Wayne County has "chosen" the Dan Gilbert proposal for the fail-jail site downtown. "Chosen" in quotes because the Walsh proposal remains on the table officially, but the county is now in deeper negotiations with Gilbert and hopefully rolling toward a formal agreement. Great news for those of us wanting to see an MLS franchise in Detroit, as well as for anyone who appreciates simple common sense in their county governments.
http://www.detroitnews.com/story/news/local/wayne-county/2017/07/31/way…
Would love MLS in Detroit. If it was benefitting anybody but Dan Gilbert (though I don't mind Gores).
I'm a DCFC fan, and I know a significant portion of our fanbase won't like this at all. But I am not opposed to DCFC being the USL affiliate of the MLS club if certain requirements are met regarding fan culture and grassroots stuff. It would mean a more competitive league and more games for DCFC.
Oh you mean the guy who has nearly single-handedly led downtown's rejuvination, in spite of local leadership and NIMBY pinheads like yourself? Right - why would we ever allow him to profit from investing millions of his own money downtown.
Oh that's right, you are that guy that came up with the alternative plan and the hundreds of millions of dollars of your own money to overcome the gross negligence in Wayne Cunty that caused the fail-jail in the first place. My bad.
I guess you could assume the commenter is a NIMBY Gilbert hater, you could also say he's against stadium subsidies.
At the moment this looks like a stadium subsidy, if a pretty decent overall deal compared to say, Little Caesars.
An added cost that isn't being considered is that Wayne County would have to transport the prisoners to court, which is right across the street from the FailJail, so despite gross incompetence or corruption...that location may Still be the best place to have the jail.
I, too, am generally against stadium subsidies but this is a special exception. It's entirely necessary to rescue the City from the bufoonery of Wayne County and the folks running Detroit.
You could drive two or three miles up Gratiot and have your pick of dumpy pieces of land to put a jail on. Instead, the dummies running the city picked an absolutely prime piece of real estate on which to put an eye sore. With leadership like that, it's no wonder it takes smart private money like Gilbert's to rescue the local government from itself.
I don't even really see this as a stadium subsidy, although Gilbert will probably figure out how to get one sooner or later. The bones of the deal are this:
- Gilbert acquires land and builds a big justice complex for X dollars.
- The county trades its current land on which the current justice system sits, plus $320 million cash, for the new justice complex.
Obviously there are like thirty zillion details to be worked out, but that's the base of it. Not really a subsidy here - Gilbert builds the new complex at a loss, cash-wise, but the land the county no longer needs more than makes up for it.
Later, I expect Gilbert will apply to the DDA for a little help. But given the nature of the DDA, I don't consider that a real taxpayer subsidy either, especially given how much Gilbert pays into the DDA in the first place.
There are plenty of good reasons to be in favor of a stadium at the FailJail. And yeah I think all things considered, it's a pretty decent deal.
Mostly I was really put off by the guy I replied to...there are good reasons to be skeptical of both the stadium deal, and Dan Gilbert. Stadium subsidies are the rule, not the exception so it's reasonable to think GiIbert is going to get paid. I get annoyed by both how much some people love Dan Gilbert and also how much he's hated. He's a good businessman trying to make money, not trying to save the downtrodden in Detroit. He's not a saint and he's not some cartoon villain either. So going off on someone who is skeptical like that is pretty petty and, to me, doesn't show much thought beyond a kneejerk dislike to a certain type of person.
I could imagine there are some city council members that don't want to cast a vote supporting more taxpayer subsidies going to a stadium...especially in a sport their constituents do not follow.
Yes, he's done a great job turning downtown into a healthy enclave for wealthy suburbanites and mostly white millennials. I'll give him that.
When he actually helps orchestrate a turnaround of Detroit Public Schools, or at least offers a helping hand, or ensures that the jobs he creates and the apartments he rents are accessible to the 70 percent of Detroiters who can't even sniff some of the benefits of downtown's resurgence, then we can give him his gilded throne.
The city needs tax revenue. Badly. Gilbert's developments gives it tons of that. That money goes toward hiring police officers, fixing the lights, paving the roads, what have you. That is how people sniff the benefits of downtown's resurgence. Just donating a bunch of money to DPS isn't going to happen, because there's no money to be made there and therefore it's a finite and limited benefit.
Faced +1
Welp, unfortunately a Gilbert lobbied bill passed last month, which allows him and his developers to recoup a massive amount of project development costs via tax revenue.
Aka, the city doesn't see a large portion of the tax dollars. Let's check in with Ann Arbor's own state Rep.
It didn't earn a vote from Rep. Yousef Rabhi, D-Ann Arbor. He said he'd served on a brownfield board and supported them, but that's not what the bills did.
"This is not a brownfield. This is completely different. This is corporate welfare," Rabhi said.
http://www.mlive.com/news/index.ssf/2017/05/house_passes_transformation…
But keep pushing that trickle down narrative, it sounds really nice in theory.
I've seen what downtown Detroit looked like before Gilbert, Ilitch and the other billionnaires started investing heavily in it. I'll take what we've got now.
Of course YOU will. You're probably a middle to upper class white guy who doesn't live in Detroit. Anything outside of a small area of downtown being developed and looking nice for your leisure doesn't matter to you.
I'll ignore your lazy ad hominem attack and note that from 2000 to 2010, Detroit lost 25% of its population (dropping from 951,270 to 711,088). The vast majority (over 90%) of those who left last decade were African-American. So no, Detroit was not a paradise for black people, either.
You're quick to criticize the man for investing in the city but I don't see you proposing alternative strategies for turning it around, strangely enough.
No shit, anyone with the means to leave, left. The city by any survey was/is 80-90% black, so wow shocking data that 90% (same percentage of Detroit citizens that are black) of those who left were black. You should win an award for that research.
My criticism is that the "feel good and hero" narratvies he receives for being a businessman are absurd, and his recent tax proposals are next level corporate welfare that steal tax dollars away from Detroit citizens.
For the record, Black people formed just over 80% of Detroit's population in the 2000-10 period, but over 90% of those who left the city were black, so they were more likely to leave the city than non-black residents.
Again, you're quick to dispense insults but I still haven't seen you propose any alternate solutions for helping the city turn around.
- A fixed small percentage of new development revenue goes directly to Detroit public schools.
- Any investor who wants tax subsidies for downtown real estate must invest a matching amount of the subsidy in demolition of vacant/dilapidated housing, clean up of community space, or building affordable middle to low income housing outside of downtown.
- The city immediately repeals all of the tax free incentives provided to Rock Ventures and they start paying standard city tax on their properties. The value of these properties has increased exponentially since purchase and he should pay the commensurate tax.
- Certain areas of downtown are reserved for Detroit citizen only investments. Meaning you need current Detroit residence to be eligible, and show proof of occupancy.
There's a few off the top of my head. These proposals would help actual Detroit citizens. What do you have other than irrelevant population data?
1) Cutting into a developer's bottom line only increases the cost of the project - that is, the affordability for the end-users. It jacks up a condo price beyond market value and decreases its accessability even further. It raises rents for businesses. This is the kind of thinking that believes businessmen just love absorbing new imposed costs and don't pass them on to others, which ignores a century of evidence to the contrary.
2) Exactly what is the point of a tax subsidy if you just say "well you gotta give it all back to us anyway"? I suppose that's a feature and not a bug in your eyes, but let's keep in mind: it's rare that the choice is "build with the subsidy or build without it." It's more usually "build with the subsidy or don't build at all."
3) Which tax incentives are those, exactly? I suppose the money could go toward paying lawyers to defend the city against the lawsuits they'd incur by breaking contracts.
4) Great way to ensure vacant lots remain entirely vacant. Also a great way to spur lawsuits. If you own a piece of land downtown, and now you can't do anything with it unless you move into the city, that will be construed by the courts as an illegal taking and put the city on the hook for millions.
I do have a better proposal. Let Gilbert make his money and keep building stuff. It's not evil. Only in Detroit is there this idea that residents of a city should benefit when someone builds a thing on land he owns that happens to be within the borders. You don't see the Novis and Northvilles of the world demanding a developer pay off the residents when they build a subdivision. They simply understand that when people move into that subdivision, they bring money with them and that money helps the city at large.
1) I don't care if I pass off the public school tax to residents of the luxury high rise.
2) The developer can use the subsidy for PR and goodwill. Otherwise the market is hot, I'll find someone else, it's shrewd city business just like Gilbert uses on his side.
3) If you're not aware of the massive tax incentives he has received, you should not even be having this argument with me.
4) You mean kind of like how slumlords Moroun and Illitch have sat on vacant/run-down properties for years without any investment?
Income inequality in this country is out of control, and letting billionaires receive corporate welfare and operate unchecked is a major reason why.
But you would care if a middle-class high-rise became a luxury high-rise.
And if you can't name a tax incentive when asked, don't bring them up.
Here you go, took me 10 seconds on google. One of many, on top of the brownsfield legislation.
"Gilbert's firm currently enjoys a Renaissance Zone designation at the Hudson's site that runs through 2026. Renaissance zones are generally free of almost all state and local taxes for businesses located within their boundaries"
http://www.freep.com/story/money/business/michigan/2016/04/27/hudsons-d…
Six years (actually less - construction clearly has not started as of April 2017 as mentioned in the article) of semi-tax-free existence (occupants of the tower still have to pay things like bond millages) in exchange for a regularly taxed structure indefinitely is not a bad tradeoff, no? Especially since Lansing would compensate the city for lost school financing revenue while the renaissance zone is in effect.
That family let the property they owned sit vacant while neighboring properties fell apart and dropped in value so they could swoop in and get it at a cheap price. It makes good business sense if you can sit and wait, but it makes the city look bad.
Some of those burned out buildings or vacant lots people drove past after a baseball or hockey game were Ilitch properties or right next door to an Ilitch property.
The Ilitch family is wealthy because of business decisions they made that were best for them, not anyone else.
Of course he wanted to make a profit, being a businessman. But the collapse of downtown predated most of Ilitch's acquisitions. He acquired land and buildings that were already dirt cheap, as demand for them was so low.
In fact, the trickle-down narrative is very much true.
For one thing, when some white suburbanite moves downtown, they add income taxes to the city coffers. So does a suburbanite whose office moves downtown.
Second, downtown is getting saturated. Midtown is getting close. Property values are zooming. That's been forcing development outside those neighborhoods. Development is taking place in West Village, Corktown, New Center, Virginia Park, Rivertown, the University District. Livernois is on its way back. SW Detroit is heavily on the rebound. There are signs of life in Jeff/Chalmers. Things are going on in those areas and it is absolutely a trickle-down effect from downtown's rebound.
No, it is absolutely not true, no matter how bad you want it to be. The fucking IMF and other respected economic sources have disproved the garbage theory of trickle down time and again. All you've done is make the case for developers to make more money and transplant upper class white suburbanites to have nice places to live downtown. None of these things will remotely improve the life for your average Detroit citizen.
Trickle down is propoganda from rich old white people like the Koch brothers to make the case for corporate welfare, lack of taxation, and other garbage that protects the wealth of the elite class.
http://money.cnn.com/2015/06/15/news/economy/trickle-down-theory-wrong-…
If you can't get the concept of "rich white people" putting income tax money into the city coffers, and the city using that money to pay for services, I don't know what to tell you, but it's completely fundamental and completely true.
Detroit needs MONEY. It needs money very, very, very badly. People do not just roll up and donate a shit-ton of money and pay off a bunch of water bills just out of the precious goodness of their hearts. Money goes where it can make more money. If you don't create an environment where people can make money, they're not going to give you any of theirs. End of story.
And I can absolutely, positively promise you nobody would give two fucking shits about developing anything in West Village or Rivertown if downtown wasn't a cool place for people with money. Oh, hey, Detroit, you want us to build affordable housing in West Village by renovating this old vacant abandoned schoolhouse? Nah, fuck off, cause we can make more money in Novi because nobody's interested in living in the ghetto. Oh wait, they are interested, because now there's a worthwhile place to go in Detroit? Oh, maybe I'll develop in West Village after all.
You need money to make money. You also need money to pay for things. Even the IMF knows that. And if you think development has been limited inside the freeways downtown, you aren't even remotely paying attention.
We're talking income tax revenue from people who move into his condos and work at his offices; business income taxes from businesses where more money is spent; increased property taxes even if a portion goes to the DDA.
One thing I'm really not worried about is people like George Cushingberry and Raquel Castaneda-Lopez being in the pockets of the rich developers and constantly just giving them city tax money.
I'm embarrassed to have him represent my district. I totally enjoyed this being a Cush-free zone!
I just came to grips with the fact that I can either vote for once-disbarred "Cush", convicted felon Virgil Smith or someone who won't win.
Many apologies. I totally get that, being represented in the state Senate by Bert "Ghost Employee" Johnson and the state House by Bettie "Primary Residence In Port Huron For Tax Purposes" Cook Scott. Maybe vote for Virgil on the hope that the courts will vacate his plea agreement and send him to jail, leaving an empty chair?
I honestly don't know who voted for Cushingberry first time around. It was a complete name recognition pick, even though he defaulted on his mortgage in a pretty decent neighborhood.
RE: Virgil. The way I look at it, I lived in DC for 10 years and watched folks there elect Marion Berry to their city council. Doing coke on national TV has to be worse than shooting at your ex. Right?
I'd argue that Gilbert, on a per-revenue basis, will pay the least amount of taxes as a first mover. Typically, it seems like cities begin to phase out their development incentives as there's more critical mass, and I envision that it's small business owners that aren't connected to Gilbert who will face those challenges.
Let me relay an analogy to you: I helped a small business get off the ground in downtown Detroit a few years ago (mid-2012). It was one of the tenants in a ground floor commercial space on Woodward that was owned by Gilbert. The initial rent that Bedrock set the lease at was reasonable given its proximity - with the condition that the rent would triple the year following. It felt like one of those Comcast deals where your cable bill blows up after a twelve-month plan.
To me, that doesn't smack of a company that encourages critical mass or property development - it's entirely in the business of business. Moreover, Gilbert's development incentives aren't being passed through to his tenants (as a previous poster mentioned).
And I didn't say donating money to DPS is the solution. Far from it. You have thousands of people in the "Family of Companies" who have the requisite skills to make DPS stronger. What are they doing to resolve it? Are they building programs to help DPS students get jobs at Quicken? Are they giving money to local entrepreneurs to help them succeed?
On that note: I studied educational systems extensively in grad school. Per-student spending was one of the lowest factors correlating to academic success. Factors such as instruction outside of the classroom correlated much better. Effective public transit and after-school programs led by businesses are potential ways to help with this. Gilbert's answer to the former was a three-mile, $137 million light rail.
Gilbert is doing the most helpful thing he can possibly do - increasing property values to drive school funding. Sure seems like he's doing his part.
When he actually helps orchestrate a turnaround of Detroit Public Schools,Inner-city public education is a nationwide problem. No city has "turned it around."
You're suggesting that this is a lost cause. Truth is, the same epidemic that Detroit is facing has been played over and over again.
The same thing is happening in San Francisco - which has a boatload more resources and cash than Detroit does.
Maybe it's time for a different approach. Why it isn't happening in Detroit is a great question.
It may or may not be a lost cause; but expecting a random rich guy to have the answer may not be reasonable.
I don't expect any rich guy to have the answer; I suppose I also don't expect him to wash his hands of the situation.
Stop romanticizing Gilbert like he’s some heroic icon who saved the city out of goodwill. He invested in Detroit because the real estate was at rock bottom prices for a major metropolitan area in the US, and he has leveraged the city into a number of sweetheart deals for his companies where they are paying little to no tax on properties for decades. He’s a cutthroat businessman and a good one, but sheep like you lap up the “rejuvenating Detroit narrative”.
Oh btw, he’s leveraging the Michigan government to pass absurd proposals where he can collect the SALES AND INCOME tax from properties his developers make investments in, that have no cap. Meaning he would be double dipping on business revenue based profits and tax income over the life of the investment.
Call it what it is, these are great investments for Gilbert's pockets and those (mostly out of towners) who will enjoy an MLS team, not great for the actual citizens of Detroit.
http://deadspin.com/dan-gilbert-backed-bill-would-allow-developers-to-p…
Such a simple plan. So why don't more super-rich guys invest in depopulated cities?
The city of Detroit is losing population, but a lot of that is being absorbed by the suburbs. I believe the Detroit area still has the highest concentration of millionaires in the country. The auto industry is still a major player internationally. That makes Detroit a more desirable location than, say, Buffalo.
Nobody should downplay the risk Gilbert is making, but he is investing in a heavily populated metropolitan area with affordable downtown commercial real estate rates.
Sure, but we had gotten to a point in the metro area where the business community wanted absolutely nothing to do with Detroit, or even Wayne County for that matter. It was ensconced in Oakland County. The trend was to move more and more northward, leading to situations like the Pistons playing in Auburn Hills.
Of course Detroit gave these guys sweetheart deals; it had no leverage. The alternative was just more of the bleeding. But they took the deals, and momentum is now there for more development going forward.
Dan Gilbert is trying to get tax breaks from the state for his new skyscraper, branding it as the tallest building in Michigan. The RenCen is already the tallest building, but he's trying to as much as possible to take the Detroit location out of the minds of lawmakers.
Times are improving, but it's hard to completely reverse a trend that started in the 1950s.
Iilpenny covers a lot of the reasoning, and basically shows your population argument is irrelevant. Also, he was paying pennies on the dollar for major metropolitan real estate and in a lot of cases getting tax free incentives from the city. Not sure what you're not understanding, plenty of detail was provided. Many wealthy people invest in down markets if they sense opportunity for growth/profits, this is no different.
And let's not forget that for all the praise Ilitch gets for reinvesting in Detroit, he spent decades buying up tons of property and doing nothing with it--often taking measures to speed up decay and fast-track inspections so he could demolish historic buildings (sometimes using state funds and tax incentives) for things like parking. For all the praise he gets for the Fox Theater renovation, he actually bought the building from Chuck Forbes after Forbes had all but completed the renovation. Ilitch paid for the last few coats of paint.
Gilbert is just Ilitch 2.0. Different time, different strategy, but same old billionaire slumlord who loves the publicity for "saving Detroit." Good on him, but looking through the hype and John Gallagher praise pieces and feelgood energy shows there's a bit of ugly behind the scenes.
Ilitch sat on a lot properties in less desirable neighborhoods (Cass Corridor) until the time was right to buy up other land. Gilbert bought primarily in downtown when it was cheaper and could more quickly occupy his spaces.
Honestly, I think what Gilbert did was smart, and it hurts to say that about a Sparty grad. He has played the system well.
Ilitch bought more than his fair share downtown. You just might not recognize a lot of it now under all of the landscaped parking lots.