OT: Plans Unveiled for Wings New Arena

Submitted by Sac Fly on

According to Freep and Detroit News sources, Illitch Holdings met with the DDA this afternoon and a tentative deal has been reached for an 18,000 seat multi-purpose event center. The arena would be located kitty corner from Comerica Park. 

It's still very early in the project, so no word yet on the future of JLA. Illitch Holdings hopes to get the deal finialized by the end of the year.

More here

Section 1

June 20th, 2013 at 10:55 AM ^

The leading reporter on this story (he's been on this story for years, essentially) is Bill Shea of Crain's Detroit Business.

Here is his story from yesterday:

http://www.crainsdetroit.com/article/20130619/NEWS/130619810/dda-red-wings-unveil-650-million-arena-and-entertainment-complex 

Just to clarify all of the ignorant flaming going on, no general revenue funds from the City of Detroit will be used on this project.  The DDA has some dedicated funding, which cannot be used for stuff like city pensions, police budgets, or neighborhood lighting or demolition.

In other words, the people complaining about "how can an exhausted city budget support this?" are way off b ase and they need to learn more about the details.

Reading.  It is fundamental.

Colin M

June 20th, 2013 at 11:38 AM ^

I don't see how it's relevant which fund the money comes from. It's tax revenue. The money was originally raised to pay down DPS debt. The state legislature then passed a bill allowing the funds to be used for a development project. I see no reason why they couldn't have earmarked it for streets, public safety or any other public service. Nobody bats an eye at the idea of Kevyn Orr abrogating collective bargaining agreements, but god forbid we would use these funds that have been earmarked for development projects on something else. 

I know it's convenient to insist that the debate be constrained by which fund the money belongs to. That puts the argument on your terms and lets you call others ignorant. But the real question is whether or not this is an efficient use of public funds. Based on the substantial evidence that sports arenas are poor investments that typically have a negative ROI, the answer seems to be a resounding NO. You've conspicuously neglected to address that issue and instead chosen to hide behind the non-issue of which fund the money is held in. 

Section 1

June 19th, 2013 at 3:12 PM ^

But they cannot demolish JLA fast enough.  What an eyesore.  A blot of ugly concrete and steel marring what could be and what should be a beautiful riverfront.  I'd like to help plant the explosive charges for that demolition.

Monocle Smile

June 19th, 2013 at 3:27 PM ^

The location of JLA is far and away the best thing about it. If only the city could destroy it and build a sexy hockey arena in its place without breaking an already broken bank.

Section 1

June 19th, 2013 at 9:32 PM ^

are a punk. 

Please don't expect me to have anything but contempt for you, if you were never at an Original Six game, or a Hearns fight, or a concert at Olympia, and you still want to ridicule me for having done all of those things.

HipsterCat

June 19th, 2013 at 3:01 PM ^

new arena is smaller than the joe is right now but the joe does need an upgrade. i wonder what they will do with the joe after the new stadium is opened.

BlueinLansing

June 19th, 2013 at 3:05 PM ^

of irresponsible projects they can't afford, includes bulldozing Joe Louis and expanding the convention center on the site

 

Most likely the property will be sold to some wealthy dude and they'll build a condo project on the riverfront.

kdhoffma

June 19th, 2013 at 3:36 PM ^

Because not all seats are created equal.  If you add twice as many suites by taking away some standing room only, upper bowl, obstructed view seats, you'll make a ton more money.  I'm sure the Illitch's have done their homework in order to maximize seat revenue.

TRIPP3

June 19th, 2013 at 10:39 PM ^

they have done their home work. That is why they hired Tom Wilson, to help build the new building. it should be done well, I hope they put the cameras in the right spots and have a press box this time. one of the things they forgot when they built the joe. I love the joe for the history, but I cant wait for the new building.

Cali Wolverine

June 19th, 2013 at 3:05 PM ^

...this is sad. During my four years at Michigan, Wings won the Cup twice and I had the privilege of going to many playoff and Stanley Cup games at Joe. It was not the same watching Hockey back in LA at Forum and now Staples. It was the Mecca of Hockey.

Callahan

June 19th, 2013 at 3:06 PM ^

$285 million of it will come from public funds. I'm not usually that guy, but that's obscene considering the cuts this state and the city of Detroit have made in recent years. 

mgowake

June 19th, 2013 at 9:01 PM ^

Downtown does seem to be a better place to be in the past decade or so. I bet they studied this. I'd love to see that info. Certainly hasn't been a panacea, though.

joeyb

June 19th, 2013 at 3:20 PM ^

The last time I saw the plans, it didn't just include an arena, but also more bars and restaurants to surround it. I believe they are hoping to entice the Pistons into moving back to Detroit as well. More games => more spending + more jobs => more taxes. I don't think they are going to have a hard time getting their $285 million in back if everything goes according to plan.

MGoCombs

June 19th, 2013 at 4:51 PM ^

All of these narrowly focused "studies" fail to see the big picture. Are there plenty of examples of really bad publicly-funded stadium projects? Yes. Are there examples of well-executed stadium projects that have reaped countless benefits for a city? Yes. The problem is these only look at what the city makes from the stadium itself, which will always be a loss, and would be a loss to the owner without public funding.

However, look at an example like PETCO park in San Diego, located in the once run-down, sparsely populated and underdeveloped East Village neighborhood. Since PETCO was constructed in 2003, East Village up to Cortez Hill, about a mile N-S, and half mile or so east-west has completely transformed, and most of which was during one of the worst periods for real estate in recent memory. The neighborhood is now home to countless bars, over a dozen condo/apartment buildings, several hotels, retail establishments and office spaces, all of which contribute quite a bit in state and local taxes. Can this all be solely attributed to the ballpark? Maybe not, but it's naive to pretend that it was a mere coincidence. It changed an entire neighborhood of empty houses, auto emission shops and abandoned buildings into a revenue stream for the City of San Diego. I would say it was a good investment.

Will this happen in Detroit? Who is to say, but asking whether or not the stadium will make the city money is the wrong question. It's what the stadium can do to revitalize an area and build a tax base where one currently does not exist.

EDIT: TL;DR version: There are plenty of examples for and against how stadiums revitalize neighborhoods and benefit or cost the city. Hand picking a bunch of bad ones and ignoring good ones is a cheap way out of the argument. Focusing on the revenue generated by the stadium alone is also a very poor way of analyzing impact.

Colin M

June 19th, 2013 at 5:11 PM ^

I think you're underestimating the depth and breadth of these studies that you've scarequoted.

Economic impact studies typically do look at economic development and the impact on tax revenue through indirect effects. They don't just add up the revenue from the stadium itself and call it a day. For instance, the University of Michigan sports economist quoted in the Atlantic article specifically talks about the limited impact sports stadiums have on economic development. There have been lots eeconomic impact studies that have overstated the benefits associated with sports stadiums (typically by ignoring or understating substititution effects) and in recent years economists have devoted more resources to debunking the costly myth that subsidizing construction of sports stadiums is good economic development policy.

Finally, I don't really think that ShockFX hand picked narrowly focused studies to support his argument. It looks more like he just took a bunch of reasonable google results and pasted them in. If he'd had more time and the inclination he could have provided references to academic studies that would pretty thoroughly debunk your claims.

MGoCombs

June 19th, 2013 at 5:43 PM ^

You are correct, but most of these studies are trying to negate the economic impact studies done by cities, developers, contractors, etc. who are arguing in favor of stadium developments and the economic and fiscal impacts. I too believe that they are often grossly overstated and never realize the $XX billion promised in the preliminary study. There's rarely that kind of return on investment, and the economists calling them out are correct to some extent.

And I wasn't specifically calling out ShockFX's hand-picking of the links, but that often people pick really bad stadium examples to illustrate their point, as I've seen throughout this thread, and are included in some of those links. Yes, there have been a lot of stadium debacles. But there have been a lot of stadiums done right that have led to a huge returns on investment. I don't know the $ figures, but I would have to assume the City of San Diego, for instance, is well on it's way to getting back that $450M and then some, not to mention the non-monetary benefits of having a healthy and vibrant neighborhood.

There's no right answer to "are stadiums good or bad investments?" Probably more often than not, they have been bad investments, but that has more to do with the planning and execution by the city, the ownership and partners than some inherent "badness" of city-subsidized stadium projects. I guess my poorly articulated point was don't assume all of these projects are created equal because some really dumb cities fell for some really dumb projects. It's possible to have a beneficial project.

ShockFX

June 19th, 2013 at 5:47 PM ^

I appreciate the discussion, but would love to see the list for what stadiums this quote applies to. " But there have been a lot of stadiums done right that have led to a huge returns on investment." 

I'd like to see some facts, studies, or concrete examples with numbers of these benefits, success stories, or instances where the stadium revitalized an area.

Wasn't the area near Petco just where the thresher of gentrification was going next in a city awash with wealth?

MGoCombs

June 19th, 2013 at 6:10 PM ^

Maybe that line was over-stated, particularly since I can't really think of many other good examples (oops), not that I'm sure some don't exist. Coors Field along with PETCO is kind of the model for how to do it right. The LoDo area experienced a very similar transformation. I can't speak to the full fiscal impacts though. Target Field is probably too early to tell, but has also spurred some downtown development in Minneapolis, but from what I understand they're still not close to getting the full return on the city investment despite being well on the way.

Regarding PETCO, I don't know if I would call San Diego awash with wealth. Sure, in other parts of the city and county, the region didn't experience the same lull in development that other cities were experiencing during that same period, but East Village was not getting attention until PETCO was constructed/planned. San Diego wasn't exactly an urban playground like it is today until recently, with most money going into single-family units in greenfields and beach communities. Many would argue the park had a lot to do with this, but I am sure millennial lifestyle trends and the small turnaround in the financial market also helped.

EDIT: To add, I would argue stadiums alone don't create momentum or development, but catalyze potential development and amplify a budding trend. Most examples of bad stadium projects take the "if you build it, they will come approach" (see: Phoenix), meaning revitalization will happen. That's not always true. You have to have something already there, some momentum, much like you alluded to, that East Village was ripe for "gentrification" (though I don't know if this exactly qualifies). I would argue that the stadium catalyzed that growth. Same in Denver and Minneapolis. One could argue same with Detroit, that this will build on and catalyze the current momentum around that area, but that one is a little more difficult to sell in my opinion.

snarling wolverine

June 19th, 2013 at 6:12 PM ^

I think it's very difficult to assume that what has worked in trendy cities like San Diego and Denver will work in Detroit.  You're talking about cities with steadily growing populations, that have been attracting young adults from other parts of the country for decades.  Detroit needs to be compared with cities like Cleveland or New Orleans - cities that have been fighting population loss for years.

MGoCombs

June 19th, 2013 at 6:25 PM ^

Snarling Wolverine, totally agree! I wasn't trying to defend the specific Detroit proposal, just the growing (albeit, well-reasoned) backlash against any and all public supported stadium projects. My only counter would be, correct me if I'm wrong, the area around the proposed stadium is actually growing in population (from a very low starting point), while the rest of the city is declining. So, they'll probably argue that they're building upon that momentum. I have no idea of it will work.

Colin M

June 19th, 2013 at 7:26 PM ^

Are you able to find any independent study suppporting your thesis that some sports arenas yield positive benefits via economic development? Because I really think there is a right answer regarding public funding of sports arenas and it's (almost*) never.

*Apparently, the Staples center in LA may be the exception that proves the rule.

ShockFX

June 19th, 2013 at 7:43 PM ^

Staples is the home to 3 professional sports teams that occupy it basically nightly between October and May, and hosts concerts and the circus during other nights. Definitely an outlier in this kind of thing.

ShockFX

June 19th, 2013 at 6:35 PM ^

I think baseball stadiums, given the generally cheaper average cost (no roof needed most times!) and 81 games a year, and general summertime entertainment, do have the most potential for return to an area. Now, that's just my opinion, I don't actually have facts to back it up.

Coors Field was net new to the city, and I really don't know about Denver enough to chime in past that. Nor San Diego outside of what I've already posited.

Overall I feel a stadium, privately funded, is a great accelerator, but not really a good catalyst, especially when publically funded. AT&T Park in SF is privately funded, so is the new basketball arena going up there. Just gotta make the owners pony up.

tbeindit

June 19th, 2013 at 6:40 PM ^

Also to add to the discussion, if from what I understand is correct, this stadium would go right in downtown, which is already a pretty developed area.  If the city and investors are looking to "develop" a community and a neighborhood, that's probably the last place they should locate a new stadium.  There are multiple sports facilities in that area and if stadiums truly do improve the economy, that region has already reaped the benefits.

I understand the need for improvements, but I have severe doubts about pumping any government funds into a new stadium (not saying they're going to) in a region that's already developed, already has a boatload of sports facilities, and filled with governments with severe budgetary problems.

MichiganManOf1961

June 19th, 2013 at 3:51 PM ^

" if everything goes according to plan." Public sector thinking at it's finest.  That's why half of California's small cities are on the road to bankruptcy.  "It's the 90s! Life is good and it will always be good! Here, let's spend some more money!"  

Correct me if I'm wrong... but DETROIT HAS AN EMERGENCY FINANCIAL MANAGER, THERE ARE 100,000 VACANT HOMES AND LOTS, UNEMPLOYMENT THRU THE ROOF, etc. etc.  Probably the "worst" major city in the US.  And they want to spend $300 million on a stadium?  Sorry, I missed the news story that said the Joe was unusable.

 

mGrowOld

June 19th, 2013 at 3:14 PM ^

So instead of spending money to deal with this...

There are plans to spend money to deal with this....

If it wasn't so sad it would be funny.

kdhoffma

June 19th, 2013 at 3:42 PM ^

So if you are Detroit, what do you do?  

Accept spending money on #2 when over 50% of the cost will be paid for with private funds... #2 will then generate money for decades to help fix #1.  

Or do you deny #2 and watch as a new arena is built in the suburbs causing you to lose out on all the $'s that the most successful pro sports team in your city's history will bring in.