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Ilitch Announces New Arena Plans

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Old
12-07-2012, 10:57 AM
  #101
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Originally Posted by Buck Aki Berg View Post
Or the public could recognize the benefit it receives from having such a building in their community (just because the community value of an arena can't be put on a balance sheet doesn't mean it's non-existent) and pay their fair share, especially when tax money is being raised specifically for such endeavours.
That is utterly ridiculous when Detroit has a 30 year old, perfectly usable arena right now.

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12-07-2012, 11:28 AM
  #102
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That is utterly ridiculous when Detroit has a 30 year old, perfectly usable arena right now.
I don't know the state that JLA is in, so I can't make comment on how "perfectly usable" it is, but I presume he's not looking to get a new arena because he's bored. I assume that his desire stems from the fact that JLA predates some modern arena amenities by 15-20 years, but I can't say with certainty if there's anything to that.

Can anybody in Detroit make any comments about the state of the arena? I haven't heard anything about it falling apart the way Nassau Coliseum and Mellon arena are/were.

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12-07-2012, 11:32 AM
  #103
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Can anybody in Detroit make any comments about the state of the arena? I haven't heard anything about it falling apart the way Nassau Coliseum and Mellon arena are/were.
Every single seat in the house has a great sight line to the ice. It is the single greatest attribute of JLA, and its only one.

Beyond that, the seats are small, the place smells like piss, the beer sucks, parking is a pain and it is located exactly in the middle of nowhere in Detroit (although it is prime real estate on the river). So much so that the only "cool" bars around actually run shuttles back and forth all game days because you dont really want to walk from the Joe to these places at night, mostly because theyre far-ish, unless youre in a big crowd.

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12-07-2012, 12:00 PM
  #104
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Will this arena

Also house the Pistons? If not this is a complete waste.

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12-07-2012, 12:23 PM
  #105
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Can anybody in Detroit make any comments about the state of the arena? I haven't heard anything about it falling apart the way Nassau Coliseum and Mellon arena are/were.
Everything is relative. I only went once, last year. By itself it is indeed "perfectly usable" in the sense that there are no structural issues or truly awful features about it. But it doesn't match all the shiny things built around the league in the past 15 years. Gotta keep up with the Joneses.

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12-07-2012, 12:51 PM
  #106
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Originally Posted by Buck Aki Berg View Post
Or the public could recognize the benefit it receives from having such a building in their community (just because the community value of an arena can't be put on a balance sheet doesn't mean it's non-existent) and pay their fair share
The public does pay its fair share, by buying tickets to events.

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12-07-2012, 01:19 PM
  #107
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It's always possible that the mixed use component will be dropped, but I'd prefer to see plans for a building that has 24/7 use that might get scaled back for whatever reason, then start out with plans for a structure that's guaranteed to only be used a few hours a day on a few days a week and have no way of expanding on it going forward because the funding has already been secured for what's been planned.
You're missing a bigger point. in 1992, Detroit voters passed a proposal by a 2 to 1 margin to ban public financing to replace Tiger Stadium. In 1995, the city council voted to overrule that but a group of people decided to put it on the ballot. In 1996, Detroit voted on whether to fund a new baseball stadium and/or to ban using public money to fund sports facilities. The new stadium proposal passed quite easily - albeit with a very small number of voters actually showing up and the ban failed. As a result, the Tigers got $40 million from the city, the DDA was extended out to Foxtown and they sold $80 million worth of tax exempted bonds and the state kicked in $55 million from the "Strategic Fund" even though the state legislature never even voted on it.

The mixed use element was a major selling point in getting that deal done and its one reason voters changed their mind so much on the issue. Ilitch never delivered. He never built any mixed use buildings and they havent restored any of the many abandoned properties they own either. Why should we give him more public money when he didn't build what he said he was going to the first time around? The public still owes at minimum $60 mil on CoPa - see my post of page 4 for the gory details on its funding. I'm not sure the public deserves to be fleeced again even though I do agree that the Wings desperately need a new arena.


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12-07-2012, 01:28 PM
  #108
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The public does pay its fair share, by buying tickets to events.
That's like saying my bus fare pays for the bus system. My taxes pay for the system, my fare pays for the use of it.

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12-07-2012, 04:54 PM
  #109
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How many Wings fans here live or were raised in Detroit (city proper)?

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12-09-2012, 11:33 AM
  #110
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How many Wings fans here live or were raised in Detroit (city proper)?
Unless the member is 45+ years old...none.

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12-09-2012, 11:47 AM
  #111
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It went to the Senate because of Proposal A that Michigan voters passed in 1994. Proposal A forced TIF and TIP districts to only take school tax money to cover existing debt. Any excess money is returned to the state. A new hockey arena is new debt. As a result of this deal, instead of the DDA paying off debt that it owes to the school district, the 10-15 million (varies due to economic conditions) a year will be used for a hockey arena. The bill also exempts a DDA from all taxation on its earnings or property.

DDA's issue tax exempt bonds. In the case of the CoPa, taxpayers lost $36 million after the DDA took out $80 million in those bonds. As of now, Wayne County and Detroit still owe at least $61 million on public debt for Comerica Park. It was re-financed a few months ago to try to save some money as the debt had a 6% interest rate that ran through 2027. The goal was to cut it to 3%.

Ilitch himself has had all kinds of problems trying to pay down CoPa debt. He was rejected by local banks to finance the project from the get go and had to turn to Sumitomo Bank of Japan to get the deal done. In 2000, he attempted to get over $200 million in financing from a group that included Merrill Lynch but was rejected when credit agencies didn't rate the Tigers debt high enough. He tried to refinance his debt in 2001 but was rejected once again. As the Tigers floundered at the gate, he became desperate and borrowed $140 million in 2005 from a group led by Sumitomo to pay off what was $115 million in debt from his original $145 million loan.

In summary, you can see why this is a delicate issue. The public still owes boatloads of money on the CoPa and Ilitich struggled to pay for it since the Tigers were so awful during the first years of its life. OTOH, The Palace was paid for privately as was 90% of Ford Field. If you look at Ilitich's financing struggles at the CoPa, I'm not sure he could get a new arena done on his own.
Great post.
Thanks for all the info.

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12-09-2012, 11:45 PM
  #112
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I suppose one could do lots of things, but the details are difficult to find at this point. All we know so far is that the development fund would be used as security for the construction costs; and that an exemption for property taxes is being sought. Mind you, I know that's fairly typical for companies claiming to be bringing jobs to a community. Speaking for myself, I simply don't like the use of public funds in arena financing.





Metro Detroit has about 5.5 million people, and one of the richest counties in the country (Oakland County). While the auto industry has weakened, there are still billions of dollars floating around the region. Two Big Ten universities are housed within that metro region (UofMich, MichState), adding tens of thousands of jobs to their cities-- profs, staff, hospitals/clinics/doctors, and of course the money students bring in... easily 100K students between the two schools, iirc. Last year, U of Michigan ranked as the second highest recipient in research funding ($1.24 billion-ish), just behind Johns Hopkins-- out of all US universities.
If what you say is true, why not abandon Detroit outright from a business standpoint and build the arena in another city in Michigan?

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12-10-2012, 11:43 AM
  #113
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If what you say is true, why not abandon Detroit outright from a business standpoint and build the arena in another city in Michigan?
Downtown and Midtown are growing neighborhoods. Midtown is probably seeing more development than any area in the entire state. For all of Detroit's problems, its still the cultural and entertainment hub of Michigan. All roads lead there making it the most convenient place for Metro Detroiters. Besides that, Ilitch already controls all the land he needs to build on. Good luck pulling that off in the burbs unless he moved the team to some far out outer ring place which would go against everything the Ilitch family stands for and it would probably alienate many fans in the process.

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12-10-2012, 01:49 PM
  #114
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Buck Aki Berg enough. The league is locked out. What benefit are they receiving right, considering no one is working?

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12-10-2012, 01:50 PM
  #115
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That's like saying my bus fare pays for the bus system. My taxes pay for the system, my fare pays for the use of it.
It's pay's for both. There is more to life then sports.

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12-10-2012, 01:59 PM
  #116
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Why public dollars? Shouldn't he just drop his teams payroll from the cap ceiling to the cap floor? That extra 20 million a year could pay for the arena.

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12-10-2012, 02:05 PM
  #117
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If what you say is true, why not abandon Detroit outright from a business standpoint and build the arena in another city in Michigan?
Price of land. Few cities can offer the kinds of massive tax incentives Detroit is talking about, too

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12-10-2012, 02:18 PM
  #118
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Originally Posted by Buck Aki Berg View Post
That's like saying my bus fare pays for the bus system. My taxes pay for the system, my fare pays for the use of it.
No, public transportation is non-profit. Your fare also helps pay for the bus system. Taxes does too.

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12-10-2012, 11:55 PM
  #119
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Quote:
Originally Posted by Kimota View Post
If what you say is true, why not abandon Detroit outright from a business standpoint and build the arena in another city in Michigan?
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Originally Posted by Mwd711 View Post
Downtown and Midtown are growing neighborhoods. Midtown is probably seeing more development than any area in the entire state. For all of Detroit's problems, its still the cultural and entertainment hub of Michigan. All roads lead there making it the most convenient place for Metro Detroiters. Besides that, Ilitch already controls all the land he needs to build on. Good luck pulling that off in the burbs unless he moved the team to some far out outer ring place which would go against everything the Ilitch family stands for and it would probably alienate many fans in the process.
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Price of land. Few cities can offer the kinds of massive tax incentives Detroit is talking about, too
In addition, there's a great desire locally to see Detroit revived. Projects that help with that perceived revival are highly popular here, both with politicians and fans. Very good business decision.

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12-11-2012, 12:15 AM
  #120
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I really question the wisdom of spending $650M for a disposable stadium.

30 years is the going rate?

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12-11-2012, 10:57 AM
  #121
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I really question the wisdom of spending $650M for a disposable stadium.

30 years is the going rate?
**Personal bias - I support the idea of public money to partially pay for such projects**

It's not a matter of a "going rate", it's a matter of obsolescence. The only reasons the Fourms and Gardens of the NHL lasted for 70-80 years was because there was no game-changing advancement in stadium design over that time. But once other buildings sprouted up with club seating and suites (not to mention being more architecturally pleasing), they had to be done away with in the interest of staying competitive - not only in terms of revenue for sports teams, but also in terms of attracting top-end touring acts.

If the stadium-building boom of the 90s had happened 30 years prior, we would have lost all the storied O6 buildings back in the 60s. Likewise, had places like JLA and Rexall been built in the 30s and 40s, they would have had half-century-plus lifespans as well.

We saw the same thing in baseball - Camden Yards was a game-changer in stadium design, and many of the parks built afterwards took on elements of this new design. As a result, many ballparks that weren't very old at all became obsolete (Three Rivers Stadium, the Kingdome, Veterans' Stadium, and Fulton County Stadium all closed their doors after 35 years or less), in addition to places like Tiger Stadium and Comiskey Park which were much, much older.

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12-11-2012, 12:30 PM
  #122
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**Personal bias - I support the idea of public money to partially pay for such projects**

It's not a matter of a "going rate", it's a matter of obsolescence. The only reasons the Fourms and Gardens of the NHL lasted for 70-80 years was because there was no game-changing advancement in stadium design over that time. But once other buildings sprouted up with club seating and suites (not to mention being more architecturally pleasing), they had to be done away with in the interest of staying competitive - not only in terms of revenue for sports teams, but also in terms of attracting top-end touring acts.

If the stadium-building boom of the 90s had happened 30 years prior, we would have lost all the storied O6 buildings back in the 60s. Likewise, had places like JLA and Rexall been built in the 30s and 40s, they would have had half-century-plus lifespans as well.

We saw the same thing in baseball - Camden Yards was a game-changer in stadium design, and many of the parks built afterwards took on elements of this new design. As a result, many ballparks that weren't very old at all became obsolete (Three Rivers Stadium, the Kingdome, Veterans' Stadium, and Fulton County Stadium all closed their doors after 35 years or less), in addition to places like Tiger Stadium and Comiskey Park which were much, much older.
Big business will always have game changers for the taxpayers to finance.

In the 60s it was multipurpose.
In the 70s it was turf and domes.
In the 90s it was retro.

Blah blah blah.

I remember when Ford Field was shiny and new it looked so awesome. Now it's just a big box.

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12-11-2012, 01:02 PM
  #123
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Originally Posted by Buck Aki Berg View Post
**Personal bias - I support the idea of public money to partially pay for such projects**

It's not a matter of a "going rate", it's a matter of obsolescence. The only reasons the Fourms and Gardens of the NHL lasted for 70-80 years was because there was no game-changing advancement in stadium design over that time. But once other buildings sprouted up with club seating and suites (not to mention being more architecturally pleasing), they had to be done away with in the interest of staying competitive - not only in terms of revenue for sports teams, but also in terms of attracting top-end touring acts.

If the stadium-building boom of the 90s had happened 30 years prior, we would have lost all the storied O6 buildings back in the 60s. Likewise, had places like JLA and Rexall been built in the 30s and 40s, they would have had half-century-plus lifespans as well.

We saw the same thing in baseball - Camden Yards was a game-changer in stadium design, and many of the parks built afterwards took on elements of this new design. As a result, many ballparks that weren't very old at all became obsolete (Three Rivers Stadium, the Kingdome, Veterans' Stadium, and Fulton County Stadium all closed their doors after 35 years or less), in addition to places like Tiger Stadium and Comiskey Park which were much, much older.

It's a very valid point as far as staying competitive with the revenue streams you can generate and so on. However, and this is key for Detroit and Michigan, the economic cycles that allowed these projects are no more. The 1960s were probably at the plateau portion of the postwar boom, with the 1950s having having had the greatest economic expansion phase. The Energy Crisis of the 70s and high cost of capital of the 80s, plus recessions, brought a chill to those markets. Enter the 90's economic bubble, and yes, everyone went nuts. Capital was cheap, but it was even cheaper for municipalities and governments in general. It went beyond just 'needing' a new arena, but into the realm of the ostentatious, living fat off of someone elses money (isn't that the definition of the bubble).

If you didn't get your stadium before the economy collapsed in 2008, you're in a much tougher spot economically. Maybe the Ilitches know this and thus the focus on financing most of the cost privately, but it's possible to trim back the scale a little bit--- does it have to have everything? For anyone who has ever built a house, it's the same thought process. I guess you can use oak instead of Brazilian cherry; aluminum windows and not solid wood or steel; ceramic tile and no travertine, trim off some square footage too while you're at it. Americans are space hogs after all.....

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12-11-2012, 02:13 PM
  #124
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If you didn't get your stadium before the economy collapsed in 2008, you're in a much tougher spot economically. Maybe the Ilitches know this and thus the focus on financing most of the cost privately, but it's possible to trim back the scale a little bit--- does it have to have everything? For anyone who has ever built a house, it's the same thought process. I guess you can use oak instead of Brazilian cherry; aluminum windows and not solid wood or steel; ceramic tile and no travertine, trim off some square footage too while you're at it. Americans are space hogs after all.....
That's an ambiguous question - in what way do you mean "have everything"? Your examples suggest that you mean that it doesn't need to be something shiny and spectacular, while the press releases have suggested that they're looking for a building that functions beyond a home for pro sports.

If you're asking if they need something shiny, my answer is "sort of". I work for the Canadian government, and all internal expenses have to be justifiable to taxpayers. As a result, my physical work environent (cubicles, office space, etc.) is dreary, sterile, and depressing, as extra expense to make an insipring workplace can't be juustified. If we do the same thing to a stadium, we end up with a bland monolith that people will only frequent if they have to. Surely there has to be a balance between value for money and having something that reflects well on the levels of government that contributed to it.

If you're asking if the extra expense to construct a building that's used beyond professional sports is worthwhile, my answer is a resounding yes. If they can get some added functionality out of the building, and the cost of adding it is proportionate to that functionality, they'd be silly not to. From what I've heard, JLA is a dead zone if there's not a hockey game or a concert on, and having that kind of space in the centre of the city that goes unused except for a few hours a week is poor urban planning.

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12-11-2012, 03:20 PM
  #125
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That's an ambiguous question - in what way do you mean "have everything"? Your examples suggest that you mean that it doesn't need to be something shiny and spectacular, while the press releases have suggested that they're looking for a building that functions beyond a home for pro sports.

If you're asking if they need something shiny, my answer is "sort of". I work for the Canadian government, and all internal expenses have to be justifiable to taxpayers. As a result, my physical work environent (cubicles, office space, etc.) is dreary, sterile, and depressing, as extra expense to make an insipring workplace can't be juustified. If we do the same thing to a stadium, we end up with a bland monolith that people will only frequent if they have to. Surely there has to be a balance between value for money and having something that reflects well on the levels of government that contributed to it.

If you're asking if the extra expense to construct a building that's used beyond professional sports is worthwhile, my answer is a resounding yes. If they can get some added functionality out of the building, and the cost of adding it is proportionate to that functionality, they'd be silly not to. From what I've heard, JLA is a dead zone if there's not a hockey game or a concert on, and having that kind of space in the centre of the city that goes unused except for a few hours a week is poor urban planning.

Well, if you consider the cost to build some other venues in the recent past:

Prudential Center: $375 in 2007
Jobing: $220 in 2003 ($278 in 2012 dollars)
Xcel: $130 million, ($175 million in 2012 dollars)
Consol Energy: $321 million in 2010 ($350 million in 2012 dollars)

These are all multipurpose arenas.

What are you getting for the additional $300 MM?

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