As reported by Crain’s Detroit, family reps and state economic-development representatives met in November to discuss such a plan. From Crain’s:
The fund, which can sell low-interest bonds for projects, is an autonomous board within the quasi-public MEDC and was created in 1984 to promote economic development. The fund owns the Cadillac Place office building in Detroit’s New Center area and the Michigan House of Representatives Building (Anderson Office Building) in downtown Lansing, the MEDC said.
The Ilitches appear to be interested in a similar arrangement for an arena to replace aging, city-owned Joe Louis Arena.
That the Ilitches are seeking a replacement for Joe Louis Arena is nothing new: they’ve been on the lookout for a location and business plan for years and years. In December the family announced an ambitious $650 million mixed-use development that would include retail, residential and a new arena reportedly to be designed by HKS, but the announcement had no data about financing or timeline.
Still, there’s an indication that this effort could be different. Representing the Ilitches, among others: attorney William Danhof, who happens to be bond counsel for the state of Michigan.
There are several advantages to have the state own the arena and have Olympia Development, the Ilitch family’s development firm, put money into the associated construction. One is a pure cost consideration: in general a public agency like the Michigan Strategic Fund can borrow money at a much lower interest rate than can a private firm. Second, Olympic Development can avoid any property taxes on the arena portion of the project.
This is still a preliminary pitch for a new Detroit Red Wings arena: there’s no plan in place, and you can expect some public opposition to using public funds to benefit billionaires like Mike Ilitch and his wife, who generate billions annually from their various business ventures (the Detroit Tigers, Little Caesar’s, casinos, etc.). The economic situation in Detroit may be better than five years ago, but no one thinks the city is out of the woods.