Data concerning the taxing district surrounding Little Caesars Arena has been released, showing the properties key to the project’s funding.
As part of the funding model for Little Caesars Arena–the future home of the Detroit Red Wings and likely the Detroit Pistons–the Detroit Development Authority issued $250 million in bonds. Those bonds are set to be paid off by increases in revenue captured from a special tax district, which will include numerous properties surrounding the downtown venue.
Crain’s Detroit Business recently analyzed the numbers, and came away with a few key findings. The General Motors headquarters is currently the highest property tax assessment within the district, with a recent assessment putting the complex at $109.5 million. Billionaire and Cleveland Cavaliers owner Dan Gilbert, meanwhile, will have several of his properties within the taxing district.
A native of Detroit, Gilbert has been playing an increased role in redeveloping sections of the city’s downtown area. Between the properties he owns and some of the projects he has in the works, including a proposed MLS stadium, his developments will account for some of the more prominent revenue generators within the district.
Gilbert, for his part, says he is behind Little Caesars Arena. More from Crain’s Detroit Business:
“We are supportive of tax revenue being allocated to significant and important developments like the Little Caesars Arena and The District Detroit. The taxes we, and many other businesses, pay help fund numerous services and projects downtown and in every neighborhood of Detroit,” Rock Ventures said in a statement.
“New developments create new jobs and new taxes that increase the city’s revenue. Like wealth, the economic activity that is responsible for tax revenue is created. Without substantial new vertical construction in Detroit, businesses will be unable to grow, create new jobs and generate new tax revenue. When an investment is made into the development of large construction projects that become filled with those businesses creating employment opportunities, then the entire ecosystem benefits tremendously.”
Gilbert is proponent of taxes — including sales and income — being diverted for economic development. He backed legislation, which died last week (for now) in the state House, that would have captured new sales and income tax revenue that is generated at mixed-use developments from residents and customers. Projects would have qualified if they were located on contaminated property, deemed blighted or obsolete or are historic structures that wouldn’t be redeveloped if not for the incentive. In Detroit, developers would have to put up at least $500 million in private funding.
According to Crain’s findings, Gilbert is tied to four of the top 10 taxpaying properties within the DDA’s taxing district for the proposal. The area also includes properties owned by the Illitch family, owners of the Red Wings and Little Caesars Arena operator Olympia Entertainment.