One of the many undeveloped lots in the Cass Corridor set aside for the new Red Wings arena. The MotorCity Casino is in the background. (Max Ortiz / The Detroit News)
The $650 million plan to create a 45-block entertainment district anchored by a new hockey arena for the Red Wings won a crucial victory Tuesday when the Detroit City Council approved a land transfer deal in front of a large, sometimes boisterous crowd.
Within the next few months, the public will get to see what the arena will look like, officials said. And the state will begin selling $450 million in bonds, backed by local property taxes, to pay for the new arena. It could be completed for the 2016-17 hockey season.
“This was one of the last major legislative hurdles to get through, so things can really start to get going now,” said George Jackson, president and CEO of the Detroit Economic Growth Corp., the quasi-public agency that promotes economic development in the city. The DEGC has been working on the deal for years.
The land transfer involves swapping properties between the owner of the Red Wings, the city and two quasi-public agencies.
Under the land swap deal, the Wings’ owners would get dozens of properties for $1, according to city documents. Those properties are in area within the 45-block district mapped out for the arena. The hockey arena site is bordered by Woodward on the east and Cass on the west, Temple to the north and the I-75 freeway service drive to the south, according to city documents
The land is owned by the city or the Economic Development Corp., which manages real estate sites that are available for redevelopment.
For his part, Ilitch will to give up land where the arena will be built. Olympia Development may eventually turn over 56 properties, according to city documents. The new owner would be the DDA.
By being owned by DDA, the arena property can benefit from a special pot of tax money that legally can’t be used for anything other than economic development.
The Ilitches may also eventually get vacant land maintained by Vietnam War veterans, and three scruffy blocks near the MotorCity Casino Hotel. That property, which will be held by the DDA, can be bought by Olympia at a later date for potential development. Those properties would be sold at market rate. Mike Ilitch’s organization, which owns the Wings and is spearheading the project, has also agreed to maintain and preserve Cass Park.
The 650,000-square-foot, 18,000-seat multipurpose arena is to be built on Woodward, about four blocks north of Ilitch’s Fox Theatre and Comerica Park, home of his Detroit Tigers. The 45-block entertainment district generally reaches from Grand Circus Park to Charlotte between Woodward and Grand River.
The City Council’s approval hinged on whether a majority of the nine-member panel was convinced that the arena — and $250 million in promised retail, office and residential development slated to be built around it — would bring a large number of jobs for Detroiters. The agreement passed on a 6-3 vote. Building the arena is expected to create 8,300 construction jobs and an estimated 1,100 permanent jobs.
“It’s much better than what we had originally, and certainly better than what sits in that space right now, which is nothing,” said Councilwoman Saunteel Jenkins, who was among those voting for the deal. Councilman James Tate voted against it, but nonetheless said he is excited about the development. The council, he said, “should be fighting as hard as we can to get jobs for Detroiters, especially in a city that has a 20-percent unemployment rate.”
The approval came after more than an hour of comments from the 300-plus crowd. The council meeting was moved to the larger Erma Henderson Auditorium in the Coleman A. Young Municipal Center to accommodate them. Many of those on hand were workers for companies controlled by Mike Ilitch or his wife, Marian.
A vocal minority blasted the idea of a billionaire getting public money and Olympia getting more land for just $1. Olympia has paid close to $50 million for the land it will transfer to the DDA.
Many critics also decried the tax breaks and the track record of Ilitch-controlled property downtown. About $367 million, or 56 percent, of the entire project would come from private investment. About $283 million, or 44 percent, in public investment would come through existing economic development money, requiring no new taxes.
Jerry Belanger owns the Grand Circus Park building that houses Cliff Bells and the Park Bar, which is surrounded by downtown land owned by Olympia. “I’m going to be taxed to pay for bars that (Ilitch) will open,” he said.
Others said the economic development would benefit many.
“This will be the epicenter of sports and entertainment in Michigan,” said Tom Wilson, president and CEO of Olympia Entertainment, a division of Ilitch Holdings Inc., whose portfolio includes the Wings, Tigers, MotorCity Casino Hotel and Little Caesar’s Pizza. Wilson said the development would host 400-500 events annually and draw an estimated 5 million to 7 million people to the five-block radius.