$450M Red Wings arena to keep away topless clubs, other businesses
Detroit — New details of the $450 million new home ice for the Detroit Red Wings unveiled this week outline everything from the footprint of the arena, to the number of residences that could be around it and types of businesses not wanted in the area — topless clubs, bail bonds and tarot card readers, to name a few.
Next week, Olympia Development of Michigan is going to “launch” the arena district, according to an Olympia Development invitation. That presumably means work begins on the site just north of downtown. The bowl-like arena is expected to be finished in summer 2017.
“It will be the tightest, most intimate bowl in the NHL,” said Steve Marquadt, a vice-president at Olympia Development on Tuesday. Olympia Development is the real estate arm of Red Wings’ owner Mike Ilitch.
This week, Olympia Development is seeking various approvals, such as zoning changes, from Detroit’s Downtown Development Authority and City Council in order to move forward. On Tuesday, the board of the downtown development authority approved modifications in its agreement with Olympia to keep the development on track. The development authority is part of the Detroit Economic Growth Corp.
On Thursday, the details will also be shown at 5 p.m. to the Detroit City Council at a public meeting. The arena is the center of a planned $650 million, 45-block transformation of a mostly gritty, undeveloped area on the northern edge of downtown.
“This is the first of five distinct new neighborhoods announced by the Ilitch organization in July,” reads the information provided by Olympia Development of Michigan to the city.
The details being revealed this week are specifically for the arena district or “neighborhood,” meaning the actual venue and the surrounding footprint.
The arena has a “deconstructed” design, referring to its use of separate buildings surrounding the venue. Olympia Development will control those buildings and use them for a mixed-use development. The ban on types of businesses outlined Tuesday refer to Olympia-controlled buildings around the arena and not the entire 45-block entertainment district.
The arena district is bounded by Woodward Avenue on the east, Henry Street on the south, Clifford Street on the west and Sproat Street to the north. Renderings show a glass-roofed concourse and a roof emblazoned with the Detroit Red Wings logo.
Key features of the arena district include:
■Event Center/Arena footprint: About 785,000 square feet; 12.37 acres.
■Seating for Event Center/Arena: About 20,000.
■Bowl of Arena/Event Center: The bottom elevation of the bowl is about 40 feet below grade. The bowl rises about 75 feet above grade, the height of an eight-story building.
■Piazza: Central gathering space for pre-event concerts as well as smaller events. It will remain open to the public when there is not an event.
■Via: The glass enclosure linking the adjacent buildings to the event center/arena as part of the “deconstructed” design.
■Parking: One parking structure with about 1,200 parking spaces is being proposed.
■Transit: An M-1 rail streetcar station is planned at the northeast entrance.
■Residential: About 184 residential units with 16 townhouses and 168 apartments, ranging in size from 690 square feet to 1,365 square feet.
■Other authorized development: Dry-cleaners, brewpubs, residential, hotels, exhibition hall, offices for professional or medical, health clubs, restaurants, retail.
■Unauthorized: Pawnshops, warehouse operations, businesses that involve firearms or hazardous materials, bail bond services, topless clubs, alcohol/drug rehab clinics, psychic or tarot card reading businesses.
Plans for the arena and 45-block entertainment district have sparked accolades and criticism. Supporters call it a visionary plan that will fill in the gap between a surging Midtown and a booming downtown.
The 45-block entertainment district is as large as Washington’s Georgetown neighborhood, New York City’s Greenwich Village or Boston’s Back Bay, Olympia officials said.
Critics decry the mix of public/private funding and its sheer scope.
In 2012, 30-year bonds were approved by the state Legislature to cover construction of the arena. On Wednesday, the state is expected to give final approval to the issuing of those bonds.
In June 2013, Olympia Development and Detroit’s Downtown Development Authority agreed to a 58/42 split to pay off the construction debt.
Property and school taxes already captured by the DDA will pay $262 million. Olympia will pay $188 million. DDA funds to be used for the arena can be used only for economic development within its district. The state reimburses schools for diverted money.
Olympia keeps all revenue, including concessions and parking, and any naming rights deal. In an earlier interview with The Detroit News, Christopher Ilitch, president and CEO of Ilitch Holdings Inc, defended the way the arena was paid.
“A public-private partnership is the only way any of these type of projects work in an urban environment,’” he said. He pointed out that while The Palace of Auburn Hills was paid for by private owners, the key difference is it’s an isolated venue in the suburbs.
“The Palace gets all the revenues from parking, concessions, retail,” Ilitch said, pointing out that those sources of revenue are key to the financial success of a major venue.
Ilitch mentioned an urban venue — Nationwide Arena in Columbus, Ohio — that was funded solely by private money and ended up needing a taxpayer bailout. The arena was named for its original majority owner, Nationwide Mutual Insurance Co. In 2012, the county, city and state governments had to step in with loans.
The arena was never profitable when it was under private ownership. The original owners pushed local governments to buy the arena because they were running low on cash, and the venue is still struggling.
Olympia must spend, or get others to invest, at least $200 million in development in the 45-block entertainment district. That spending must begin no later than five years after the arena’s 2017 opening, but Olympia has promised to spend $100 million while the arena is being built.