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A $40 million Wayne State University business school named after Mike Ilitch will be built near the new Red Wings arena, a stunning coup for the university and the billionaire Ilitch family, which aims to reshape 45 blocks near downtown.

A source familiar with the plan said the new Mike Ilitch School of Business will be built at the southwest corner of Woodward and Temple. The Ilitches intend to donate the land and $35 million to build the school plus a $5 million endowment.

The school will rise one block north of the state-of-the-art arena currently under construction. The 18,000-seat multipurpose venue, being built between Woodward and Cass, is slated to open in 2017.

The business school, which may take up an entire block, will be 120,000 square feet. It’s just one in an expected string of major developments the Ilitch family may announce over the next year as it pursues its goal of creating a densely populated, stable area that could be bigger than the current downtown. Big sections of the area now are blighted or vacant.

The Ilitches have committed to invest at least another $200 million for other developments in the district beyond the arena. The entire project has an estimated economic benefit of $1.8 billion, officials said.

A spokesman for the Ilitch companies declined to comment late Tuesday. Wayne State spokesman Matt Lockwood said he couldn’t confirm the deal, but added the university was planning a special event on Friday.

Mike Ilitch is owner of the Detroit Red Wings and Detroit Tigers. He and his wife, Marian, co-founded Little Caesars Pizza.

Last year, Mike and Marian Ilitch gave $8.5 million to Wayne State’s School of Medicine. That gift will create the Ilitch Chair for Surgical Innovation and establish a fund to support research and development in surgical technologies.

Within the WSU School of Business Administration, the possibility of the move has been openly discussed among faculty and students for more than a year. Dan Gilbert’s Bedrock Real Estate Services also had pursued Wayne State’s business school. In January, WSU officials told The Detroit News the Ilitches had taken the lead.

WSU President M. Roy Wilson has championed the idea since he took office in 2013. He sees Wayne State having a role as a leader and catalyst for economic growth in Detroit.

Much of the non-arena projects in the 45-block district have yet to be announced.

Three that are known:

■The new Little Caesars Global Resource Center, to be built on Woodward at Columbia, that will be the headquarters of the global pizza chain. Work is expected to begin soon on the eight-story building next to the Fox, which is Little Caesars’ current headquarters. The new building will double the pizza chain’s space and could add 600 workers downtown.

■Up to 300 new apartments across from the Fox and in front of Comerica Park, home field of the Tigers. A new structure would be built on what are now surface parking lots along Woodward and Montcalm. The deal includes buying land from St. John’s Episcopal Church. The historical church, on Woodward and the Interstate 75 service drive, owns part of the parking lots.

■Restoration of the historic former Eddystone Hotel, across the freeway from the new arena, into 100 rental apartments. The 13-story Eddystone is on the northwest corner of Park and Sproat.

While those three developments represent at least $100 million in new investment, they cover little territory in the planned 45 blocks of projects. The Ilitches’ Olympia Development of Michigan continues to spend millions to buy land in the area.

Olympia Development and various other Ilitch companies are the fifth-largest downtown property taxpayers, with a total of $15.5 million in taxable property value, according to city economics officials. Any of the ancillary developments will be taxed.

At a public meeting last month, Olympia officials revealed they may want to double the width of Temple Street between Cass and Woodward in order to accommodate traffic flow. Temple and Woodward is the location of the new school of business.

The plans were revealed to the Detroit Historic Designation Advisory Board. The council eventually must approve the district.

The Ilitches and a holding firm they have used to buy other properties are gobbling up parking lots and buildings around the Masonic Temple, which is just two blocks from the arena. Since last year, millions of dollars have been paid for surface lots, a warehouse and an empty former church on and around Temple.

laguilar@detroitnews.com

Detroit News Staff Writer Mark Hicks contributed to this report.

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