Detroit MLS bid goes all-in on Gratiot jail site

Gregg Krupa
The Detroit News
No sites other than the unfinished jail development have been discussed for a soccer stadium, according to a Rock Ventures official.

Detroit — As 12 cities court Major League Soccer for several expansion franchises in 2017 and 2018, Wayne County is trying to turn a boondoggle into a new jail and developers see a chance for a new entertainment district.

In the coming several weeks, Dan Gilbert and Tom Gores will try to persuade the county the jail can be built on a different site from where they would like to develop an MLS stadium. They have proposed a jail on a new site and a stadium in a mixed-use development that would provide a new entertainment district for downtown.

MLS officials say there is no deadline, yet, for finalizing the 12 development proposals.

But, they said, they would need final word on stadium developments by late 2017, for the first round of expansion, and late 2018 for the second round of expansion.

The man leading Gilbert’s effort to buy the site along Gratiot and develop a jail northeast of downtown said he is confident the Gilbert and Gores’ group will have solid information on developing the stadium when MLS officials visit Detroit in May or June.

“You know, we’re very confident, but it’s a tremendous amount of work,” said Matt Cullen, a principal of Rock Ventures, a group of more than 100 companies owned by Gilbert.

“It’s incredibly complex.

“Creating a new criminal justice center, a state of the art facility, and then doing a mixed-use project and doing MLS and so on, there’s a lot of very significant facets that are by themselves very complex scenarios,” Cullen said.

Cullen led GM’s acquisition and development of the Renaissance Center, for the corporation’s global headquarters, and has helped oversee the redevelopment of the Detroit Riverfront.

The county is reviewing the proposal by Gilbert, who owns the Cavaliers of the NBA, and Gores, a billionaire private equity investor who owns the Pistons, to build a new jail and purchase the land where construction began, for the stadium and other uses.

As the review continues, Cullen said, the development team is responding to Wayne County Executive Warren Evans, the county commissioners, and others, including judges, prosecutors and sheriffs who would eventually work in the new criminal justice center.

“That’s work necessary in order to give certainty to MLS that we have a site,” Cullen said.

“We owe them some updated information, kind of in the May-June time frame. And I would expect we’ll have a lot of clarity for them by that time.

“They’ll want to know, at that time, what control we have over the site,” he said. “Is it for certain, is there open issues, or whatever.”

If the site is ultimately unavailable, Cullen said, there has been no discussion of alternative sites.

“No, we’re focused on the jail site,” he said.

“There certainly are sites in Detroit that could be attractive, as well, but our focus has been on the jail site for a lot of reasons.

“We feel it’s the best site for this use. But also, we were focused on the jail site before MLS came along,” he said. “It’s so important to change the gateway to the city of Detroit.”

Matt Cullen

Asked if Gilbert and Gores arrive at a drop dead date in 2017 or 2018 without locking up the Gratiot site, if they would forego the opportunity to bring an MLS franchise to Detroit, Cullen said, “You know, we’ll never rule anything else out, but that project is our critical focus.

“I learned a long time ago never to sort of make absolute statements, so let me just leave it that that’s where we’re focused.

“We’re confident that we’re going to be able to pull all this together.”

Eight of the 12 bidders are still seeking land, in some cases, or yet to finalize stadium plans.

“That is why we have said it’s going to take — could be — all the way through the end of this year before we’re in a position to make those selections,” MLS President Mark Abbott said.

MLS observers handicapping the expansion process say Detroit is among the frontrunners, along with Sacramento and Cincinnati, where stadium plans are already in place, and St. Louis, where voters must approve two referendums in April.

“At this time, Sacramento and St. Louis would be considered the favorites,” said Paul Kennedy, editor of Soccer America.

“Sacramento has a stadium ready to be built. The St. Louis bid is dependent on an April referendum, where recent polling was unfavorable.

“Detroit and Cincinnati would likely be next in line. Detroit’s high-profile ownership group and downtown plan certainly work in its favor.”

But the partnership proposed to own the club in Sacramento is experiencing discord.

Voters in St. Louis may well balk.

And MLS officials have made clear that while Cincinnati has its attractions, they are interested in bigger markets, too.

What MLS is looking for

In addition to a stadium, MLS officials say, three criteria are necessary.

The first, Abbott said, is “whether we believe the market has the dynamics within it to support a Major League Soccer team, both from a fan perspective and corporate and media support.”

The second, he said, is “the role that market plays in helping us achieve our overall goals of increasing national interest and national viewership.

And the third, “the strength of the ownership group,” he said.

Dan Gilbert, flanked by MLS commissioner Don Garber, left, and Arn Tellem (standing in for Platinum Equity owner Tom Gores), presents a vision of building a multi-use soccer stadium at the stalled Wayne County Jail construction site in downtown Detroit on April 27, 2016.

Of the 12 bidders, Phoenix, Tampa and Detroit are the largest media markets. Nielsen ranks the “designated market areas” as Phoenix 11th in the nation, Tampa 12th and Detroit 13th.

While the population in Phoenix continues to grow, there are signs fan support for “the four major sports” is lagging, observers say, with the MLB Diamondbacks’ attendance in decline and the NHL repeatedly working to keep the Coyotes in the league.

And the size of the Tampa media market and fan base is tempered by sharing the broadcasting market with Orlando and part of the fan base with Orlando City SC.

Meanwhile, there are some signs of the popularity of soccer in southeast Michigan.

The Michigan Bucks, from which 64 players have gone on to play in MLS, and Detroit City FC are fairly well-supported.

Detroit City, of the National Premier Soccer League, says it drew 7,000 people to a recent opening match, attendance larger than for some secondary professional leagues, like United Soccer League and North American Soccer League.

Observers say the team regularly draws 5,000.

Two exhibitions of major European soccer teams in Ann Arbor recently drew about 109,000 people each time to Michigan Stadium.

There are more than 100,000 youth players (age 5-19) in Michigan. Five state of Michigan natives play in the MLS and three have played in men’s or women’s World Cups.

“I go back to 1978 and ’79 when I had the Detroit Express playing at the Silverdome and we had crowds as high as 33,000, and at that time there were probably 5,000 children playing in Michigan,” said Roger Faulkner, a longtime local soccer promoter. “That has changed so dramatically since then.”

Cost of entry

MLS officials say their goal of attracting owners with greater financial resources, for more spending on marketing and venues, in part, was satisfied by several of the 12 bidders.

Gilbert and Gores are among the richest, along with S. Craig Lindner, the chief executive of American Financial Group, the bidder in Cincinnati, whose family is reportedly worth $1.7 billion to $2 billion.

The new owners also will spend considerably more up front. The entry fee in the league was increased to $150 million for this round of expansion. A decade ago it was $10 million.

How MLS expansion bids compare

“Of course, I’m biased, but I believe of all the candidates out there, Detroit is the best market for MLS,” said Arn Tellem, the vice chairman of Palace Sports & Entertainment, who is leading Gores’ effort and who helped return the Pistons to Detroit.

“There’s over 21 Fortune 500 companies headquartered in Michigan, which I think ranks fifth in the U.S. and number one in all the applicants applying for an expansion team.

“With Detroit’s revitalization, there’s been a strong surge of young people moving back into the city. That’s really the core of supporters for MLS.

“We bring full value to MLS,” Tellem said. “We’re not only a real asset, we’re the strongest applicant as far as those criteria.”

But, of course, the stadium will eventually be a requirement

“In order for us to select the city, they're going to have to have a finalized plan,” Abbott said.

Tellem said the Detroit ownership group would prefer a franchise awarded this year.

“We’re in it to get an expansion team, and the sooner the better,” he said. “But we’re in it until at least we know we have a team, at the end of the day.”