Wednesday, September 24, 2014

New Red Wings arena. A huge scam

First of all, there's not a damn thing wrong with Joe Louis Arena. It's only 35 years old, structurally sound, has no obstructed view seats, and all the amenities, including luxury suites. Too boot, it's served by the "people-mover", a mini-railroad mass-transit system that snakes around downtown Detroit with stops at or near various places of interest.

But evidently, this isn't good enough for the Ilitch family, which own the Red Wings. They want a brand new arena. Why? Likely a couple reasons.

The "Joe" is located on the Detroit riverfront. Once the "hot spot" in town, it is no more. That honor has passed on to the "Fox" district. It includes the Fox theater itself (which Ilitch owns), the Fisher theater, Comerica Park (which Ilitch also owns), and Ford Field, amongst other attractions. The Fox district is to Detroit what the strip is to Las Vegas. What Steve Wynn is to Vegas, Mike Ilitch is to Detroit. And the pizza man wants another sports palace built in his high-priced stomping ground to house his hockey team. Remember how the Jeffersons were so proud of movin' on up to the East Side? It's like that with Ilitch and the Fox district. But unlike Ilitch, George and Weezie didn't own the building. A slight difference.

And, of course, the finances. It always boils down to the money. Though a commenter on this site said Ilitch would be paying 81% of the cost for said new arena, further research suggests otherwise. It appears he will only cough up roughly 53% of the estimated $550 million. And you just know there will be cost overruns, because there always are. After all, when's the last time you heard of a major project like this coming in on time and on budget? It NEVER happens. So let's say $600+ million.

And what of the remaining 47%? Who pays for that? That's where things get really complicated. The deal on the table so far involves everything from tax-exempt bonds, to 30-year bonds, to property taxes, to school taxes, and money that would have gone to pay for city services like police and fire. Throw a huge bank in the mix while all this money is subjected to being "captured" by one entity or another -- and good luck sorting it out. Even the powers that be have admitted it's somewhat "convoluted". In other words, the average tax-payer doesn't have a prayer of sorting it out. But you can bet he/she will wind up paying for a great deal of it in the end. Such is the way billionaires operate these days.

Often, a legal procedure called "eminent domain" comes into play. By definition eminent domain is The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.

Eminent domain is a necessary evil for serving the general welfare of the public. Take I-75, for example. It runs from Miami to Sault Ste. Marie in Michigan's northern peninsula, some 1786 miles. No doubt, countless thousands of people had to forfeit their houses/properties along the way for this interstate to be constructed. But it truly serves the public good. Millions of vehicles traverse it every year.

But though technically allowed under the above definition, it just seems wrong that a "private person" (see Ilitch) can use the same to commandeer private property in his pursuit of building an unnecessary new bauble. It would be one thing if he was paying for 100% of it all, and giving the evictees due compensation for their forced forfeitures. But he won't be. Given the further above cluster**** when it comes to financing, expecially considering the cesspool of how money moves around and disappears in Detroit, one way or the other I suspect the taxpayers will be on the hook for at least $300 million. 

And that's just wrong. If Ilitch wants a new castle for his hockey team -- then he should pay for it -- ALL of it. It's not like he can't afford it. 

Remember the late Bill Davidson? He owned the Pistons. Sick of Detroit, he moved them to the Pontiac Silverdome, which was the recently constructed stadium for the Detroit Lions. Realizing the "sight lines" weren't so hot for basketball, Willie D bought up a big chunk of land out in the burbs and built the Palace -- all with his own money. He likely could have leaned on politicians to soak the taxpayers -- but he didn't. That was a class act by another very rich guy. The Palace remains a state of the art facility to this day. As does Joe Louis Arena. Whether the Pistons or Red Wings are competitive in their respective sports or not is irrelevant to this conversation. A new arena isn't going to make them any better.

Methinks one Mike Ilitch should take a page out of Davidson's playbook. If he wants a new arena, then pay for it. Lock, stock, and double what the properties of the evictees were worth. No shenanigans with various bonds and taxes that will eventually land at the feet of the very same people he'll want to patronize his latest creation, to pad his already bulging bank accounts even further.

Better yet, build it out in the burbs like Davidson did. Let's get real. Given the outrageous cost of Red Wings tickets, and the state of Detroiters in general, not a whole lot of them can afford to go to the games anyway. Most of the attendees have come from the more affluent suburbs for many years now. And the guess here is, given a choice, they would rather not have to go to downtown Motown to watch a game.

But in the end, sometimes there's no getting away from the greasy factor. Whether it's politics, an owner's hair, or the product that made him rich in the first place.......


  1. Here's some more ammo for you: The Detroit Lions paid for 75% of publicly-owned Ford Field. The city of Detroit owns a stadium that was mostly built by private funds! If Illwelch wants a new arena, he better pay for it out of his own pocket. That includes infrastructure!


    1. Couldn't agree more, Mach, but it's the Fords. The same people that gave us the Edsel, Pinto, cars with exploding tires, Matt Millen, ridiculous high draft choices, and a parade of clown coaches over the years. They inherited Henry's auto empire. Ilitch is a self-made pizza billionaire, though why a man of Macedonian heritage would name his stores after ancient Roman emperors is a good question. They didn't even HAVE pizza back in those days. It was an American creation. Nevertheless, methinks Ilitch is a whole lot shrewder than the Fords. Bottom line? I have little doubt Joe II will be built and the people will get the shaft in the end, because that's just the way it works these days.

  2. The problem with the Fords is that they are too nice to be sports owners. They're too loyal to incompetent employees.