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What people misunderstand when it comes to the new Red Wings arena in relation to Detroit’s bankruptcy


Yes, Detroit has to keep its head down while walking down the sidewalk, and, yes, it doesn’t go out much anymore, not with all the other cities giving it those looks after the bankruptcy declaration. But there is one semi-good thing that about this news: people are questioning the new Red Wings arena.

The public vs. private funding issue has been creeping out of governmental hallways and into public discussion. Now, with the Red Wings trying to use public funds in a city with the largest municipal bankruptcy in United States history (side note: We’re No. 1! We’re No. 1!), the discussion moves up a stage. Some are at least asking, ‘What’s going to happen?;

The answer: the plans are still on. In fact, the state just approved up to $450 million in bonds to go to the new arena. (Why you need $450 million in bonds when you’re only supposed to contribute, at maximum, $346.5 million is a question we’ll save for another time.)

There are plenty of supporters. Detroit needs economic activity, they say, and this will provide that. In some cases, we have intelligent people saying this arena, which will likely make Illitch a lot of money and the city only a little, is even more important. 

But the Ilitch arena may be exception, coming as it does at a pivotal time for Detroit. “Sports team have a hold on the civic pride of places,” he said, and this is clearly a time where the city’s civic pride is being tested.

Let’s ignore the call for an at least $284.5 million “civic pride” project in a bankrupt city. Let’s ignore that while the money was slated  specifically for the arena and if it isn’t used it would go back to the state, the state could turn around reallocate that money back into to Detroit if it wanted to. Let’s ignore that civic pride can come from a baseball team that wins a World Series or a hockey team that wins the Stanley Cup, whether it’s in a new arena or old.

Tom Walsh (the writer of the quoted article), and others like him, including Governor Rick Snyder, who is “fired up” about giving a billionaire free money, seem to be missing the point.

This isn’t an all-or-nothing,  Ilitch-either-gets-his-arena-as-is-or-Detroit-doesn’t-benefit-at-all narrative. Ilitch wants the arena because he can charge higher ticket prices and make more money, and — based on the current plans — wants it downtown, in a city he’s been on the record as saying he wants to rebuild.

Obviously the less public money, the less profit for Ilitch, but I bet the arena makes business sense for Olympia Entertainment whether the public finances the whole thing or they have to fund the entire entity themselves.

So why wouldn’t Detroit use the only leverage it has in this bankruptcy — public pity — to have the city force the owner’s hand for once, and not vice versa?

Reject the current proposal in whatever votes remain before construction, then have the city pull out a significant amount of its funds. Go to Ilitch and say “Hey, our streetlights don’t work and our ambulances are out of service. You’re going to make a boatload off this new arena. How about you build it on your own, or at the very least we cut off a few dozen million from our investment?”

He’ll be angry. Some suburb, Auburn Hills, or Grosse Pointe or Bloomfield Hills will give him a sweet deal, probably much better than the even the current plans.

Make Ilitch show he’s not like the other owners, the ones that chase the money to the suburbs at the first opportunity. Make him show he’s as committed to revitalizing the city as he says he is. Make him sit in front of reporters and answer the questions about how he abandoned the city he loved at it’s lowest point. 

One comment on “What people misunderstand when it comes to the new Red Wings arena in relation to Detroit’s bankruptcy

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