Bill Bradley reports: "the Detroit Red Wings unveiled plans for their brand new publicly subsidized $450 million arena development. The arena, which promises to include $200 million additional investments in mixed-used development, will break ground in September."
"The arena itself is estimated at $450 million, of which the city is paying $262 million—by way of tax increment financing (TIF)—for construction costs. That's 58 percent, not including any cost overruns. The entire project, including the mysterious promise of ancillary investment within five years of the first puck drop, is pegged at $650 million, with $284.5 million of that coming from the TIF."
So with the city's subsidies, not to mention the $1 land transfer deal that enabled the development, one might expect Detroit to have made a better deal on the future arena. However, the project has no local hiring requirements. And there's the money the city will be losing once the team moves out of its old digs: " Under Olympia's current deal with the city for Joe Louis, where the Wings have played since 1979, the city receives roughly $7 million annually in revenue from suite sales (7 percent), food and beverage concessions (10 percent), souvenir sales (5 percent), and ticket proceeds (10 percent). But under the new arena deal, they won't have to share any of the revenues with the city. And Olympia will get all the fees from naming rights, which can rack up millions annually."