The Detroit Downtown Development Authority (DDA) has approved a memorandum of understanding among the DDA, Olympia Development of Michigan and Wayne County that describes the proposed public and private financing and location for a new sports and entertainment district Downtown.
The district would include a $450 million sports and entertainment centre and $200 million in new residential, retail and office development in an approximately 45-block area that generally reaches from Grand Circus Park to Charlotte St. between Woodward Ave. and Grand River Ave.
The multipurpose event centre is anticipated to be an approximately 650,000 sq. ft. facility with 18,000 seats that can accommodate Red Wings hockey games, as well as other sports and entertainment events year-round. It will also include premium seating and amenities of a contemporary first-class professional sports and entertainment complex.
The new district anticipates expanding the boundaries of the DDA several blocks north of I-75 and west of Woodward Ave. to accommodate the centre, redeveloping several properties, building new parking decks and mixed-use developments.
The new development is anticipated to create approximately 5,500 jobs for the events centre alone and approximately 8,300 jobs for the entire residential and commercial mixed-use district. Michigan can anticipate an estimated economic impact of $1.8 billion from the completion of this project.
George W. Jackson, Jr., President and CEO of Detroit Economic Growth Corporation, which managed negotiations on behalf of the DDA, said:
We have outlined a deal that will do far more than build new home ice for the Red Wings. When it’s done, it will redefine Detroit’s Downtown. We will have incorporated all three of our major league sports venues into an exciting, walkable sports and entertainment district that will rival anything in the world. A project of this scale requires strong commitments from both private and public partners, and that’s exactly what this agreement represents.
The primary public funding mechanism for the $450 million centre is a continuation of a projected $12.8 million-per-year property tax capture authorized by the State Legislature last December. The DDA is also expected to contribute an average of just over $2 million per year. Olympia Development is expected to contribute $11.5 million per year. All three of those commitments would be used to retire 30-year private activity bonds issued through the Michigan Strategic Fund. Additional private sources are expected to fund the remainder of the $650 million total investment anticipated for the entire district.
Overall, approximately 56 percent of the total development costs of the district would be privately funded and approximately 44 percent would come from public economic development funds requiring no new taxes. The DDA would own the events centre and Olympia Development would manage it under a long-term contract. Before that concession management agreement can be finalised, the City of Detroit has to approve the expansion of the DDA boundaries and other matters related to the development.
The Economic Development Corporation of the City of Detroit has to review and amend plans for the area and transfer property it owns. Wayne County, the State of Michigan Strategic Fund and others also have to approve aspects of the development plan before construction can begin. Jackson added:
Today’s agreement represents one step among many that all the partners have to take together, but it is a very significant step.