Bond Financing Plan Approved For New Red Wings Arena, Topless Bars, Tarot Card Readers Prohibited In Area
By Edward Cardenas
DETROIT (CBS Detroit/AP) - The city's Downtown Development Authority has approved the bond financing plan for an entertainment district that will include a new 18,000-seat hockey arena for the Detroit Red Wings.
The authority says Tuesday that the Michigan Strategic Fund will issue $450 million in bonds for the project just north of downtown. The Michigan Strategic Fund still has to approve the financing plan, and zoning issues still have to be addressed before construction can start.
"With this decision, it won't be long before we see shovels in the ground and a transformation happening before our eyes," said Brian Holdwick, Executive Vice President for Business Development at Detroit Economic Growth Corporation, which negotiated the deal for the DDA, in a release. "The district is going to be an exciting place to be, as well as a great job creator for Detroiters and Detroit-based businesses."
The Michigan Strategic Fund will issue two series of 30-year bonds that total $450 million for the 785,000 sq. ft. center that will seat 20,000 people and will be home to the Red Wings, and events throughout the year.
According to the Detroit Economic Growth Corporation, the interest on the $250 million in Series A Bonds will be tax-exempt because a special DDA Tax Increment Tax capture of property taxes within the district will be used to retire them. The interest on the $200 million in Series B Bonds will be taxable because they will be paid off by an Olympia Development of Michigan.
Olympia additionally will invest an additional $200 million in new residential, retail and office development in five distinct neighborhoods in an approximately 45-block area that reaches from Grand Circus Park to Charlotte St. between Woodward Ave. and Grand River Ave., according to a release. This area would be as big as Georgetown, VA, or Greenwich, NY.
To see artist renderings of the stadium, and development areas, click here.
Overall, at least 56 percent of the total district development costs will be privately funded, the release stated.
"Today's meeting was an important next step in this public-private partnership that will create a world-class sports and entertainment district in Detroit," said Christopher Ilitch, President and CEO of Ilitch Holdings, in a release. "This initiative will produce 8,300 construction and construction-related jobs, and deliver $1.8 billion in economic impact to our city, region and state. We appreciate the ongoing efforts of the DDA, MEDC and others toward the transformation of this key area in downtown Detroit."
In documents submitted to the Downtown Development Authority, prohibited uses of the events center in for dry cleaning plant, funeral parlor, erotic dance club, house of worship and tarot card readers.
Officials with Olympia Development are expected to provide additional details of the facility Thursday at a meeting of the Detroit Planning Commission.
Mike Ilitch has said the arena will open in 2017.
TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.