Sunday evening, John Oliver used the main segment of his HBO show, Last Week Tonight, to harshly critique public funding of sports arenas in general, and Detroit Red Wings owner Mike Ilitch specifically for relying on public contributions to the Wings' new stadium. Oliver chastised Ilitch for accepting $250 million for the project from the city of Detroit which entered into the deal just days after declaring bankruptcy in 2013. While the city has only just begun to recover financially, Ilitch's net worth is estimated at $5.1 billion, leading many to ask why the city needed to help fund the stadium at all.
Monday, the Red Wings released a statement defending the deal, and claiming "The majority of this development is being privately financed, and no city of Detroit general funds are involved whatsoever." While the statement is factually correct to some extent—the city's general fund isn't involved—the part about a "majority" of the project's funding coming from private entities is a bit suspect. According to Crain's Detroit Business, of the $450 million in bonds issued to pay for the project, $250 million will be paid off by Detroit's Downtown Development Authority (DDA) via its ability to levy property taxes. While the Red Wings' statement about city's general fund is a clever piece of misdirection, the narrative of majority private funding isn't supported by facts. The DDA, a government agency, bears responsibility for more than half the funding.
Ilitch also likes to cite a University of Michigan study saying that the project will bring 8,300 construction jobs and 1,100 permanent jobs, and create $1.8 billion in economic impact. As Oliver stated in his piece, however, sports venues seldom deliver on promised value. And the Ilitches and the team will take most of the profit from a number of the stadium's plum assets, including naming rights to the new facility. Between the cost to the city for the project, and the destruction of many historic Detroit buildings to make room for the arena and its attendant shopping district, many Detroiters are wondering who really stands to profit most from the deal.
·Oliver Rips Red Wings [Daily Free Press]
·Detroit Rink City: The Ilitches' Grand Plan to Supersize [Crain's Detroit Business]
·Hockey Arena Still a Go Despite Bankruptcy [CNN Money]
·Details on Funding the New Red Wings Arena [Crain's Detroit Business]
·John Oliver Calls out Ilitch [MLive]
·Arena District Purges Three More Historic Buildings [Curbed Detroit]
·How the Red Wings Took Hockeytown for All it Had [Deadspin]