For New Detroit Arena, Location Isn’t Everything – Next City
The Equity Factor

For New Detroit Arena, Location Isn’t Everything

The Detroit Red Wings will leave Joe Louis Arena, pictured, for a new home financed by $284.5 million in taxpayer money. Credit: AP Photo/Paul Sancya

While reporting on my Forefront story about a new publicly funded hockey arena in Detroit, I had difficulty getting any public officials to speak on the record. An interview with Detroit Emergency Manager Kevyn Orr was “likely not a possibility.” Calls to Michigan Gov. Rick Snyder’s office were not returned.

Speaking at the Manhattan Institute on Monday, Snyder finally responded. I took to Twitter to put the question to him: How is a new hockey arena an engine for economic development? Is it a smart use of $284.5 million in taxpayer money?

“As an old accountant I’m always somewhat challenged on projects like that,” Snyder said. “And if it was just a project like that [a publicly funded arena], I would probably have even more skepticism. But this is a wonderful project, particularly because of where it’s located — I think that’s where it adds tremendous value.”

The new Red Wings arena is slated to open for the 2016-2017 season in the lower Cass Corridor, bridging a gap between the rapidly developing downtown business district and the Midtown neighborhood just north, which enjoys a 97 percent occupancy rate. All of those boilerplate trend pieces heralding Detroit’s revival? They usually focus on Midtown.

I have zero doubt that this makes sense from a planning perspective. For years, the lower Cass Corridor has sat vacant while neighborhoods to the south and north have seen a rise in investment and an influx in residents. The area is, as Snyder suggested, ripe for development. Dan Kinkead, a former Next City Vanguard and executive director at Detroit Future City, agrees.

“It fills a very important gulf that exists in downtown,” he told me. “And its development does a number of things: We’re putting it in a place where you have a tremendous number of existing transportation assets present and it’s going to be supplemented further by the M-1 rail line and long-term BRT system.”

The M-1 project, a light rail corridor that will run up Woodward Avenue, received good news yesterday. The Michigan Strategic Fund — the same state economic development agency that issued bonds for the arena deal — approved a $10 million loan as part of the light rail’s financing package. (Also on the docket: $6 million for demolition of Joe Louis Arena, where the Red Wings have played since 1979.)

While we’re all in agreement on the location of the new arena — again, logistically, it makes sense — I find it curious that Snyder expressed even the idea of skepticism, something public figures rarely offer in the face of stadium subsidies. But he was quick to rebuff that skepticism, justifying $284.5 million in taxpayer dollars because of the “opportunity” that a stadium on the lower Cass Corridor presents.

Kinkead, however, shares my worries about the value of public investment. “I think it’s appropriate that people consider the merit of these investments,” he said. “You’re ultimately putting on a bigger burden. Especially when there’s a use of tax-exempt bonds. I think people are right to review these things and figure out how they work.” The problem in Detroit is that it’s too late.

The Equity Factor is made possible with the support of the Surdna Foundation.

Bill Bradley is a writer and reporter living in Brooklyn. His work has appeared in Deadspin, GQ, and Vanity Fair, among others.

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