Good news citizens of Detroit. Your city might be bankrupt but at least you’ll have a brand spanking new NHL arena in the neighborhood a few years from now.
The Michigan Strategic Fund has approved $450 million worth of bonds that will finance the construction of a $650 million project that just so happens to include a new arena for the Red Wings. The project is also aimed at investing another $200 million in a 45 block area around downtown and midtown.
The instant reaction to this type of news tends to be confusion. How can a city finance such a thing after filing for bankruptcy? Governor Rick Snyder did his best trying to justify it, claiming that it would create 4380 new construction jobs, increase the tax base of the city long term and increase employment opportunities. Basically, the long term effects of improving the area will help the city get back on its feet.
The arena should be completed by 2017 and would cost $450 million (58% would be public funding, 42% private) while seating around 18,000 people. Detroit’s Downtown Development Authority would technically own the arena but the Detroit Red Wings will have exclusive rights to use and operate it.[Detroit Free Press]