Little Caesars Arena: A Collaborative Effort

FROM: Charlotte Fisher, Director, Marketing and Communications

Nearly five years and countless DEGC staff hours culminated in the ribbon-cutting at the new Little Caesars Arena in Detroit Sept. 5, 2017. Crowds gathered under sunny skies in Chevrolet Plaza at the corner of Woodward Ave. and Henry St. to witness the monumental event, which included remarks from a variety of city and state dignitaries.

Michigan Gov. Rick Snyder called the arena and surrounding area the glue connecting midtown and downtown. Detroit Mayor Mike Duggan said the economic benefit of the project is deeply woven in the urban fabric of the city. Ilitch Holdings President CEO Chris Ilitch gave special kudos to DEGC for helping bring the project to life.

The new 20,000 seat arena is the centerpiece of a 50-block area of the city dubbed The District Detroit that will include development of office space, retail, housing and hotels.

DEGC team at groundbreaking event
The DEGC team participates in the 2015 arena groundbreaking event.

DEGC CFO & Interim President Glen Long credits the collaborative efforts of DEGC staff working with the DDA board, city government, Ilitch Holdings, and numerous private and public entities to maximize the project’s benefit to Detroit.

“What started as a hockey arena is now a world-class multi-purpose facility that unites Detroit’s four professional sports teams within a four-block area of the city core,” said Long.

“All four major sports teams haven’t been together in Detroit since 1975, and the arena opening makes Detroit the only city in America that has all of its teams downtown. The arena will now host events 225 days of the year, bringing additional economic opportunity to the city and its residents in terms of jobs and new business creation.

“The DEGC, acting as the city’s non-profit economic driver, was instrumental in every facet of the area’s development, including bond sales, construction management and innovative incentive development. The DEGC has been Detroit’s catalyst for economic growth and opportunity for nearly 40 years, and our participation in the development of The District Detroit will maximize financial benefits for all Detroiters,” said Long.

DEGC facilitates large projects like Little Caesars Arena that bring jobs and revenue to the city. Other recent investment brought to Detroit by DEGC include a $95 million manufacturing facility from automotive supplier Flex-N-Gate in the I-94 Industrial Park on the city’s east side and a $57 million Sakthi Automotive investment at its campus on the city’s west side.

In addition to helping bring the Detroit Pistons back to the city, DEGC is also working with developers on the development of the team’s new corporate headquarters in Detroit.

DEGC’s D2D Program was instrumental in ensuring Detroit businesses were a major part of the arena’s construction. Ilitch Holdings reported the following statistics regarding state and city business utilization/employment:
• 94% of construction contracts for LCA were awarded to Michigan businesses.
• 61% were awarded to companies in Detroit, totaling nearly $475 million.
• LCA represented the most hours worked on a single project by Detroiters in over 40 years.
• 836 new skilled-trades apprentices were trained during the arena construction.
• 2,000 people will be hired in post-construction jobs.
• 61% of these jobs will be filled by Detroiters.

One of those apprentices trained was Detroit resident John Perkins, now a project engineer at Barton Malow.

“You change a person’s life when you give them an opportunity to work,” Perkins said. “This project opened doors that I didn’t know existed. I’m proud to have helped build this arena alongside other hard-working Detroiters. ”

DEGC Contributions to Little Caesars Arena Development

• Led negotiation of Memorandum of Understanding approved by the DDA in June, 2013
• Led negotiation of Concession Management Agreement originally approved by DDA in December, 2013
• Managed process to amend DDA TIF plan in 2013 to allow Catalyst Development taxes to be captured to finance arena construction and to support other development in the district – approved by DDA, Detroit City Council and the Michigan Strategic Fund (MSF)
• Managed process to sell $250 million in bonds to finance the public portion of construction – approved by DDA and MSF in December, 2014.
• Monitored subcontract bidding process on behalf of the DDA throughout construction – 2015 to present
• Participated in negotiations for Memorandum of Understanding that returned the Pistons to Detroit – approved by the DDA in November, 2016
• Managed approvals of $233 million in private ancillary development in the District Detroit to date
• Managed DDA and City Council approvals of amendments to DDA TIF plan in June, 2017 to allow Catalyst Development taxes to finance arena construction changes required for the Pistons
• Managed subsequent sale of $36 million in bonds to finance the construction required by the Pistons
• Managed approvals of Brownfield tax increment financing, and real and personal tax abatements in June, 2017 to accommodate development of the new Pistons corporate headquarters and practice facility in New Center.

Supporting Small Business in Detroit

FROM: Glen W. Long, Jr., Chief Financial Officer, Interim President & CEO

DEGC’s marquee programs for Detroit small businesses — Motor City Match and Motor City Re-Store — are grabbing some great headlines, but they are just part of the array of resources DEGC can draw on to help small businesses succeed in our city.

Recently, we were able to provide Red Dunn Kitchen with gap financing — in partnership with its senior lenders — from a small pool of funds we have available from a federal grant for loans to small businesses. We also helped the owners of The Inn at 97 Winder qualify for property tax exemptions under the Obsolete Property Rehabilitation Act (OPRA).

Currently, we’re working with a group of people to provide a small business loan and a tax abatement incentive that they can use with their equity to fund their start-up, and yes, we are working with the owner of Henry the Hatter as that business considers moving to a new location.

Small businesses in neighborhoods across the city are an important part of the fabric of their communities. We’re adding staff in order to keep up with demand. At DEGC, we work hard every day to find ways to support small businesses as they open and grow in Detroit.

Process To Facilitate Pistons’ Move To Detroit Hits Milestones

As you know, representatives of the DDA and DEGC have been integrally involved in facilitating the Detroit Pistons’ relocation to Detroit. Recently we reached two important milestones in the process of gaining bond issuance approvals supporting enhancements to Little Caesars Arena for the team’s move.

The City of Detroit City Planning Commission has recommended the 2017 Proposed Plan Amendments to the DDA’s Restated Tax Increment Financing Plan and Development Plan for Development Area No. 1, which includes the Catalyst Development Project (i.e., the Little Caesars Arena and surrounding private development). Furthermore, the Michigan Strategic Fund — the entity which was responsible for issuing the 2014 bonds for the construction of the arena — approved the changes to the Catalyst Development Project set forth in the 2017 Proposed Plan Amendments.

There are more steps in this ongoing process, including opportunities for public comment. Detroit City Council has hosted public hearings to listen to comments, concerns and recommendations regarding the community impact of the Detroit Pistons’ home venue relocation to the Little Caesars Arena, and headquarters and practice facility relocation to New Center.

DEGC continues to deliver. We will keep you informed of future developments.

Flex-N-Gate investment attests to strong manufacturing in Detroit

From the desk of: Glen W. Long, Jr., Chief Financial Officer, Interim President & CEO

We celebrated a very important investment in the City of Detroit this week when top automotive supplier Flex-N-Gate hosted a groundbreaking ceremony at 7000 Georgia Street in the I-94 Industrial Center, future site of its new $95-million manufacturing facility. It will be the largest investment by an auto supplier in the City of Detroit in more than 20 years.

This is a huge win for two reasons: it proves the manufacturing industry is strong in Detroit, and it will create 400 to up to 700 new jobs in an area where new jobs are sorely needed. Flex-N-Gate has committed to hiring Detroiters and Detroit-based contractors, as well as developing a comprehensive hiring plan in conjunction with the City of Detroit Human Rights Department and Detroit Employment Solutions Corp. to help ensure permanent jobs for Detroiters. Its new facility is expected to open next year.

A key reason Flex-N-Gate was able to locate in Detroit was the tax incentives administered by DEGC through the Detroit Next Michigan Development Corporation, one of the public authorities DEGC manages.

The 189-acre I-94 Industrial Park has been under control of the Economic Development Corporation (EDC) since 2000, with EDC overseeing property acquisition, clean up and development of the land. LINC Logistics was the Park’s first major new tenant when it opened a new $30-million, 500,000 sq. ft. facility last year, immediately adjacent to the Flex-N-Gate site.

This latest investment in the I-94 Industrial Park is the culmination of a collaborative effort among the City of Detroit, DEGC and the Michigan Economic Development Corporation (MEDC), which administers incentives and programs on behalf of the Michigan Strategic Fund.

Riverfront Redevelopment is Real — and DEGC is Ready

Last week DEGC joined the Detroit Riverfront Conservancy (DRFC) and the City of Detroit to announce details of a framework plan that will preserve more of Detroit’s riverfront land for public use and create greater community access.

Highlights of the plan include:

  • Creating nearly eight acres of additional park space on the East Riverfront.
  • Increasing community through two new “Dequindre Cut” style greenways
  • Streetscape improvements to make E. Jefferson more attractive and bike and pedestrian friendly
  • Sale of publicly owned land through the release of RFPs

The plan has special significance for DEGC, because our involvement goes back more than fifteen years. DEGC staff, acting for the EDC, managed the creation of the 2003 East Riverfront Plan that envisioned the transformation of the district from obsolete industrial land to a mixed use of recreational, residential and other developments. DEGC’s project management role included work on sections of the RiverWalk and Dequindre Cut and Trail, the acquisition and demolition of cement silos, facilitating the adaptive reuse of the Globe Building and managing deals and site remediations that led to Orleans Landing, among many other projects.

All those activities required forging new collaborations with solid partners, such as the City of Detroit, Michigan Department of Natural Resources and the Riverfront Conservancy. We are very pleased that those and other partnerships are continuing stronger than ever. DEGC will continue to be a lead player in implementing the riverfront plan — starting with the release of a request for proposals for the redevelopment of the historic Stone Soap building. It’s incredibly exciting to see what’s in store, and we are grateful to be working with such great partners and stakeholders.

Use this link to download the Stone Soap RFPQ, or share the link page with others who may be interested in it.

Please take a look at the presentation of the Your East Riverfront Plan in the DEGC Reference Library.

Follow East Riverfront news at the dedicated website: YourDetroitEastRiverfront.org

The Free Press gave the story very good coverage in Thursday’s edition.