Ceremonial shovels went into the ground for the new $650 million sports and entertainment district Downtown just nine days after the Detroit Downtown Development Authority (DDA) approved the financial plan for building the new event center in partnership with the Michigan Strategic Fund (MSF) and Olympia Development of Michigan (ODM).
The DDA approved a preliminary agreement 15 months ago for developing the new sports and entertainment district around a new multi-purpose center that will be home to the Detroit Red Wings and programmed with other events throughout the year. The 785,000 sq. ft. center will seat 20,000 people.
Besides the $450 million arena, which will be home for the Detroit Red Wings, ODM is committed to investing, or causing to invest an additional $200 million in new residential, retail and office development in an approximately 45-block area that generally reaches from Grand Circus Park to Charlotte St. between Woodward Ave. and Grand River Ave. Overall, at least 56 percent of the total district development costs will be privately funded. 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 DDA vote 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. “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.”
According to the plan, MSF will issue two series of 30-year bonds that total $450 million. 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 ODM affiliate under terms of the Concession and Management Agreement (CMA) it has with the DDA. Issuing two series of bonds for one project recognizes the difference in public and private contributions that will retire them.
Executive Vice President, Business Development