DDAuthority approves $650 million framework for downtown events center and entertainment district.
- Category: Detroit
- Published on Wednesday, 26 June 2013 09:41
- Written by The Michigan Chronicle
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Detroit Downtown Development Authority approves $650 million framework for downtown events center and entertainment district.
The Detroit Downtown Development Authority (DDA) has approved a memorandum of understanding (MOU) among the DDA, Olympia Development of Michigan (ODM) and Wayne County that describes the proposed public and private financing and location for a new sports and entertainment district downtown.
The district would include a $450 million sports and entertainment center and $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.
The multipurpose event center is anticipated to be an approximately 650,000 sq. ft. facility with 18,000 seats that can accommodate Red Wings hockey games, as well as other sports and entertainment events year-round. It will also include premium seating and amenities of a contemporary first-class professional sports and entertainment complex.
The new district anticipates expanding the boundaries of the DDA several blocks north of I-75 and west of Woodward Ave. to accommodate the center, redeveloping several properties, building new parking decks and mixed-use developments.
DTE Energy chairman, president and CEO Gerry Anderson said, “This is a catalyzing step for the city. This area, much of which is underdeveloped, is now within easy walking distance to three major sports venues, the Theater District and two casinos and it is minutes from the Business District. This area should be incredibly attractive for businesses, retail and residential development.”
DTE Energy, which employs 10,000 people including 3,000 at its downtown headquarters, is part of a neighborhood revitalization campaign that is adjacent to where the proposed development is to be located. DTE Energy recently acquired several properties in the area with a goal of helping to spur the pace of redevelopment in this area. “We’re proud to be a part of downtown Detroit’s redevelopment, and we support public-private initiatives like the one announced today that would accelerate that,” said Anderson.
The new development is anticipated to create approximately 5,500 jobs for the events center alone and approximately 8,300 jobs for the entire residential and commercial mixed-use district. Michigan can anticipate an estimated economic impact of $1.8 billion from the completion of this project.
“We have outlined a deal that will do far more than build new home ice for the Red Wings. When it’s done, it will redefine Detroit’s downtown. We will have incorporated all three of our major league sports venues into an exciting, walkable sports and entertainment district that will rival anything in the world,” said George W. Jackson, Jr., president and CEO of Detroit Economic Growth Corporation, which managed negotiations on behalf of the DDA. “A project of this scale requires strong commitments from both private and public partners, and that’s exactly what this agreement represents.”
Other projects that could be part of the $200 million additional development named in the MOU include:
• A 140,000 sq. ft. new mixed office and retail development on Woodward at Sproat St.
• A 25,000 sq. ft. office and retail development along Woodward
• Several parking structures with a total of 25,000 sq. ft. of retail
• Renovation of the Detroit Life Building at 2210 Park Ave. for 3,645 sq. ft. of retail and 35 residential units
• Renovation of the Blenheim Building at 81 W. Columbia St. for 1,833 sq. ft. of retail and 16 residential units
• Renovation of the building at 1922 Cass for 70,000 sq. ft. of office space
• A new hotel-retail development with a 20,000 sq. ft. ground floor
• Parking lots and other amenities
The primary public funding mechanism for the $450 million center is a continuation of a projected $12.8 million-per-year property tax capture authorized by the State Legislature last December. The DDA is also expected to contribute an average of just over $2 million per year. Olympia Development is expected to contribute $11.5 million per year. All three of those commitments would be used to retire 30-year private activity bonds issued through the Michigan Strategic Fund.
Additional private sources are expected to fund the remainder of the $650 million total investment anticipated for the entire district. Overall, approximately 56 percent of the total development costs of the district would be privately funded and approximately 44 percent would come from public economic development funds requiring no new taxes.
The DDA would own the events center and Olympia Development would manage it under a long-term contract. Before that concession management agreement (CMA) can be finalized, the City of Detroit has to approve the expansion of the DDA boundaries and other matters related to the development.
Mayor Dave Bing appears to be amenable to the deal and said, “I’m extremely pleased that a framework has been established for the development of a new downtown arena and a commercial, entertainment and residential district that will continue to add momentum to the transformation of our city.”
The Economic Development Corporation of the City of Detroit has to review and amend plans for the area and transfer property it owns. Wayne County, the State of Michigan Strategic Fund and others also have to approve aspects of the development plan before construction can begin.
Jackson added, “Today’s agreement represents one step among many that all the partners have to take together, but it is a very significant step.”
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