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The Detroit Red Wings could be playing in a new arena by 2017 if all goes according to plan. Olympia Development of Michigan, a subsidiary of Red Wings’ owner Mike Ilitch's Ilitch Holdings, Inc., unveiled their plans for a new sports and entertainment district, combined with existing and new developments to create five new mixed-use neighborhoods in downtown Detroit.
The centerpiece of this district would be the new home of the Red Wings.
“It’s always been my dream to see a vibrant and energized downtown Detroit,” said Ilitch in the announcement. “I want people to look at Detroit’s new sports and entertainment district and see what I see: the potential for something very special. I couldn’t be more excited and proud to bring this vision to life.”
The plans set forth are ambitious and are said to include a private investment by Ilitch Holdings of more than $200 million. The project is expected to cost $650 million in total, with the difference made up by public funds which has been a source of controversy.
Last July, the Michigan Strategic Fund board, which is part of the state's economic development agency, approved up to $450 million in state-issued bonds to help finance the project that would include the new Red Wings’ arena. Considering the severe economic woes of Detroit and the state of Michigan as a whole and the Ilitches personal riches, there's reason for the uneasiness.
No money is coming out of Detroit's general fund, but tax payers are going to help foot the bill.
According to the company, its private investment, which has been accelerated to get things started sooner than later, will also include helping build up public infrastructure and make improvements for things like lighting, sidewalks and streets.
“We’ve done business in Detroit for nearly 50 years, and this is our most significant and ambitious project here yet,” said Christopher Ilitch, Mike's son and president and CEO of Ilitch Holdings, Inc.
“By accelerating our investments in important neighborhood infrastructure and new mixed-use development, we will stabilize and develop dozens of underutilized blocks, create more jobs more quickly and allow the city to spend public funds on other priorities."
When it comes to the Red Wings organization, the benefits of this project are numerous The Red Wings have played in the increasingly outdated Joe Louis Arena since 1979, but claimed the league's second-best attendance in 2013-14.
The new Red Wings arena would seat around 20,000 spectators and the team will be keeping all revenue generated within.
More details on the new arena from CrainsDetroit.com:
Olympia and Red Wings team offices will be connected to the arena, as will apartments, restaurants, retail, parking garages and other to-be-decided development. Concessions will be under a glass-covered ceiling around the venue, and a special emphasis in restaurant planning is a push for up-and-coming local chefs, including minority chefs.
The lower seating bowl and playing surface will be 32-34 feet below street level (Comerica Park is 27 feet below grade), which also means the building will not be a massive, foreboding facility that towers above everything else in the neighborhood, Ilitch said.
“It’s much more expensive to build to the depth we’re talking here,” Ilitch said. “We’re not going to scrimp.”
The lead designer is Kansas City-based 360 Architecture, which has worked on several major stadiums. A 360 Architecture spokeswoman declined to comment.
The designers are attempting to keep the loud and intimate atmosphere of city-owned Joe Louis Arena, the Red Wings’ home since it opened in 1979, but the new venue must follow the disability access and other laws that govern today’s facility designs, Ilitch said.
“Internally, we’re referring to it as one of the ‘baddest bowls’ in the NHL,” he said.
The company plans to break ground this fall on the new development that will be located near the existing homes for the Detroit Tigers (Comerica Park), also owned by Ilitch, and Detroit Lions (Ford Field), among other local entertainment attractions.
Olympia Development of Michigan claims that the new project will generate at least $1.8 billion in total economic impact, with 8,300 construction-related jobs and 1,100 permanent jobs after completion.
It’s a big bet on Ilitch and the Red Wings from both Detroit and Michigan. With the city insolvent and unable to pay creditors, an influx of cash would go a long way. But public investments in sports-related properties don’t always pay off like they are supposed to.
For the sake of a struggling city and state, it has to work.
