The American Interest
Analysis by Walter Russell Mead & Staff
Blue Solutions: Detroit Plans for $450 Million Sports Arena

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Here’s a humdinger: despite everything that’s happened, Detroit is still going ahead with its plan to build a $450 million taxpayer-funded sports arena. One might might think that the largest municipal bankruptcy filing in US history might put Detroit’s leaders into a period of modesty and introspection.

One would be wrong. CNN reports that even Michigan Governor Rick Snyder and emergency manager Kevyn Orr support sticking with the city legislature’s December vote to build a half billion-dollar hockey stadium:

“I know there’s a lot of emotional concern about should we be spending the money,” said Orr. “But frankly that’s part of the economic development. We need jobs. If it is as productive as it’s supposed to be, that’s going to be a boon to the city.” […]

“The problem behind the financial issues of Detroit has been a flight of capital to the suburban areas,” [Mark Rosentraub, a University of Michigan professor] said. “We have to bring foot traffic and investment back to Detroit. This is exactly what it needs.”

Far be it from us to recall any instance in which a city government decided to live a little by using taxpayer funds for “job-creating,” “revenue-generating,” white elephant construction projects that in the end saddled taxpayers with decades of debt (see here, here, here, here, here, and here). According to CNN, Michigan taxpayers will be on the hook for nearly two-thirds of the arena’s bill. With interest, that’s a projected $444 million in taxpayer funds over the next thirty years. And if you believe the initial cost projection won’t slowly balloon over the next several years, we’ve got a monorail to sell you.

Remember that this is the same city that can’t afford streetlights, an adequate police force, or education system to give its children a decent shot in life. The bare minimum of social services required to make Detroit anything resembling a functioning society aren’t being provided right now. A plan to bill taxpayers for hundreds of millions to build a dubious city pride project, even while the pension and health care packages promised to many of them are being gutted, deserves a second vote at minimum.

A fancy new stadium will bestow lots of prestige and publicity on public officials and make their friends in the construction unions very happy. But the citizens of Detroit should demand that their officials reconsider. One Democratic leader in the Michigan Senate gave some reason for hope: “If the vote was held today, since the bankruptcy, I wouldn’t put my money on it passing.”

[Image of sports arena courtesy of Shutterstock]

Published on July 27, 2013 3:00 pm
  • Pete

    The fools we elect to public office get off on spending money — other people’s money, that is.

    It makes them feel oh-so-important, I guess.

  • TheCynical1

    Bread and circuses.

  • Bart Hall

    It’s really about “Look what *I* did.” Politicians at all levels believe they must campaign on *visible* accomplishments.

    We have the same problem in the closest town, population 5,000 which has recently spent $4 million (borrowed) for a swimming pool, $6 million (also borrowed) to build a commercial office complex (65% unoccupied), and $91 million (you guessed it, borrowed) to purchase a Bayer facility in order to lease it to another pharma company at a rate that will never cash-flow in order to “save the jobs” of some 200 employees, exactly six of whom actually live in the town.

    • Andrew Allison

      I recommend that, like two-thirds of the residents of Detroit, the residents of the town leave, post haste!

  • USNK2

    It makes more sense (barely) for Detroit to have an ice hockey stadium than for Mayor Mike’s fourth and final Bronx boondoogle: the Kingsbridge National Ice Center, an odd choice for an historic landmark. The Kingsbridge Armory (vacant since 1996), is in a neighborhood that really could use a basketball center, or a swimming center, or an indoor track and field center; or an international food destination; or, a WalMart. Or any of the other community-generated proposals squashed by the elitists.

  • cubanbob

    Field of Dreams is what this is. That may work in Hollywood but not in the real world.

  • Karl Bock

    None of this makes sense, no matter how they try to justify it. It’s insane and they’re crazy. I just don’t get these people. It’s like the enormity of the problem has stunned them into sheer and utter stupidity.

  • Fred_Unger

    Sheer stupidity. Hopefully the creditors getting screwed in the bankruptcy can sue to stop it.

  • bpuharic

    Let’s not disturb WRM in his war against non existent unions in America. American workers have taken it in the shorts since unions were killed…but it’s still their fault

    The billionaire owners of the teams? innocent victims

    The rich always are. I’m glad WRM is here to fight for the rights of the wealthy to loot and plunder working people while blaming it on working people.

    • cubanbob

      For once you are right. Let the team owners build their own stadiums. Otherwise the cities should be first in line to get their cut of the team’s revenue until bonds are paid off. With a profit for the risk. Congress can encourage this by stripping the leagues from their anti-trust exemption and stripping these bonds from their tax exempt status.

  • EmmaZahn

    You wonder why? Ask Dan Gilbert, owner of a basketball, football and hockey team and currently Detroit’s biggest single investor and largest private employer.

    • bpuharic

      good GAWD!! WRM somehow forgot him

      Probably not a member of a union.

  • Boritz

    They should throw in a high speed rail system to go along with it. Perfect synergy no? People need a way to get to the game.

  • Jane the Actuary

    This is, really, nothing new for Detroit — the list of Big Projects in Detroit is pretty long, and civic leaders are quite convinced that this is the way to economic recovery, optics be damned. The fact that they can’t even see how bad this looks to all the investors and pensioners set to lose in the bankruptcy filing, is pretty sad, but not at all surprising. http://janetheactuary.blogspot.com/2013/07/big-projects-in-detroit.html

  • jfb1138

    Imagine if all new stadiums, buildings, centers, and the like had to be named after people selected at random out of the phone book.

    Imagine how few new ones there’d be.

  • Beauceron

    Yeah, and how about a mention that you take your life in your hands when you go into downtown Detroit– especially if you have white skin, which marks you as a ripe target. Stay home and watch the game on TV or go to see it live and maybe get shot. This is not going to revitalize Detroit. It’s just another bad plan that completely ignores the real reasons behind Detroits collapse.

  • John Williams

    Unbelievable. Like all liberals–a bunch of dilettantes sold on their own brilliance with no regard for reality.

  • slocum

    Taxpayer funded sports venues are a really bad idea everywhere. But…a lot of the comments don’t get it. This hockey stadium is not for Detroit residents (who, on average, are poor and black — pretty much the polar opposite of the hockey-fan demographic).

    Also, while Detroit is going through bankruptcy, Detroit’s downtown is, paradoxically, doing better than it has for quite a while. Dan Gilbert has been buying and rehabbing skyscrapers, hipsters have been moving into lofts, a new Whole Foods just opened. But downtown is just a couple square miles starting at the river and extending out between the Lodge and Chrysler expressways.

    Actually, right now ‘downtown’ is still two separate zones between the Lodge and Chrysler (downtown and ‘the New Center Area’). The latter contains Wayne State University and the Henry Ford Medical Center. There’s still a blighted zone between downtown and the New Center area (from the Fisher freeway to Martin Luther King Blvd). And guess where the new ‘Hockey Arena District’ is going:

    http://www.detroitnews.com/article/20130619/BIZ/306190075

    Detroit business and civic leaders don’t see bankruptcy as an obstacle to the continued development of downtown, they see it as something that will boost growth by clearing away a lot of legacy costs.

  • skhpcola

    The stadium is projected to cost around $450 million? I guarantee that it will cost over a billion dollars, and just a billion would be a miracle. The tax-grabbers always low-ball the estimates, and they always make the credulous supporters look like fools when cost over-runs come in an avalanche. This is another example of crony capitalism, writ large.