The arena itself is an estimated $450 million. Olympia has said it will lure private developers to construct an additional $200 million of ancillary mixed-use investment, which could entail anything, really, as Metro Times previously reported. If Olympia defaults on the commitment to "cause to invest" at least $200 million in private development within five years after the arena opens, the contract places no fault on the company. The arena will still be constructed regardless.
The Michigan Strategic Fund will issue up to $450 million in 30-year tax-exempt bonds to finance arena construction costs. Those bonds will be secured through annual payments by Olympia ($11.5 million), the DDA ($2.5 million), and state school taxes captured by the DDA (about $13 million).
According to city records, Olympia and the DDA say 51 percent of the arena's 5,500 construction jobs will be for Detroiters. Olympia estimates an additional 400 jobs will be created at the new arena, on top of the 700 currently working at Joe Louis Arena, the Red Wings current home.
Once the Red Wings move into the new arena, the Joe is expected to be demolished using $6 million in bonds issued by the Michigan Strategic Fund. The city of Detroit will have to reimburse the state using tax increment revenues generated by a future development on the Joe's site worth at least $24 million. It's unclear who would foot the demolition costs if a new development isn't lined up.
(You can read MT's cover story on how the arena deal came to fruition here.)
We welcome readers to submit letters regarding articles and content in Detroit Metro Times. Letters should be a minimum of 150 words, refer to content that has appeared on Detroit Metro Times, and must include the writer's full name, address, and phone number for verification purposes. No attachments will be considered. Writers of letters selected for publication will be notified via email. Letters may be edited and shortened for space.
Email us at [email protected].
Support Local Journalism.
Join the Detroit Metro Times Press Club
Local journalism is information. Information is power. And we believe everyone deserves access to accurate independent coverage of their community and state. Our readers helped us continue this coverage in 2020, and we are so grateful for the support.
Help us keep this coverage going in 2021. Whether it's a one-time acknowledgement of this article or an ongoing membership pledge, your support goes to local-based reporting from our small but mighty team.
Join the Metro Times Press Club for as little as $5 a month.