Detroit Bankruptcy Won’t Stop Construction of $400 million Downtown Hockey Arena
July 27, 2013 - 8:12 am
Mike Illitch, owner of the Detroit Redwings pro hockey franchise, has a reported net worth of $2.7 billion. But somehow, Illitch convinced the Michigan state legislature and the city of Detroit to use taxpayer funds to build him a shiny, new hockey arena in the downtown area.
The reported cost of the new arena will be $444 million. All I can say is that Illitch and the city fathers of Detroit better pray there isn’t an incident where police would need to be called to the new venue.
Current response times for police approach one hour.
Be that as it may, one might question if 40% of streetlights remain dark, fire and police forces are cut, schools are a disgrace, 79,000 empty buildings need to be dealt with, and the public pension system is bleeding the city dry, why construct a new hockey rink for a billionaire sportsman?
“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.”
But critics say the project won’t have enough economic impact to justify the cost, and that it’s the wrong spending priority for a city facing dire economic conditions.
Detroit city services are already stretched extremely thin. On average, police take about an hour to respond to calls for help, and 40% of street lights are shut off to save money.
“If you want people to live in the city, and not just visit to go to games, you have to invest in schools, in having the police to respond to calls,” said Gretchen Whitmer, the Democratic leader in the state senate. “There are so many investments that should trump a sports stadium.”
Additionally, Orr wants to make deep cuts to both the pensions and health care coverage promised to city employees and retirees.
The state legislature approved the taxpayer funding for the arena in December. The controversial vote split Detroit’s own legislative delegation. Whitmer argues that the matter should be reconsidered given the city’s worsening finances.
“If the vote was held today, since the bankruptcy, I wouldn’t put my money on it passing,” she said.
One reason why Detroit is facing bankruptcy is because the city made huge investments in showcase projects like the new hockey arena while neglecting more mundane stuff like funding the police and firefighters.
And now the biggest union in the country wants the federal government to bail the city out:
The executive council of the AFL-CIO, the nation’s largest labor federation, called for an “immediate infusion of federal assistance for Detroit” to be matched by Michigan, which they say has not done enough to keep the city from going through bankruptcy.
“Bankruptcy must not be used as a tool to impoverish city of Detroit workers or retirees. City workers have already made severe concessions to keep the city afloat,” the executive council said in a statement. “They are not to blame for Detroit’s financial problems, yet they have been making sacrifices all along the way to help the city out.”
The executive council, which consists of more than 50 leaders from various organized labor groups, are angry about pensions for retired workers facing suspension if Detroit goes through Chapter 6 bankruptcy.
“It appears that Governor [Rick] Snyder and [Emergency Financial Manager] Kevyn Orr are pushing Detroit into bankruptcy to gut the modest benefits received by Detroit’s retired public service employees,” the AFL-CIO’s statement reads.
“Modest benefits?” Compared to the swag taken home by AFL-CIO leaders, I suppose you could call it “modest.” For the rest of us? Not so much.
A bailout is not going to happen unless a Robocop-type situation arises in Detroit and everyone goes mad. And a call for a bailout certainly isn’t going to get much sympathy as long as the city and state keep approving white elephants like a new hockey arena.