DETROIT – The City of Detroit is bankrupt, the art on the walls of the DIA are being eyed as possible assets to sell off to satisfy creditors and help fund pensions.
Aerial video: Site where new Red Wings arena would be built
So where will the money come from to build a new $600 million hockey arena for the Red Wings?
The proposed arena slated to be built on vacant land along Woodward near Comerica Park got a big boost Friday by clearing the first hurdle.
Think lawyers and legislators and public private entities and specialized municipal finance, and your eyes glaze over in your head, but it is the only way to explain how a bankruptcy city can magically afford a new hockey arena.
The Ilitch organization promises the new Red Wings arena will be innovative, state of the art and spectacular. There are no renderings of what it will look like even though an architect has been hired.
But the better question is how are we paying for this?
"No funds are being used from the general fund. Most of the money is not even coming from the city, not even the DDA," said nonprofit Detroit Economic Growth Corporation President George Jackson.
The DDA is the Downtown Development Authority. It is a separate legal entity from the city, a special business promoting tax authority that will own the new Red Wings stadium while the Wings make all the money from the concessions and tickets.
Buildings inside the DDA's boundaries pay their property taxes to the DDA, not the city.
The DDA then reuses that money to develop the properties within its boundaries. It's been around for a generation and it intends to use nearly $300 million already collected.
It makes it possible to pay back borrowed money-bonds really over the next 30 years.
The vast majority of this 45 block project will be paid for with private money, the Ilitch organization putting up $200 million. Public money will account for about 45 percent of the project.
"I think the key thing here is more growth, that we're not adding to the city's debt, which is what a lot of cities do when they build stadiums," said Jackson.