Detroit Update: On the Pistons Moving to Little Caesars Arena, and New Soccer Stadium

[emu steve]

Need to get this article in this thread [[pros and cons of prospective cities):

http://www.detroitnews.com/story/spo...pare/99439204/

[bust]

Hyperstyles, if I recall correctly, the Gilbert/Gores proposal does have them paying for the entire stadium [[plus surrounding projects). It also calls on Gilbert/Gores to cover cost overruns/delay costs not only on their project but also on the jail project.

Gilbert and Gores have asked for "$300 million from the county, the transfer of the Gratiot Avenue property and a credit to be paid to the company for the savings a new consolidated criminal justice complex would provide."

There has also been lots of speculation that Gilbert pushed the so-called "Michigan Thrive" legislation because he hopes to benefit from it not just at the Hudson's site [[he's been clear about that) but for the possible soccer stadium besides. That would allow him to capture $40 million a year in taxes at each location that would otherwise go to the state.

After the precedent recently set by the Red Wings arena who would offer to self-finance a stadium in Detroit?

Gilbert offers Wayne County new jail, courts in swap for Gratiot site
http://www.lansingstatejournal.com/s...site/97570484/

Taking the 'Gilbert' out of the 'Gilbert bills'
http://www.crainsdetroit.com/article...-gilbert-bills

[MikeyinBrooklyn]

As to the $300M, that is money [[at least that much money) the county would spend to achieve the same results.

As for the "Michigan Thrive" proposal, I haven't heard that about the jail & stadium projects. While I actually don't favor a proposal like MT [[although I do favor allowing substantial property tax reductions for sites that do not otherwise generate tax revenue), I guess we'll have to wait and see A) what passes, and B) if G/G goes for it. Although if the Gratiot site is either going to be the jail project or a stadium project, I don't quite understand how it could be deemed blighted [[although it sure looks that way now). We'll see.

[ABetterDetroit]

Now, the project does call on the developers to capture some amorphous efficiency savings at the new criminal justice project. That seems rather murky and potentially contentious, so I would prefer a straight up tax phase-in for the jail site project. I would not tax it for 4 years [[time to completely build it out), and then phase in property taxes at 20% of assessed value per year, so that in 5 years of operation it will be a full taxpaying project. There is no downside to city/county taxpayers on that, since the site is both not currently generating any tax revenue and costing the county $1.2M a month

This is a pipe dream.

Nowhere in the United States does anyone anywhere build billion dollar developments where the property tax rate is over 4% annually. One billion of new development would be $40,000,000 a year. Every year. 200 million in five years. Not in New York, San Fran, Chicago, Seattle, DC, Denver, Portland, Miami.

It is the Gap that cannot be bridged. No bank will touch it. There is a strangle hold on large new development projects unless property tax relief is given. Billion dollar developments don't net a million dollars a week to just pay the property tax before the interest is paid on the loan. It's all part of the math. Taxes, Insurance, Utilities and maintenance. It's a simple concept. Can the bills get paid and pay back the loan?

Detroit's property tax rate is way too high to compete. It is set to extract as much money as possible for a bankrupted decaying city with falling property values not for new multi hundred million dollar developments let alone billion dollar developments. Property tax abatements are the only way anything can be built of value.

https://treas-secure.state.mi.us/pte...testimator.asp

[Bham1982]

This is a pipe dream.

Nowhere in the United States does anyone anywhere build billion dollar developments where the property tax rate is over 4% annually. One billion of new development would be $40,000,000 a year. Every year. 200 million in five years. Not in New York, San Fran, Chicago, Seattle, DC, Denver, Portland, Miami.

In NYC, commercial property taxes are even higher, but buildings still get built. Commercial property taxes are something like 10.5% to half the market value, plus there's a additional surcharge in Manhattan. But NYC is an exception.

The main problem in Detroit isn't property taxes, it's the demand side. There still are too few people willing to live there so new developments will only get done through public subsidies.

[ParisianLesion]

This is a pipe dream.

Nowhere in the United States does anyone anywhere build billion dollar developments where the property tax rate is over 4% annually. One billion of new development would be $40,000,000 a year. Every year. 200 million in five years. Not in New York, San Fran, Chicago, Seattle, DC, Denver, Portland, Miami.

It is the Gap that cannot be bridged. No bank will touch it. There is a strangle hold on large new development projects unless property tax relief is given. Billion dollar developments don't net a million dollars a week to just pay the property tax before the interest is paid on the loan. It's all part of the math. Taxes, Insurance, Utilities and maintenance. It's a simple concept. Can the bills get paid and pay back the loan?

Detroit's property tax rate is way too high to compete. It is set to extract as much money as possible for a bankrupted decaying city with falling property values not for new multi hundred million dollar developments let alone billion dollar developments. Property tax abatements are the only way anything can be built of value.

https://treas-secure.state.mi.us/pte...testimator.asp

In addition to Bham's comments, your equation is entirely wrong. The cost to build a property is not at all the same as the market value and the market value is not the same as the taxable value.

[ABetterDetroit]

In addition to Bham's comments, your equation is entirely wrong. The cost to build a property is not at all the same as the market value and the market value is not the same as the taxable value.

Again nobody builds anything anywhere without the Expectations that the property will end up being worth the capital that was invested in it. It would be unsound business to spend $1 only expecting a market value of .75 cents when construction is finished. Expecting less would be a bad loan. Banks have been burned badly in the past, they now are avoiding bad loans like the plague.

SEV is State Equlized Value = 50% of Assesed Value

SEVs are Public record in Michigan.

Detroit NON HOMESTEAD property Tax rate is 88 Mills

That is figured on the SEV

One Billion Dollars Assesed value would be a SEV of $500,000,000 with a annual tax bill of

$44,000,000 . That's Forty Four Million Dollars every 52 weeks. A rate of 4.4% annually.

I know Math. I did the math in my head and rounded it. Whether or not you do or don't know math is not my damn business.

I provide the the link every time for people who may not know the math.

Plug the 500 Million in your self if you still think this is all "Wrong"

If you want to make an argument that builders, developers or banks will build expecting less in value than they invested up front... Forget it, there is no point with me.

https://treas-secure.state.mi.us/pte...TEstimator.asp

[mikeg19]

http://www.detroitnews.com/story/bus...nter/99516426/

About $83M for the facility, parking garage, and Henry Ford portion, all to be paid for by the Pistons and HF. There is a brownfield tax component to it, but overall that's nice to see them paying for the entire thing.

[emu steve]

http://www.detroitnews.com/story/bus...nter/99516426/

About $83M for the facility, parking garage, and Henry Ford portion, all to be paid for by the Pistons and HF. There is a brownfield tax component to it, but overall that's nice to see them paying for the entire thing.

Indeed.

That is the nice thing about such a 'multi-purpose' project that it isn't simply a sports facility.

It would be hard to say 65.9% [[or some other number off the top of one's head) of this is sports facility and we want... [[X million dollars).

It is a practice facility, sports medicine facility. office space, retail, community space and parking garage so it serves several functions and benefits the area in many ways.

Once again the old thinking that a practice facility is a small 'arena' for sports purposes only is dying or dead and that one needs to 'think big' and think of how it fits into the neighborhood and adds to the neighborhood [[and in this case, helps HFH, too).

This is a nice win for the New Center area and Detroit. #MakeNewCenterGreatAgain

[emu steve]

I just learned by accident that Andrea Bocelli will be at LCA in early Dec.

LCA will be something with Wings, Pistons, and shows like Bocelli.

#MakeMidtownDetroitGreatAgain

[EGrant]

I just learned by accident that Andrea Bocelli will be at LCA in early Dec.

LCA will be something with Wings, Pistons, and shows like Bocelli.

#MakeMidtownDetroitGreatAgain

And Bocelli has the best chance out of the bunch to make the playoffs.

[ABetterDetroit]

I just learned by accident that Andrea Bocelli will be at LCA in early Dec.

LCA will be something with Wings, Pistons, and shows like Bocelli.

#MakeMidtownDetroitGreatAgain

I know you have the best intentions Steve but is there any chance your new hashtag could be more creative and less potentially politically explosive?

[EGrant]

#MakeHashtagsGreatAgain

[emu steve]

#NoMoreDumbHashtags [[after this one)

[MikeyinBrooklyn]

#IveAlwaysCalledThemOctothorpes

[ABetterDetroit]

#NoMoreDumbHashtags [[after this one)

Whoa slow down there, now your bailing? I just said get more original! Don't sell short #agoodhashtag

If you find the right one, then put it on a ball cap....

[MikeyinBrooklyn]

#cornedbeefhashtag anyone?

[archfan]

#IveAlwaysCalledThemOctothorpes

#IWillTooFromNowOn

[emu steve]

#AndreaBocelli

[ABetterDetroit]

#GaGaoohlalaDetroitLCA