The Guardian - Not Impressed with District Detroit

[Detroitnerd]

The new MBA building is basically the dumbest project. I have a family member getting an Wayne MBA and the student body is upset about the project.

Why build it where it is? To understand this, you need to think of the main talent of Olympia. It isn't neighborhood development that's their forte, though -- it's corporate welfare artistry.

Baked into the agreement for public backing of the bonds and the stadium was a side agreement about "spinoff development." If the Ilitches could cause $200 million in ancillary development within the district within the first five years of the first event at LCA, they would reap a $67 million windfall from the DDA.

Back when all these deals were being hammered out, there was an understanding that this meant that Olympia would be courting Class A urban developers to turn the stadium district into a thriving neighborhood. Gov. Snyder had said of the deal, "It’s something that hopefully will be a tax-base generator. Not the arena as much per se, but all the surrounding development.”

But as you add up the "spinoff development," it begins to seem that the Olympia people already knew they were going to cause $200 million in development to appear, but not in the way many had thought.

As I understand it -- and I'm a little foggy on some of the details -- the Ilitch organization announced plans to build Little Caesar's $150 million headquarters on the district's land. The DDA has also accepted their $24 million parking garage as counting toward the "spinoff development" goal. That still left them about $26 million short.

The missing piece would seem to be the $40 million gift to Wayne State University. The [[presumably tax-deductible) gift would likely put them over the top, allowing them to receive the $67 million bonus.

But only as long as it was located within the district.

I'm no big-city lawyer, but it seems to me that the organization had already thrown a dart against the wall, and then drew a bull's-eye around it. When you know you want to build a new HQ anyway, and want to build a money-making parking garage, and you figure you can deduct another donation against your taxes by persuading the university to locate there, you have gamed the public through DDA agreements and tax-deductible write-offs into quietly subsidizing your new HQ.

Unfortunately, yes, the students will have a difficult or expensive task if they want to park near the school. But I believe this was never about their convenience. It was about wringing the most money possible out of these gold-plated "development deals."