Tom Wilson will be hired by Ilitches to oversee Red Wings, Tigers

**Cincinnati_Kid** · March-02-10, 01:07 AM

Originally Posted by ct_alum

Get a grip everyone, the arena will be built on Illitch's property in Foxtown [[and paid for by us) - Why do you think that he has been buying property there for years? Michigan and Trumbull? Forget it. The Joe? It will be torn down and Cobo expanded.

Bingo !! That's my whole point. It will be financed by the taxpayers. Another straw on the backs of Detroit area residents who are barely getting by now, in this morbid economy. Wilson was brought in to be the financier. Nothing personal about the guy, he's just a opportunist, looking for his next big payday, like a lot of folks around here.

**schulzte** · March-02-10, 12:37 PM

I would be surprised to see a new arena be paid for with primarily public money. I think Olympia could get a very nice arena built downtown for $200 million, though it might not be palacial like Cowboys or Yankee Stadium or some others. The price of the arena is key, I think if costs are kept down, the debt service could be paid on an arena that is getting half the buisness. If not, the debt will be too high and the building will lose money.

I would think that an agreement could be made where Olympia puts up half of the money, naming rights could be sold for a quarter, and public funding could make up a quarter. That would be a little more fair, because the public would derive some value out of a new sports/entertainment arena downtown. New shows and events would be attracted downtown, and that would be a good thing.

Hopefully, Palace Sports and Olympia Entertainment can merge or come to some kind of operating agreement. Two arenas in the same market can work, but they need to be managed together. Otherwise, one venue is played of the other another and nobody makes money.

I think an arrangement could be worked out where by The Palace would be the primary concert and show venue from November-May, while the downtown arena would keep the ice on the floor for NHL, CCHA, Ice Shows, or convert for other specialty sporting events [[NCAA basketball, for example). If there was a tour date that the Palace couldn't accomodate due to a Pistons conflict for example, it would be held downtown. Then, after hockey season [[June-October), the downtown arena would be the primary indoor concert and show venue, DTE would take some outdoor concerts, and the Palace could go dark for a time. That is what I would want to do if I had control of both venues anyway.

http://www.newolympia.blogspot.com

**esp1986** · March-02-10, 12:51 PM

Originally Posted by schulzte

I would be surprised to see a new arena be paid for with primarily public money. I think Olympia could get a very nice arena built downtown for $200 million, though it might not be palacial like Cowboys or Yankee Stadium or some others. The price of the arena is key, I think if costs are kept down, the debt service could be paid on an arena that is getting half the buisness. If not, the debt will be too high and the building will lose money.

I would think that an agreement could be made where Olympia puts up half of the money, naming rights could be sold for a quarter, and public funding could make up a quarter. That would be a little more fair, because the public would derive some value out of a new sports/entertainment arena downtown. New shows and events would be attracted downtown, and that would be a good thing.

Hopefully, Palace Sports and Olympia Entertainment can merge or come to some kind of operating agreement. Two arenas in the same market can work, but they need to be managed together. Otherwise, one venue is played of the other another and nobody makes money.

I think an arrangement could be worked out where by The Palace would be the primary concert and show venue from November-May, while the downtown arena would keep the ice on the floor for NHL, CCHA, Ice Shows, or convert for other specialty sporting events [[NCAA basketball, for example). If there was a tour date that the Palace couldn't accomodate due to a Pistons conflict for example, it would be held downtown. Then, after hockey season [[June-October), the downtown arena would be the primary indoor concert and show venue, DTE would take some outdoor concerts, and the Palace could go dark for a time. That is what I would want to do if I had control of both venues anyway.

http://www.newolympia.blogspot.com

$200 Million is on the incredibly cheap end of things... that would give us the present day equivalent of what JLA was when it was built... a budget arena. The Pittsburgh Penguins new arena is costing inexcess of $325 Million, and for one team.

If the Wings and Pistons build together, I would expect the arena to be state of the art, and it would, in no way, be anything less than the best arena around, the Red Wings are not your typical team, and so I don't see them playing in a typical arena, and since they want this to be a top notch arena for concerts and such, they will spend every dollar to do so.

There is every possibility that this ends up being primarily privately funded... there will likely be some public money involved, for economic development, and even a needed revamp of freeway exits and streets downtown, but given the state of the local economy, I don't see any way this is paid for by much more than 30% worth of public funds, and that is on the high end.

**schulzte** · March-02-10, 01:31 PM

Joe Louis Arena should not have cost what it did, the city must have handsomely overpaid for it [[surprise). JLA was a $57 million building in 1980. Dallas constructed Reunion Arena that year for $27 million. The Palace was constructed nine years later for $70 million, and its still virtually state of the art. So JLA is not a fair comparison, it cost far more than it was worth. And as I stated earlier, the best arena in the NHL cost about $130 million back in 2000, so sometimes its the design itself, not just the money spent.

If both the Pistons and Red Wings are going to be in downtown Detroit, then they can go nuts and drop $500 million on an arena because then it pencils out from a financing standpoint. But I don't think that is going to happen, because the Palace is essentially paid for; it would be such a waste of a really nice building for the Pistons to move now. It would make more sense for the Red Wings to move to the Palace than to squander it just to build a $500 million building for the both of them in town, but few want the Red Wings to move to Auburn Hills either.

http://www.newolympia.blogspot.com

**esp1986** · March-02-10, 02:09 PM

Originally Posted by schulzte

Joe Louis Arena should not have cost what it did, the city must have handsomely overpaid for it [[surprise). JLA was a $57 million building in 1980. Dallas constructed Reunion Arena that year for $27 million. The Palace was constructed nine years later for $70 million, and its still virtually state of the art. So JLA is not a fair comparison, it cost far more than it was worth. And as I stated earlier, the best arena in the NHL cost about $130 million back in 2000, so sometimes its the design itself, not just the money spent.

If both the Pistons and Red Wings are going to be in downtown Detroit, then they can go nuts and drop $500 million on an arena because then it pencils out from a financing standpoint. But I don't think that is going to happen, because the Palace is essentially paid for; it would be such a waste of a really nice building for the Pistons to move now. It would make more sense for the Red Wings to move to the Palace than to squander it just to build a $500 million building for the both of them in town, but few want the Red Wings to move to Auburn Hills either.

http://www.newolympia.blogspot.com

A lot of things are up in the air here... Should the Pistons be sold, the Palace would likely have to be sold with them, a long shot as far as I am concerned... because most of the investment groups currently looking are in it for the sports and have no idea about the entertainment end of it... and while the Palace is essentially paid for, after $100 million in upgrades about 5 years ago, Tom Wilson [[before leaving PSE), I believe, said that PSE was looking to build a new arena by 2020, so this would fit handsomely into their plans either way, as neither franchise, along with concerts or not, could build a venue alone, and without the public financing that was available to both last time around, there is no way...

and I am in no way questioning JLA, but Reunion Arena in Dallas was no prize, although the location couldn't have been worse than JLA.

**esp1986** · March-02-10, 03:01 PM

A new hockey venue is expected to cost $300 million to $400 million. The Pittsburgh Penguins, who edged the Red Wings in the Stanley Cup finals last June, open next season at the $321 million, 18,087-seat Consol Energy Center after 48 years at Mellon Arena. Consol has 66 suites.

http://blog.mlive.com/snapshots/2010...red_wings.html

**BShea** · March-02-10, 08:38 PM

Originally Posted by esp1986

A new hockey venue is expected to cost $300 million to $400 million. The Pittsburgh Penguins, who edged the Red Wings in the Stanley Cup finals last June, open next season at the $321 million, 18,087-seat Consol Energy Center after 48 years at Mellon Arena. Consol has 66 suites.

http://blog.mlive.com/snapshots/2010...red_wings.html

esp1986: The text you posted is actually MLive quoting my blog directly. Just FYI.

**BShea** · March-02-10, 08:51 PM

Originally Posted by Cincinnati_Kid

Bingo !! That's my whole point. It will be financed by the taxpayers. Another straw on the backs of Detroit area residents who are barely getting by now, in this morbid economy. Wilson was brought in to be the financier. Nothing personal about the guy, he's just a opportunist, looking for his next big payday, like a lot of folks around here.

Why do you say it will be financed by the taxpayers? Construction of Comerica wasn't funded by a general fund loan or a direct levy on residents. The Ilitches paid 62% of the cost, and the remainder was through hotel and car rental taxes. There's a WORLD of difference in that sort of tax versus a direct levy on everyone. No one has ever floated the idea of asking for direct sums from government. I don't accept that use taxes and direct subsidies from the general fund are the same thing.

My guess is that there's going to be Ilitch money [[directly and through loans), state/county/local tax breaks and the same formula of use taxes used to finance Comerica. I can't imagine a scenario in which the city or county is going to write a check with taxpayer money. DEGC might chip in some cash, as it's done with M1 Rail. But I just don't see significant direct cash subsidies. It's a real political/economic minefield to navigate.

If you want to cast Ilitch as the Daddy Warbucks oligarch with Tom Wilson as his bagman, that's you right. I'm not a Detroit sports fan [[Go Cleveland!), so I have no vested interest in what they do. As a downtown Detroit resident, I do have some interest and wouldn't want to see the money I pay for city services be used in an irresponsible way [[not that this project is or isn't). This is just me guessing.

If you think a new arena provides no public good/interest and is simply the brick-and-mortar manifestation of owner greed and political wastefulness, then you're not going to be convinced otherwise. Others believe that a new arena can provide a public good and boost to intangible such a civic pride. And if made part of a larger joint effort to create an entertainment district that provides new [[not substitution effect) jobs, business, taxes, etc, then you're more willing to accept a new arena with some level of public support.