Little Caesars Arena was going to change Detroit per the Ilitch Family, then it did nothing

This morning, I saw an article from Axios that discussed the 10th anniversary of Little Caesars Arena’s opening and how it has never hosted an NBA or NHL All-Star game. I found this interesting because I spent time in Detroit and remember how much the Ilitch family pushed for this new arena and surrounding developments. Back in 2014, the city of Detroit was debating what to do with the old arena that the Detroit Red Wings played in. On one hand, they could do nothing and let the Red Wings figure out what to do on their own. On the other hand, they could give the Red Wings owners, the Ilitch Family, hundreds of millions of taxpayer dollars to build a new arena. When the Ilitch family initially proposed a new $450 million arena and placed it in downtown Detroit, they were praised for the location by many. This would allow the city to grow and prosper!

But this new arena was going to be special. Exceptional and unprecedented. So extraordinary that the Ilitch family needed a significant amount of taxpayer support. To get it, they promised the public that the arena would deliver just about the world to them. Before the arena was approved by the city, both the Ilitch family and their supporters promised that a new arena would do so many incredible things for the surrounding area.

Here are just some of the reasons. I could have listed about 50 more, but I thought these made my point:

1. A new arena will draw a “significant amount of…investment in…an area with scant economic activity”
2. A new arena will include “robust new residential, retail and office developments”
3. A new arena will “bring additional jobs to the city”
4. A new arena will bring “additional economic opportunity to the city and its residents”
5. A new arena will not take any money from the city’s general fund (this is the main account that a city uses for expenses)
6. A new arena will be the “centerpiece of a 50-block area of the city dubbed The District Detroit that will include development of office space, retail, housing, and hotels”
7. A new arena will “fill out a blighted part of Detroit”
8. A new arena will keep the Red Wings “competitive in the National Hockey League”
9. A new arena will build on “the momentum in downtown” and therefore “the city only stands to benefit”
10. A new arena with both the Red Wings & Pistons as tenants will bring in nearly $600 additional million and 2,000 jobs.

— Facebook

Downtown Detroit must be thriving today! No. Not even a little. To say that the arena has done little to nothing would be quite generous. The area around the arena is not that different today than what it was before the arena was built. Yes, there are minor changes that have been made to several houses and businesses. But considering the public cost of this project? The public has gotten zero out of this deal. When I look at the list of promises above, I can’t find a single one that even remotely became true. The promise of investment never came. The promise of jobs never came. Hell, the contractor didn’t even follow through on their promise of hiring a number of local workers. The promise of an arena being the centerpiece of District Detroit never came. Maybe the Red Wings being competitive is true? But even that I doubt because I reasonably believe that they would have been competitive regardless of whether the new arena was built. Don’t get me started on the Pistons bringing $600 million and 2,000 jobs to the arena. Give me a break.

In 2017, Christopher Ilitch gave a speech discussing their company’s plans to bring “nearly 700 apartments to downtown Detroit” shortly. He talked about how District Detroit would bring “robust new residential, retail, and office developments” to the area. This would allow for Detroit to be “one of the most unique and exciting places in the country to live”. Crains Detroit wrote a story reminding everyone that years after this speech, there were “no shovels in the ground, and it’s unclear if there will be any time soon”. Additionally, multiple developers tried working with the Ilitchs on District Detroit but walked away for unknown reasons.

As one University of Michigan analysis found, the arena did “not contribute much to the City’s fiscal condition or to its residents outside of the…redevelopment”. The only thing added was parking. Lots of parking. When you consider that the Ilitchs are collecting ALL REVENUE from the arena, including money from parking, is it any surprise that they would do something to make themselves more money?

— FightingWords.net

Speaking of money, the arena never took a dime out of the general fund. Right? Yes. But that doesn’t mean the city and state are not massively hurt financially from the arena. Money that is collected from property taxes around the arena used to go towards a “state education tax” that helped fund Detroit Public Schools and a city educational service.

“Tax Increment Financing (TIF) essentially redirects taxpayer money away from vital City services to support profit-seeking activities. This is particularly troubling for Detroit, which has struggled with poor public school performance and its effects on enrollment and families. By 2051, $726 million of property tax revenue will be diverted from state and local public school funds to pay for the redevelopment. Economic recovery and resilience at the neighborhood level require stable schools that support families and children, which requires substantial investment in the local school system. Far from redistributing the benefits of redevelopment to marginalized groups, Detroit’s arena project is depriving public schools of much-needed capital” — ‘Aspirations of Economic Resilience: An Analysis of the Infuriating Logic of Detroit’s Little Caesars Arena Development’, University of Michigan, Grace Cho, 2008

In 2019, HBO Sports did a tremendous story that detailed the endless “undeveloped promises around Little Caesars Arena”. HBO discussed how even though the Ilitchs intended to build five new neighborhoods around the arena, called District Detroit, there is nothing today but open space and parking. In response to the HBO story, the Ilitchs released a statement claiming to have “invested $1.4 billion in office, retail and other developments” around the arena. Yet, outside of building a new school of business for Wayne State University, HBO found nothing but delays and empty promises from the Ilitchs. Even though the new arena was supposed to bring “new housing, retail, restaurants, and businesses”, residents instead have been given “traffic gridlock, 27 parking facilities, some taking up entire blocks, and fewer places to live”.

— NextCity.org

In response to the HBO story, the Ilitchs released a statement that apologized and promised to do everything they could to fulfill their promises made to the city and area. Just kidding. Instead, they blamed everyone else and claimed to have “exceeded our commitment”. I find this response statement to be baffling. It doesn’t refute a single thing that HBO said yet it somehow finds ways to talk about how the new arena has:

• Created “thousands of jobs”
• Restored “various historic buildings”
• Developed a “sports and entertainment district which has surged since the opening of Little Caesars Arena”
• Brought about an arena project that has driven “economic growth”
• Delivered $200 million in “additional development directly”
• Allowed the non-arena developments to be “roughly five years ahead of schedule”

What makes this stunning to me is how nothing is even remotely true or close to correct in the statement about Ilitch’s so-called achievements. What jobs were created? Where is this thriving sports district that they talk about? Where is the economic growth that was created? Additional developments? Ahead of schedule? WHAT? I am not the only one, either. Curbed Detroit noted how the statement “doesn’t actually refute anything” in the report, remains silent on the “enormous public subsidies” given to them for the project, and forgets to explain why most of the non-arena projects have been “surface parking lots”.

The Detroit Free Press openly warned Chicago about falling into the trap of believing the economic glory promises of new sports venues:

Please remember that we are talking about the Ilitchs here. The same people who come up with all sorts of ideas and then never finish them. Remember the promises made when taxpayers gave the Ilitchs millions of taxpayer money for Comerica Ballpark? How did that work out?

“A $6 million proposal in 1996 to construct an entertainment district anchored by Comerica Park came and went without any action. In 2000, about six months after Comerica Park opened, Ilitch announced a second plan, a $15 million entertainment district to be constructed near the Fox Theatre. Again, nothing happened. Some businesses popped up after Comerica opened, but nothing significant and far-reaching. The vacant land in and around nearby Brush Park, a historic district that had been visibly affected by the decades-long disinvestment in Detroit, is evidence of that” — Detroit Metro Times, 05/06/14

There is nothing worse that the Ilitchs could do, right? But it does get worse. When the Detroit Free Press looked into the property tax records of properties around the arena, a big reason for the numerous blighted houses? The Ilitchs themselves. The records indicate that the Ilitchs would buy the properties and then allow the properties to “to rot in order to drive prices down and to discourage other developments in their planned arena’s footprint”.

To summarize, I want to quote a story that encapsulates my feelings toward this new arena:

“Detroit taxpayers forked over $324 million in tax dollars meant in part to fund Detroit’s struggling schools to a family that routinely appears on the Forbes 400 in exchange for jobs for Detroiters that didn’t materialize, housing that doesn’t exist, and the remediation of blight caused by the billionaire family itself” — Detroit Free Press, 04/24/19

Even today, the Ilitchs continue getting taxpayer money for projects in downtown Detroit. Maybe this time they will come through. Right.