Billionaires for Bing or Orr
Here’s some fiscally responsible conservative government from the state-appointed Emergency Management of the city government of Detroit. Whoever is running the city government in Detroit — whether it’s elected city officials, or appointed Emergency Managers, or the direct intervention of the state government — and no matter how much they may protest that they can’t pay the bills when it comes to roads, or firefighters’ pensions, or schools — nothing will prevent a taxpayer-subsidized stadium from being built. Got to keep your priorities straight; and priority number one is, of course, taking money out of the pockets of Detroit taxpayers and giving it to billionaire developer and CEO Mike Ilitch.
New Red Wing Arena Should Be Unaffected By Detroit Bankruptcy
Michigan's state legislature approved Wednesday a $450 million bond offering that would form the public backbone of [Ilitch Holding's] $650 million entertainment center and development district near the heart of downtown Detroit.
The bonds will be floated by the Michigan Strategic Fund, which handles all of the state's private development funds. The public, $283 million portion of the bonds will come from the Downtown Development Authority, which earmarks a slice of downtown property taxes for reinvestment there. They both have investment-grade credit ratings and function independently of Detroit's city government, which makes their involvement in the deal important. Detroit's credit rating is somewhere between junk status and radioactive.
–Melvin Blackman, New Red Wing Arena Should Be Unaffected By Detroit Bankruptcy
Wall Street Journal MoneyBeat (July 25, 2013)
Most of the
Development District is going towards demolishing several buildings north of downtown, and building a new stadium, at taxpayer expense, for the Red Wings, which Mike Ilitch also owns and profits from.
The public will pay nearly 60 percent of the cost of the proposed $450 million Detroit Red Wings arena in downtown Detroit under a plan disclosed Wednesday.
Property taxes would pay for $261.5 million (58 percent) of the building’s construction cost while the team’s ownership would provide $188.4 million (42 percent), according to details provided by the state. Those are July 2013 dollars based on bonds with a 5.91 percent interest rate. Critics have blasted the arena deal as unnecessary subsidies for a billionaire pro sports team owner in a city in municipal bankruptcy. Detroit’s state-appointed emergency manager, Kevyn Orr, has said the city’s recent Chapter 9 bankruptcy protection filing won’t affect the arena project.
–Bill Shea, Detroit taxpayers to fund 60 percent of Red Wings arena, plan shows
Crain’s Detroit Business (July 25, 2013)
It does not matter who’s in charge of city government, and it doesn’t matter what political or legal constraints are supposedly put on them: the political machine always produces output to certain specifications, and part of the spec is what needs to keep running, and who needs to stay paid. In case you were wondering, citizen, that’s not you, or anyone else small enough to fail. (If you don’t get the reference in the title of this post, it’s probably because you kids today, etc. etc. Here’s something from the last century to remind you.)