In cash-strapped Detroit, few question sports arena funding

Mon Jul 29, 2013 7:02am EDT
 
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By Joseph Lichterman

DETROIT (Reuters) - While Detroit has become a top emblem of U.S. urban economic decline with its recent bankruptcy filing, it remains a resilient and vibrant sports town.

Major League Baseball's Tigers and the National Football League's Lions, like teams in other U.S. cities, have obtained public financing for new arenas, despite questions about their promised economic windfalls.

The Tigers' home stadium Comerica Park, which opened in 2000, was built at a cost of $300 million, 38 percent of which was publicly financed. Tigers owner Mike Ilitch, who also owns the Red Wings, paid $185 million. Indian casino revenue and a voter-approved 2 percent rental car tax and 1 percent hotel tax paid the public's share, according to the National Sports Law Institute at Marquette University.

Ford Field, the Lions' domed stadium, was built next door to Comerica and opened in 2002 at a cost of $430 million, 36 percent of which was publicly financed by the same Wayne County tourist tax and payments from the city of Detroit, the state of Michigan, and the quasi-public Downtown Development Authority. The Lions, owned by Henry Ford's grandson William Clay Ford Sr., paid $70 million. There were also $50 million in other corporate contributions, the institute said.

And while area bars and restaurants are typically packed on game days, the neighborhood is a ghost town when neither team is playing. After the games, most fans go straight back to their homes in the suburbs.

Sports economist Andrew Zimbalist, a professor at Smith College, compared the economic impact of a new stadium to that of a large grocery store or department store.

"As a general matter, stadiums and arenas basically reallocate geographically spending within a metropolitan area," he said, adding that most of the money spent at sporting events goes to cover team costs like payroll. The Tigers, for instance, have the fifth-highest payroll in baseball, paying their players a combined $148 million.

Still, a state board recently approved issuing bonds to help pay for a new arena for the Red Wings at the heart of a proposed 45-block entertainment district just north of downtown.   Continued...

 
'Detroit' is seen on the top of an iron man-hole cover on a street in Detroit, Michigan July 27, 2013. REUTERS/ Rebecca Cook