Skeptical of previous promises, not everyone wants to see the deal go through. What’s at stake? Hundreds of millions of taxpayer dollars.
UPDATE: The Detroit City Council voted 8-1 in favor of a transformational brownfield credit to move forward with the District Detroit development. It will next go to the Michigan Strategic Fund for approval.
DETROIT—The fate of a 10-building proposed development surrounding Little Caesars Arena could be decided today. That’s when the Detroit City Council is scheduled to vote today, March 28, on a massive tax relief package that big-name developers insist is necessary for the project to move ahead on land that they’ve owned and not yet worked on.
Backed by Detroit billionaires the Ilitch family—owners of the fast food franchise Little Caesars Pizza, the Detroit Red Wings, and the Detroit Tigers—along with Detroit-born billionaire and Miami Dolphins owner Steven Ross, the area known as “District Detroit” has been the subject of controversy since its inception. In a 2014 deal, the Ilitches received about $400 million from the Michigan Strategic Fund in taxpayer money to develop the hockey arena and surrounding neighborhoods—but haven’t lived up to that latter promise, critics say.
The newest “District Detroit” plan promises six new buildings and four rehabbed historic structures—all already controlled by the Ilitch family—in downtown Detroit and the Cass Corridor. The project offers community benefits that include public greenspaces, a high school football field, financial aid for future residents, and a guarantee of jobs for locals.
This time around, the Ilitch family and Ross stand to get nearly $800 million in loans and tax incentives that they say is necessary to facilitate the deal—which has been appraised at $1.5 billion. Critics are skeptical that the developers have actually come to play ball this time around, as previous projects haven’t lived up to the hype.
The state of Michigan was asked to provide tax breaks for the Ilitch-owned company Olympia Development, when they pitched an area surrounding the new hockey arena with sidewalk cafés, multi-use residential hubs, and wide red-brick walkways filled with pedestrians yearround. As veteran Detroit Free Press journalist John Gallagher noted in 2019, “virtually none of that has happened.”
“We’ve had promises, we’ve seen projects like this come before council and some of the promises or guarantees never came to fruition,” Detroit City Council President Mary Sheffield said.
In 2023, many of those same properties are still parking lots. Other buildings, some of which have been owned by the Ilitches for decades, are still in disrepair, despite promises to rehab them.
Most of the original sites have been revisited in the latest District Detroit mock-ups, though not all made the cut. And Olympia wants permission to demolish another historic downtown building to make way for their current plans. Already, the development group has torn down historically significant structures that have been replaced with parking lots.
Many Detroit residents question the motives of supportive council members.
“This is a city administration that wants to measure their success based on how many big buildings they build instead of how much they combat poverty in our city,” said US Rep. Rashida Tlaib (D-Detroit) in the Detroit Metro Times.
But others are of the belief that Detroit can’t turn down a major investment without a backup on the table.
And unlike last time, the tax breaks are designed so that very little of the money would have to be fronted by the city or state, and additional safeguards are in place to scale back the incentives if developers don’t fulfill their obligations.
Most of the tax breaks would be taken from the future general tax fund, with only a little portion would be given up as construction begins.
“If you’re skeptical of any promise the Ilitch organization makes, this deal is a way to prod those promises forward,” wrote the Crain’s Detroit Business editorial board. “The subsidies don’t happen if the projects don’t happen.”
If the Detroit City Council green-lights the proposal today, it will be off to the Michigan Strategic Fund for approval from the state.