DETROIT (WWJ) — A new hockey arena for the Detroit Red Wings got another step closer to reality Wednesday with Michigan Strategic Fund Board approval of $450 million in bonds for the structure.
State officials said the overall project, which includes a total of $650 million in arena costs and retail, residential and restaurant development around the arena on 45 acres, would create 4,380 construction jobs.
The city’s bankruptcy is not expected to interfere with the project, which backers said consists of 56 percent private investment from Olympia Development and 44 percent public financing from tax capture in the Detroit Downtown Development Authority area.
That compares to an average of 25 percent private development for new major league sports stadiums and arenas around the nation, backers said.
“This new entertainment district will be much more than a new arena for the Detroit Red Wings,” Gov. Rick Snyder said in a statement. “This is a project that will help revitalize Detroit. This project creates another major destination point for residents and visitors alike that builds on prior investments along Woodward from Comerica Park and Ford Field to the new Whole Foods in Midtown. The Ilitch family organization is making an enormous investment in the city and state bond financing makes this project a true public-private partnership.”
Last month, Olympia Development of Michigan, an Ilitch-owned company, signed a memorandum of understanding with the Downtown Development Authority and Wayne County that provides the framework for the financing of what’s being called the “Catalyst Development Project.”
The MSF approved the Catalyst Development Project for the Detroit Downtown Development Authority and Olympia Development of Michigan, LLC, and an inducement resolution for issuance of $450 million in private bonds to finance construction.
The project agreement requires at least half of the jobs created to be filled by Detroit residents.
“This project is appropriately named as it will have a catalytic effect on the city thanks to added commercial and residential offerings along with the arena and entertainment venue,” said Michael Finney, MSF Chair and president and CEO of the Michigan Economic Development Corp. “This vital community development will provide thousands of jobs for city residents during construction and new fulltime jobs when the facilities are completed.”
The state Legislature authorized the tax capture in December. The project still needs formal approval from Olympia, as well as the city and Wayne County.
Assuming all goes well, the arena is expected to be ready for the Red Wings by 2016 or 2017.
The MSF also approved funding for two projects in outstate Michigan:
* Two grants supporting a $100 million expansion of the Jackson National Life Insurance Co. headquarters in Lansing. The project will include a connector from the existing headquarters building to a new 260,000 square-foot office complex and a new 80,000 square-foot print center and warehouse on an adjacent piece of land. The investment will create 400 jobs over the next five years, resulting in MSF approval of a $3 million Michigan Business Development Program performance-based grant. In addition, MSF approved a $3 million Community Development Block Grant for infrastructure activities at the site, including sanitary sewer improvements, water improvements and electric infrastructure. The project will create 278 temporary construction jobs.
* MSF also approved $2.1 million in Community Development Block Grant funds for infrastructure improvements in St. Joseph for the Harbor Village at Harbor Shores, LLC. Harbor Village at Harbor Shores will redevelop a vacant former industrial site in St. Joseph into a 100-room resort style hotel with a restaurant, bar, meeting rooms, fitness and spa area, conference space and two floors of condos with private indoor parking. The infrastructure improvements will include installation of public water, sewer, parking lot and walking trails. The company will invest $17.6 million and create 68 full time equivalent jobs over the next two years, with at least 51 percent of the positions being held by low- and moderate-income individuals. The city of St. Joseph will contribute $266,120 toward the project. The project was also awarded a $900,000 Michigan Community Revitalization Program performance-based grant.