The latest pushback comes from Christopher Douglas, an associate professor of economics at the University of Michigan-Flint and a member of the Board of Scholars at the Mackinac Center for Public Policy, a research and educational institute in Midland.
Douglas writes in a column in Crain's Detroit Business that the Ilitch family essentially got away with murder in the negotiations with the state and city when it really had so little leverage.
He writes:
The Detroit Red Wings are building a new arena and have released a drawing of the construction plan. Olympia Development -- a company owned by Red Wings owner Mike Ilitch -- persuaded state politicians to spend $260 million in taxes for this $650 million project. The arena will cost almost four times more than the construction of Joe Louis Arena did and will be one of the National Hockey League's most expensive ever. But it didn't have to be this way -- the Red Wings and Ilitch had no real leverage over the politicians who voted in favor of this corporate welfare.In addition to the $260 million state subsidy, Olympia Development struck extra deals with the city of Detroit. The company will no longer owe the city a disputed $50 million to $80 million in television revenue. It will also gain $11 million annually by no longer sharing ticket and concession revenue with the city and keeping all naming rights revenue. When asked about the negotiations between the city of Detroit and Olympia about the revenue, Councilman Gabe Leland said, "It just didn't seem like (Olympia representatives) were willing to budge."In reality, Olympia had little leverage with the city. Professional sports franchises often extract special favors by threatening to move. But given the market realities of the NHL, the Red Wings could not have made a credible threat to move.
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