Detroit has been in the news a lot lately, and for one important and essential reason: It has run out of money. With the support of Michigan Governor Rick Snyder, the city's Emergency Manager Kevyn Orr began Chapter 9 bankruptcy proceedings for the city last week. At stake: City services, city worker pensions, and other business. For a city already stretched seemingly thin, necessary cuts as part of Detroit's bankruptcy will be shown as increasingly dire, limiting what the city can do, and how much it can recover.
But do not tell that to fans of Detroit's hockey team, the Red Wings. Long a top tier team in the National Hockey League, the Detroit Red Wings are apparently in need of a new hockey arena. The current Joe Louis Arena, opened in 1979, is looking a little old, but not as rundown as, say, Oakland's O.co Coliseum, which leaked sewage a few weeks ago. Four years ago, when Detroit was still in dire straits but bankruptcy was not on the table, the Red Wings decided it was a good idea to begin designing a new arena in Downtown Detroit. Four years later, just weeks before the bankruptcy filing, the Red Wings and the Detroit Downtown Authority announced a new entertainment district centered on the new arena, which would also include shops and residential space. While a significant amount of funding for the project and arena will come from private investors, at least two-thirds of the funding, totaling $444 million over time, is expected to come out of taxpayers' pockets, primarily around Michigan.
Now, with Detroit's bankruptcy proceedings in full swing, the Red Wings arena looks like a very big boondoggle or white elephant, depending on which allegory one prefers. Many legislators, especially those based in the Detroit area, are having second thoughts about the vote that led to the new arena going forward, with some wishing they could change their vote. For their part, both Governor Snyder and Emergency Manager Orr have both committed to the project, and said that the new Red Wings arena will not be affected by the bankruptcy proceedings. Both say the project will be an important economic boon to Detroit, in addition to creating about 8,000 jobs. The state's strategic fund just yesterday approved the use of special tax-based financing for the project. However, such boosts will not change the fact that public money is being used to fund a sports arena at a time when the city it is in cannot even afford to keep all its lights on. Furthermore, there is no guarantee that, even if the Red Wings were to remain a constant playoff contender, the new arena and related district will actually provide an economic boost.