Traverse City Record-Eagle


March 9, 2014

Jack Lessenberry: Why government doesn't work anymore

Want two glaring examples of why many liberals - as well as conservatives - think government doesn’t work anymore?

Consider these: First, bankrupt Detroit is paying to build a new hockey arena and entertainment center for a billionaire, and stands to get exactly nothing in return. Nobody yet knows how the city’s bankruptcy process will play out, or how much pensioners will be hurt. Nobody yet knows if the deal to save the treasures of the Detroit Institute of Arts will go through. Nobody knows, furthermore, how Detroit is supposed to stay solvent after bankruptcy.

Everybody agrees that the city doesn’t have enough money to provide basic services: Not enough police, not enough emergency vehicles, firefighters or ambulances.

But Detroit’s Downtown Development Authority thinks city taxpayers should pay to build a new hockey arena and entertainment complex for the Ilitch family, which owns the Detroit Red Wings. (Forbes Magazine estimates Mike and Marion Ilitch’s current worth at $3.2 billion.) Funding for the deal is complex, and some apparently will be reimbursed by the state.

But taxpayers will spend more than $260 million, largely from school property taxes, to build the arena.

That’s an estimated 58 percent of the total cost. The city also sold the Ilitch family all the land it needs for a dollar. Granted, it was largely blighted land nobody else wanted anyway.

However, this will be the second time since 1979 that the city of Detroit has built an arena for the Red Wings. Currently, the city does get a share of the proceeds at the Joe Louis arena, amounting to about $7 million a year.

So how much will the city get from the new arena it is building for the billionaires? Nothing. Olympia Development of Michigan, the Ilitch family’s holding company, gets all the ticket revenues, all the money from the parking lots and concession stands.

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