The Detroit Stadium: A Losing Deal For The City

In my last post, I interviewed Father Kelly about the Detroit Redwings Stadium Development. He was very much in favor of it, saying that it would bring many visitors as well as residents into the city, and by extension, his church. As I am writing about a democratic failure, I did not necessarily agree with him, but I wanted to include both sides of the argument. However, I have yet to discover any concrete evidence that this project will actually benefit the residents of the city of Detroit. In fact, all of the evidence I have found indicates a possibility of the city losing money, jobs, and residents as a result of the development. Additionally, the city is subsidizing men and corporations worth billions of dollars, diverting money directly from the Michigan School Aid Fund (about $15 million a year). In reality, the development is only good for the visitors and Mike Ilitch. The local people of Detroit are left picking up the bill, paying an estimated 60% of the $650 million arena.

I interviewed an instructor of social work at the University of Michigan named Shari – a graduate of the University of Alabama with a masters in social work and anthropology from Wayne State University. She has lived on the northwest side of Detroit all her life, and currently teaches a course at Michigan which educates social justice minors on the concept of urban gentrification versus urban renewal. I spoke to her about the development and what she believes it will mean for the current residents of Detroit. “I don’t think we need a new stadium”, she said. “There are other things Detroit needs, and this is the same conversation we had when he [Ilitch] was building the Detroit Tigers Stadium. They say it’s going to bring more people and more revenue, and where has it gone? This has been happening since the 70’s, and 80’s. People are still living in dilapidated, desolate areas within walking distance of downtown.” Stimulation of the local economy through urban development and stadium building is not a new idea and has been studied thoroughly. The results of these studies prove Shari’s point to be not just an informal observation, but a cold hard fact. Eighty-six percent of economists agree that sports stadium subsidies are detrimental, with an average loss of 1,924 jobs, and an extremely low rate of return for the cities on their investment.

Coffee shop in Corktown, renovated district of Detroit.

In addition to this, Shari went on to mention what she believes this project actually is. “It’s not urban renewal, it’s gentrification. Once gentrification happens it raises property values. The side effect of this is that the people who have been living there for generations are no longer going to be able to afford to live there.” This is a terrible deal for those of low socioeconomic status living the area, and it certainly won’t help the businesspeople of the Joe Louis arena (the current Red Wings arena which will be torn down for the new one). In addition to the wishful thinking of the development’s revenue projections and the ignorance towards the obvious gentrification occurring, the city will absorb most of the risk of this investment. Ilitch has decided to lease the Stadium, which allows him to walk away at any time. This way, he does not pay property taxes. Additionally, he keeps all of the profit from the sales in the stadium. This deal is unequivocally bad for the city, and yet people still buy the narrative that it will help. “Those are private businesses at and around the stadium. People just go with what sounds good, so if you’re a businessperson, and someone comes up to you with a plan to get people into the city, you’re going to go right along with it”, says Shari. Perhaps she is right, and perhaps the people are easily swayed by promises of a better future, regardless of whether those promises are feasible at all.

Something needs to change, and drastically. We need to have new checks and balances in place to prevent plans like these that help for-profit enterprises at the expense of the taxpayers. Not only this, but we need to look at the bad decisions the city council has made in the wake of Detroit’s municipal bankruptcy. The council should be restrained enough so that they can be financially responsible, while still giving them enough leeway to enact the will of the people. I have developed a plan that I believe solves these problems, though it may require a fundamental restructuring of the Detroit charter. To explain further would no doubt take me an entire post, so I’ll leave this one as it is, and start my work on the next one. See you in about two weeks.