Detroit files for bankruptcy protection

[404.livejournal.com]

So apparently the city of Detroit is having to file for Chapter 9 bankruptcy, to help the city restructure the 18.5 billion dollars in debt it owes to creditors. Less than a month ago, the city of Detroit diverted roughly 283 million dollars from economic development funds to help fund a new arena for the Detroit Red Wings, the hockey team owned by billionaire Mike Ilitch, who just so happens to own the Detroit Tigers. The Togers got their new stadium, also partially publicly financed in the early 2000's.

From an Associated Press story about the financing of the new Red Wings stadium:
Michigan lawmakers in December approved a measure allowing tax dollars collected by the Downtown Development Authority to be used for the development. The DDA has been allowed for nearly two decades to pay down Detroit's general obligation bonds with about $12.8 million a year that otherwise would have gone to education statewide.
http://redwings.nhl.com/club/news.htm?id=674634

Over the first decade plus, the state of Michigan and Wayne County (the principal county for Detroit) have or will have contributed public funds to build three new stadiums for owners that are billionaires (Illitch owns the Red Wings and the Tigers, the Ford family, of the Ford Corporation owns the Lions, the football team that plays in Ford Field) while the finances for the state and city have been dangerously close to default. The Ford family and Mike Ilitch must be taking their cues from the OCP Corporation and Dick Jones:

I say good business is where you find it.

In a previous post, I discussed the billion dollar albatross that is the Miami Marlins ball park, and how Jeffrey Loria basically conned the city Miami residents into paying for a new stadium, and then turns the club that occupies the park into a minor league team bereft of much talent. This is not the same for Detroit, the teams are doing well in their respective leagues (except for the Lions, but well, they are the Lions, so maybe next year), but it seems unconscionable for a city to pony up or to guarantee loans for a stadium when the city finances are a mess. The city has been a punchline for decades. Hell, in RoboCop 2 (1990), OCP banks on the city to default on their loans, so demolition can start of the old city, to be replaced by Delta City. This is only averted when the city is given an emergency loan from unknown sources, but I'll let you watch the movie for spoilers!

Still, I still am not convinced that owners of sports teams deserve to be supported by public funding to build a stadium they will profit off of. It would be the same as if Disney Corporation asking Orlando to finance the building of Disney Land, with the theory of the city owning part of the property, but the Disney Corporation would keep all the profits, except for the "rent" they pay the city, which is much smaller than would be required if Disney had gone in on their own. If that's not a sweetheart deal,  I've never heard of one then. Do sports stadiums improve cities they are in? Sure. Do they bring in more jobs and revenue to cities? Possibly. Should a city/state that is in major financial difficulty allocate funds that are needed elsewhere so the Ilitches and the Fordes  of the world can have sparkly new stadiums at the expense of the citizens? Apparently the citizens of Detroit did.

I love new stadiums like everyone does. When I was a kid, I started drawing diagrams for new baseball and football stadiums on paper, and when I heard about a new stadium being built, I was excited and looked forward to being able to see it on TV the next time it was on TV. I think politicians get this sort of fever, a cross between city pride and personal interest: what mayor wouldn't love to be known as the one who got the new stadium built for his hometown team? Mayor Kasim Reed of my hometown of Atlanta, seems to feel that way: he and Arthur Blank, the owner of the Falcons have, for all intents and purposes, tied the faith and credit of Atlanta to the new Falcons stadium, to the tune of 300 million dollars. The stadium, which I personally love the design of (I am not a big fan of the "retro style" ballparks that have been popular of the last few years):

Not pictured: what the stadium looks like when the alien mother returns

The question remains, how should cities balance the needs and desires of their local teams with the needs of the citizens, even if they want to help pay for a stadium they will probably never set foot into, with the cost and hassle of a sporting event like football, it pays to stay at home and watch it on TV.

Comments

[fizzyland.livejournal.com]

We need a domestic car revival and I think the 6000 SUX could do it.

[404.livejournal.com]

[fizzyland.livejournal.com]

They can't reboot Robocop any more than they could Total Recall.

[major-dallas.livejournal.com]

ummmm:

[fizzyland.livejournal.com]

The first was thoroughly entertaining, the remake a snoozefest.

The Robocop remake will be equally joyless, I predict.

[telemann.livejournal.com]

The Robocop remake seems like it's going to be fun (Samuel Jackson is in it after all). As for the Total Recall remake, it grew on me on subsequent viewings; and it has moments of brilliance, e.g. the design for Rekall as if it were an opium den, that was pure designer genius. The director's cut of Total Recall absolutely makes it clear for that version with the scene at the end: Doug Quaid was in a dream, and none of it occurred in reality.

But still, several friends think it blew badly.

[peristaltor.livejournal.com]

Excuse me, but no one has turned "We Can Remember It For You Wholesale" into a decent movie. Dan O'Bannon could have, if Ronald Shushett hadn't taken his take and made the first crap movie.

O'Bannon's take would have been awesome.

[fizzyland.livejournal.com]

Phillip K Dick was too smart for Hollywood to adapt decently, much like Harlan Ellison. Total Recall was good for what it was - Paul Vehoeven & Arnold doing their low budget best. With some of my favorite supporting actors of the time.

[brother-dour.livejournal.com]

Urban planner here. But then again, ya'll knew that.

Pro sports stadiums are tricky business. There's more than one example of cities getting raked over the coals by their pro sports teams demands to stay (Atlanta and their Falcons, for example), and even good, long-term relationships like Houston and their Astros are lacking in data regarding how much money the team brings in versus the goodies the city has to give up to get or keep a pro sports team. The Chambers of Commerce claim up and down it's great, but there's many different ways to crunch numbers to make it look great...

Personally, I think it would be awesome if all the major cities in the U.S. would get together and agree to stop offering pro sports teams anything. Let the sports teams bleed themselves dry for the privilege of playing instead of the other way around.

[musicpsych.livejournal.com]

I agree. It's mind-boggling how much money is raked in by professional sports. They should be able to afford it.

[telemann.livejournal.com]

Totally, yearly revenue (these figures are AFTER revenue-sharing with players, etc)

Top Five Revenue Teams
1. New York Yankees, $441 million
2. New York Mets, $268 million
3. Boston Red Sox, $266 million
4. Los Angeles Dodgers, $247 million
5. Chicago Cubs $246 million

Bottom Five Revenue Teams
30. Florida Marlins, $144 million
29. Pittsburgh Pirates, $145 million
28. Oakland Athletics, $155 million
27. Kansas City Royals, $155 million
26. Tampa Bay Rays, $156 million

http://sportsillustrated.cnn.com/2010/writers/joe_posnanski/04/19/baseball.revenue/index.html#ixzz2ZSUyJaEk

[musicpsych.livejournal.com]

That's actually not as much as I thought it was. Thanks for the info.

One would think that, like any business, the facility cost and maintenance would be part of the operating costs. I'm sure other businesses might try to negotiate with a city for smaller things, like preferred interest rates, etc. But not to blatantly fund part of the building cost.

[stewstewstewdio.livejournal.com]

A little more Dick Jones-like:

[fizzyland.livejournal.com]

"It's just a glitch!"

[papasha-mueller.livejournal.com]

I've heard one Russian is going to buy Detroit?

[abomvubuso.livejournal.com]

Those Russians are always there to save the day!

[papasha-mueller.livejournal.com]

Always were.

[johnny9fingers.livejournal.com]

I thought about selling my garage and buying a street or two...but garage space is at a premium in London.

[papasha-mueller.livejournal.com]

Then you convert a street into multi-garage...

'Been there, done it, have a T-shirt' (c)

[prisoner--24601.livejournal.com]

Well to be fair, Detroit's problems go way, way beyond the fact that public money was used to build those sports stadiums. It would have had to go bankrupt eventually, regardless. Plus I think it's not just the people of Detroit on the hook for them - they used money from the State of Michigan as well as Wayne County (which is not entirely Detroit). At any rate, I'm really not a fan of using public money to fund sports stadiums that make huge profits for the private owners, especially when there were already functional stadiums in place (if not nearly as nice. I will say they did an awesome job on both Ford Field and Comerica Park).

On the other hand, the business brought into the struggling downtown area from all of the people coming in to watch hockey, football and baseball games, is pretty damned significant and probably the biggest chunk of jobs, tax revenue and business profits down there. Without those three stadiums fueling the large chunk of the economy down there, Detroit would be an even more desolate place than it already is. I mean, it's more than just the owners of teams getting money from ticket sales. A lot of jobs down there are fueled by all of the incidentals from the people who come down there to go to a sports game and spend money on other things like hotels, restaurants, parking, gambling, etc... And when those sports teams aren't down there playing - like say with the Hockey strike last year, the entire economy down there struggles horribly because unlike other cities such as New York or Chicago, there aren't enough other business down there to fill that vacuum.

So I guess I'd rather have our tax money spent this way than say, spent directly on the city of Detroit directly, because considering what a corrupt mess Detroit is, the Michigan taxpayers at least get something tangible out of dumping money into this instead of watching it disappear into what amounts to a financial black hole.

[peristaltor.livejournal.com]

No matter what they decide to blow the money on, Detroit will eventually have to wake up to the fact that it is now broke. Yes, it was once the 7th largest economy on the planet. That is over. Cars are getting close to their peak, and now they're made everywhere but Detroit.

Detroit is the canary in the economy's coal mine, and how they deal with their inevitable contraction will prove instructive to those of us remaining.

[harry-beast.livejournal.com]

Cities should focus on doing what they are supposed to do: manage infrastructure, ensure safety, deliver public services. Cities shouldn't finance or build stadiums for sports teams. The limit of their involvement should be to build and maintain city parks and sports fields for local leagues and recreational athletes.

[brother-dour.livejournal.com]

I know this thread is a bit stale, but I thought this article I found today was pertinent:

http://blog.preservationleadershipforum.org/2013/07/26/preservation-and-rightsizing/ (http://blog.preservationleadershipforum.org/2013/07/26/preservation-and-rightsizing/)

Its written from the standpoint of historic preservation, but it does talk a bit about why Detroit has pretty much no choice but to forcibly shrink its infrastructure.