On Vultures and Red Wings: Billionaire Gets New Sports Arena in Bankrupt Detroit

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This article first appeared in The Nation.

Detroit Bankruptcy Sports
Championship banners and retired numbers of the Detroit Red Wings hockey team hang from the rafters above the ice at Joe Louis Arena -- the team's current stadium -- in Detroit. (AP Photo/Paul Sancya, File)

The headline juxtaposition boggles the mind. You have, on one day, “Detroit Files Largest Municipal Bankruptcy in History.” Then on the next, you have “Detroit Plans to Pay For New Red Wings Hockey Arena Despite Bankruptcy.

Yes, the very week Michigan Governor Rick Snyder granted a state-appointed emergency manager’s request to declare the Motor City bankrupt, the Tea Party governor gave a big thumbs-up to a plan for a new $650 million Detroit Red Wings hockey arena. Almost half of that $650 million will be paid with public funds.

This is actually happening. City services are being cut to the bone. Fighting fires, emergency medical care and trash collection are now precarious operations. Retired municipal workers will have their $19,000 in annual pensions dramatically slashed. Even the artwork in the city art museum will be sold off piece by piece. This will include a mural by the great radical artist Diego Rivera that’s a celebration of what the auto industry would look like in a socialist future. As Stephen Colbert said, the leading bidder will be “the museum of irony.”

They don’t have money to keep the art on the walls. They do have $283 million to subsidize a new arena for Red Wings owner and founder of America’s worst pizza-pizza chain, Little Caesar’s, Mike Ilitch, whose family is worth $2.7 billion dollars. (“Friends! Romans! Countrymen! Lend me your pensions!”)

How did Governor Snyder possibly summon the shamelessness to justify this?

Here’s how. He said, “This is part of investing in Detroit’s future, That’s the message we need to get across.… As we stabilize the city government’s finances, as we address those issues and improve services, Detroit moves from a place where people might have had a negative impression…to being a place that will be recognized across the world as a place of great value and a place to invest.”

Where, oh where have we heard this argument before? What city has heard the false promise that stadium construction on the public dime would be a postindustrial life raft? There are actually many, but none have heard it more and paid the cost quite like Detroit. A new Red Wings arena would be the city’s third publicly funded major sports stadium, joining the Tigers’ Comerica Stadium and the Lions’ Ford Field. Each of these was billed as a “remedy” to save the city. Each of these has obviously failed. Fool us once, shame on you. Fool us twice, shame on us. Try to fool us three times? Go to hell.

I spoke with Marvin Surkin, co-author of the classic book Detroit: I Do Mind Dying. He said, “These are more than just remedies that didn’t work. They are part of the problem because stadiums don’t address the central issues of falling population, falling tax base, declining wages, unemployment and the underfunding of schools.”

Surkin is correct. If anything, this kind of corporate welfare has over the last generation exacerbated Detroit’s existing problems. Why? Because it siphons money out of the city services — things like schools and hospitals — while creating the very kinds of jobs that are the antithesis to those that once built Detroit into the third-largest city in the United States. No living wages. No job security. No tax base. Just spanking new stadiums for suburban sports fans, which Detroit residents will be able to enter only if they’re selling foam novelty fingers.

An abandoned home north of Detroit's downtown. (AP Photo/Carlos Osorio)

As Neal DeMause, who runs the indispensable website Field of Schemes, said to me:

“There’s absolutely no reason on earth that the state of Michigan couldn’t say to Mike Ilitch, ‘Sorry, Detroit has more important things to do with its money.’ Instead, though, the governor seems content to let Ilitch cut to the front of the line for public funds, on the grounds that ‘who doesn’t get fired up’ about hockey. Even if you limited it to economic development projects, putting money into fixing city schools or restoring streetlights would do far more for Detroit’s business prospects than a hockey arena. This just goes to show the problem with carving out shares of tax revenue to go to development authorities — they end up basically serving as slush funds for developers, even when the city treasury is otherwise empty.”

There is a right-wing narrative about Detroit that the city is in peril because of some combination of the 1967 “race riots” and greedy unions. The reality is that black and brown residents of Detroit made Motown and those “greedy unions” built a stable working class that could realistically dream of a better life for their own children. The breaking of Detroit should be seen, the words of David Sirota, as an indictment of right wing economic orthodoxy. Instead, the bankruptcy has been used as a warning to other cities that unions, pensions and a culture of resistance are roads to ruin.

With this Red Wings arena, Snyder, Ilitch, and their ilk may have gone too far. The commitment of Detroit’s corporate masters to this stadium project actually acts like an autopsy, revealing who has really destroyed the Motor City. As legendary Detroit activist Grace Lee Boggs put it, a conservative agenda has “been strip mining cities by privatizing almost all services, attacking public workers and their unions, while at the same time providing billion-dollar tax cuts for large businesses and cutting revenue sharing to the cities.” In a city that’s 83 percent African-American and built on union labor, it’s a pelt long desired by the Snyders of this world. Neoliberalism has destroyed Detroit. Free trade deals have destroyed Detroit. Corporate welfare has destroyed Detroit. It’s perverse of Snyder and Detroit’s anti-union, pro-stadium mayor — and NBA hall-of-famer — Dave Bing to see stadiums as symbols of Detroit’s revival. They are symbols instead of its decline.

More and more people across the world are getting wise to these kinds of priorities. Perhaps Detroit should keep its eyes on Brazil, where mass discontent with the quality of schools, hospitals and the government led to marches on stadiums built or refurbished for the 2014 World Cup and 2016 Olympics. One of the slogans amongst the Brazilian masses was “A giant awakes. Come to the streets.” In Detroit, if no one can afford to go to the game they might have no choice but to come to the streets.

Dave Zirin, The Nation’s sports correspondent, is the author, most recently, of Game Over: How Politics Has Turned the Sports World Upside Down. Named one of UTNE Reader’s “50 Visionaries Who Are Changing Our World,” Zirin is a frequent guest on MSNBC, ESPN and Democracy Now! He also hosts his own weekly Sirius XM show, Edge of Sports Radio. You can find all his work at edgeofsports.com.
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  • Marshall J.

    Illitch investing 367 million dollars of his own money is barely corporate welfare! Other struggling cities have had projects with a much greater percentage get publicly funded and the city has thrived. For example, Cleveland, who was suffering in the early 90’s from job loss, racial tension and population outflow (sound familiar!?) built Progressive Field. Infrastructure projects and private investment in the city grew from $1.85 billion in the 80’s to $4.1 billion from 1995-2003. Many argue that this is why Cleveland itself hasn’t gone under. Similar projects can be found in San Francisco, San Diego, and Indianapolis, just to name a few.

    I understand the “start cutting” philosophy, but take a step back – what else can you cut? The more you invest in the city of Detroit, the more we’re sure to get out of it. Previous stadium projects in the city have been considered successful and are the only reason Detroit has lasted this long. People need to be more understanding and open-minded to this investment.

  • Jon

    Its more a case of the Governor and business community having written off the population and neighborhoods in favor of promoting the redevelopment of the depopulated downtown. The business community sees tremendous profit potential from bargain priced downtown properties- if they can get rid of those pesky poor residents. Pay suburbanites to live in downtown and midtown, make the neighborhoods uninhabitable so the population leaves and you have the makings of urban renewal conservative style.

  • Anonymous

    “Almost half of that $650 million will be paid with public funds.” Perhaps you forgot to mention that? So, that’s not a form of Corporate welfare? If it’s not, that’s quite a bizarre definition…if it’s an ‘investment’ than he can find private investors for the funding.

  • moderator

    Hi Everyone,

    Please read our comment policy before commenting. Personal attacks will cause your comment to be removed and limit your ability to participate in our community.

    Sean @ Moyers

  • http://www.facebook.com/people/Jason-James-Rubadeau/1841753146 Jason James Rubadeau

    Did you not read the article. This man is investing PUBLIC funds for private profit, something they have already done-twice, and it DID NOT WORK. Do you work for the red Wings or something?

  • Sam Duncan

    The differences between Cleveland and Detroit are vast. First, Case Western Reserve University and the University Hospital Medical School contribute greatly to drawing more people into Cleveland. Second, the building and investments in Cleveland have been particularly focused on the Cleveland Clinic (one of the nation’s top hospitals) and in the city’s cultural attractions (the theater district, the museums, and the Cleveland Symphony Orchestra. Those are exactly the kind of cultural assets Detroit is talking about selling off. Progressive Field would’ve done no more for Cleveland than the same type of corporate externalization onto the taxpayer we see in Detroit without those efforts to bolster less transient investments. The question isn’t between cutting and investment, it’s about the right kind of investments for long term growth. Subsidizing sports stadiums for wealthy team owners who could build it without taxpayer money is not a wise or helpful long term investment.

  • Anonymous

    Sounds like a state that needs a new governor & state legslature.

  • ray johns

    Governor Snyder should offer the city of Detroit half of the $650 Million dollars to help save the city workers pension fund and put towards improving inner-core development , razing dilapidated housing and rebuild new mixed residential/business dwellings, mass transit,improvement to the city parks and recreation services, and improved schools , libraries ,and museums downtown. There also ought to be a surtax on all sports tickets sold to Tigers, Red Wings and Lions games –the new revenue can go into a general city fund bank –a kind of low-interest , community credit union for low-income wage earners , the poor, and elderly resident on fixed incomes. The other half of the funding needed to build the new professional ice arena can come from a public/private partnership or scrap building a new arena and find an inner-city Detroit ice skating arena already built that can be refurbished — with some of the labor coming from Detroit’s unemployment rolls first.

  • MVD

    The players are behind the citizens but the money men are out for themselves.

  • Facebook User

    this is the fault of DETROITERS for WHAT the voted for and WHO as http://www.detroit1st.com PROVES

  • Mase

    If a democratic Gov did this he’d be hung out to dry and burned in effigy. Spending MORE of the publics hard earned dollars!?! Socialist landscape building!

  • Anonymous

    A majority of the citizens voted them into office, you can’t lay all the blame on the politicians !

  • Anonymous

    The case has been made that the private business policies of the corporate Boards of Directors for the big three auto manufacturers had more to do with the long term degradation of the city of Detroit than any state or city government office holders. The fall of Detroit has been going on for over sixty years as corporate management sought to reverse the tremendous gains made over the years by auto labor unions. Ross Perot addressed this issue over twenty years ago when he was a major investor in GM, management was so fixated on trashing labor gains, that they formerly agreed to, and promoting their financial arms as production was outsourced to low wage locations, that the product they produced became junk and now they are paying the cost as most Americans are now driving foreign brands ! Most American corporate products now proudly display the placard “Not Made In America”.

  • Anonymous

    Times are bad on millionaire row, they need help provided by the complicit dupes who are always ready and willing to be gouged, the taxpayers !

    Arlington, Texas, the city of amusement theme parks and sports franchises between Fort Worth and Dallas Texas. Future president to be G.W. Bush and his investment group tap the taxpayers of Arlington to pay for their new stadium for their sports team, the Texas Rangers. No worry, this new stadium will quickly payback the expenditure made by the tax payers and fill the pockets of our private investors. Not too much later, G.W. cashed out and was rewarded handsomely for simply being a newsworthy member of this private group.

    Arlington, Texas, Jerry Jones gets a better offer from Arlington to build his new stadium in their city and dumps Irving, Texas who hosted his teams former home stadium for decades. But Jerry now admits that he has come upon hard times as he has overextended himself on this project, that the good taxpayers of Arlington funded in large part through their taxes. Wanting to insure his team’s loyal fans that the franchise will continue under his wise management, he has struck an unpopular deal with AT&T to change the name of Cowboy stadium to AT&T Arena, Yet another Corporate flag planted to claim their total dominance in this country, Jerry’s bank account is replenished, and the tax payers of Arlington can take a leap into the abyss !

  • Bubba912

    Wow. The project seems like a huge waste. As for blaming corporations, you might notice that cars are still being built in the US, in places like Georgia and Tennessee, mostly by corporations from outside the US. Both past management and labor can bel blamed. They had a huge industry and managed to lose it, destroying a whole city. It’s a classic example of lack of leadership by both sides, and the blaming continues, long after there is nothing left to fight over. Sad.

  • Anonymous

    Harrumph!!! You forgot the most important public works project that Detroit FAILED to undertake… and that’s was to build a giant Iron Curtain style wall to keep the population from fleeing the doomed as always to fail left wing economic policies and Mayor Coleman Young’s racist governence.

  • Awed

    I hope you realize that it’s not as easy as reallocating money….if they don’t build the stadium it’s not like Detroit saves that money to spend on another project. That’s not how budgets work.

  • Anonymous

    This article is wrought with error. Those stadiums were huge boosts to the city. I’ve been going to Detroit my whole life, and that part of the city actually seems populated, so to say they are failures is flat out wrong. Plus the decision to sell the art has been debated and doesn’t look like it’s going to happen according to local news.

  • MotorMouth

    This is a sloppy story, a mishmash of half-truths connected
    in ways that seem to support its writer’s opening premise rather follow than
    the actual facts. It’s the kind of story one might expect to find at Fox News
    rather on a progressive thinking site such as this.

    Its first falsity is the “either/or” premise of public
    funding, that if the state of Michigan pays for a new stadium in Detroit then it
    can’t or won’t protect the art collection at the Detroit Institute of Arts or
    cover the pensions of its municipal retirees.

    These other separate issues are still in play. The famously
    stingy Republican-controlled state legislature has indicated that it is
    prepared to come to the defense of the DIA, and a conservative-leaning state attorney
    general has filed a motion on behalf of protecting the worker’s pensions, as
    the state’s constitution requires him to do.

    How vigorously either of these parties will act on these
    issues may be cause for concern, but it’s not like these issues have already
    been settled.

    Another wrongly-framed aspect in this article is the false correlation
    between the state’s speed to come up with money for this project and their
    delay in taking up the city’s major obligations. Fact is, there’s a big
    difference between $283 million for a hockey stadium and the $20 billion debt that
    the state-appointed emergency manager has claimed in the city’s bankruptcy
    filing. While his estimated debt may be greatly inflated, even less bloated
    estimates of Detroit’s debt are still more than 50 times that of the public
    share for a new arena.

    So for those in state office who refuse to accept that the
    health of Michigan rides on the health of its largest municipality, it’s a hell
    of a lot easier for them to throw their support to a prima facia revenue-generating
    project that’s a fraction of the cost of a big-city bail-out and the meshugas
    that would surely follow.

    For the moment, conservative voices in Michigan have
    “won the argument” that Detroit’s problem can be solved by filing for
    a quick bankruptcy on the basis of efficiency. Sadly, they are correct in
    asserting that a dictator—in this case, an emergency manager—is a lot more effective
    at reneging on promises made to the residents, workers, and retirees of the
    city than a messy democracy would be.

    But how does such a distortion of American principles negate
    this particular region of Michigan’s desire to invest in something that it
    generally considers an important part of its future? Around here, Detroit is
    known as “Hockeytown.” This city is one of the original six members
    of the NHL. This city has been and is and will be defined in large part by one
    of its favorite hometown teams: the Detroit Red Wings.

    As for other teams and sports venues in Detroit, the writer
    says that Comerica Park and Ford Field are failures. I don’t think it’s
    accurate as the article claims to state that each was billed as a “remedy
    to save the city,” as much as they offered up as ways to draw more people into
    Detroit, to create more tourists, more pedestrians, to put more people on the
    streets of the city. Last year, for example, Comerica Park drew a
    record-setting 3 million-plus fans into this town of 750,000 to root for their
    hometown Tigers and this year looks to do even better.

    The new hockey arena is going to be built on the other side
    of a freeway near these two existing stadiums, effectively expanding the
    footprint of the big-city sports attractions in this area of Detroit. It also
    opens up land along the riverfront for the development of better, more
    people-friendly projects, such as office space and housing, where the
    “Joe” now stands.

    Finally, I take issue with a few more misstatements in this article.

    I can think of plenty of insults I’d like to hurl at Mr.
    Snyder, but I cannot accuse him of being a “Tea Party governor.” A
    corporate bully, a hyper-sensitive non-collaborator, maybe, But a member of the
    Tea Party, no. (As for many of the members of the state legislature, that’s
    another story.)

    Next, I doubt that Mr. Ilitch would consider himself to be
    among the governor’s “ilk.” His daughter, Denise Ilitch, nearly ran
    against Mr. Snyder for the office of Michigan governor at the urging of Barack
    Obama’s administration.

    And, lastly, it is a vast over-statement to call Little
    Caesar’s the “America’s worst pizza chain.” Has this writer never
    been to Chuck E. Cheese’s?

    While it may be true that stadiums “don’t address the
    central issues” of falling populations, tax bases, wages, employment, and
    school funding, it’s far too simplistic to blame Detroit’s present state on
    “corporate welfare.”

    And if, as this article’s writer prophesizes, that the
    people of Detroit do in fact “come to the streets” because of this
    new arena, it’s my guess that it will be much more likely to celebrate the
    winning of yet another Stanley Cup.

  • m1990

    The writer needs to go back and look over the scope of work before declaring this a $650 million hockey arena…

  • Michigander Flatlander

    I got a letter in the past year or so from my credit union in Michigan, saying my IRA will be taxed by State of Michigan when I retire. Thanks Governor Rick Snyder for raising taxes. I called the credit union and found out that it only applies to Michigan residents. So if I ever move back to Michigan, I will have to pay the “Rick Snyder TAX”. So maybe I will retire where I am now and just “visit” my family in Michigan. Maybe I will visit in 2014 election cycle and campaign against Governor Snyder.

    Corporate Welfare for the Ilitch Family. Screw the pensioners. Way to go Prick Snyder!

  • t bone

    i do think its bs about the city workers getting their pensions cut,but education in detroit….really 3/4 will be in prisons anyway