Economics

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Sports Facilities as the Remedy for Urban Blight?

27 Jan, 2015

By: Tracey Schelmetic
Detroit, Milwaukee Eyeing Arena Redevelopment as Positive Step

No doubt about it: sports facilities have the power to bring crowds, attention, tourism, activity – and income – to cities. That makes a depressed or underserved area of town a prime candidate for such a venue, right?

Well – it’s more complicated than that.

Proposed sports arenas are often contentious projects. Managed properly, they have the potential to make a small handful of well-connected people very wealthy. They certainly please hardcore sports fans. For many taxpayers and commuters, however, arenas are often viewed as an unnecessary expense that will bring crowds and traffic to downtown urban areas. To local small business owners, the arenas and the large, prominent chain restaurants and retail stores they often bring with them represent competition.

For a city without much to lose, however, the proposal of a new arena might be met with cautious approval by nearly everyone. This is the case in Detroit, where the wealthy Ilitch family, owners of the Detroit Red Wings and Detroit Tigers, have proposed to put a new $450 million, 650,000-square-foot arena for the Red Wings in a blighted area of the city (which is notorious for blight) just north of downtown. In addition to the arena, the family plans to invest at least $200 million in five new neighborhoods that may ultimately remake 50 blocks of Detroit with mixed-use development and replace trash-covered lots and dangerously dilapidated buildings, according to the Milwaukee Journal Sentinel.

“Now that the city has hit rock bottom, anything that resembles a change in the status quo is viewed as progress,” according to the JS’s Don Walker. “To buttress that point, backers of the plan say District Detroit, as the project is being called, will be ‘Detroit-built, Detroit-made and Michigan-made.’”

Both the Ilitch family and the development’s supporters say the project could create $1.8 billion in economic impact for the city, along with 8,300 construction and construction-related jobs for area residents – and even hundreds of apartments around the arena. While ground was broken for the arena in September, the extended development around the new stadium is still in early stages.

The reason the Milwaukee Journal Sentinel is so interested in Detroit’s project is that a similar scenario is about to play out in that city. The new owners of the Milwaukee Bucks have proposed a new arena in the Park East corridor in downtown Milwaukee that will accomplish a similar goal: remake an area of the city that badly needs development, and meet the NBA demand that the Bucks have a new arena in place by 2017.

Wisconsin Governor Scott Walker recently unveiled a funding plan for the new arena that takes a “Pay Their Way” approach that would create a Sports and Entertainment District for the city. The plan would provide bonding authority to pay back a $220 million grant for the new arena and surrounding development, in the form of an appropriation bond issuance, paid back by projected growth in income taxes from the Bucks, according to local Fox news affiliate Fox 6 Now, and without tapping scant public funds. Supporters of the project are thought to be looking at land north of the BMO Harris Bradley Center for the new multipurpose arena.

Other cities have experimented with sports arenas and complexes to help redevelop blighted areas, many with a great deal of success. In Ohio, NHL team the Columbus Blue Jackets brought a state-of-the-art arena to the city in 2000, redeveloping a run-down part of the city and turned it into a vibrant urban hub.

Both Milwaukee and Detroit will have some hurdles to face over the next few years in terms of raising money and overcoming red tape, but the end results may help transform areas of the respective cities that have thus far been resistant to all other efforts.

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