The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Little Caesar’s Arena
—a Monumental Rip-off

Sep 18, 2017

Detroit’s new Little Caesar’s Arena opened up with great fanfare, complete with a series of concerts by Kid Rock. Rock at one time flew the confederate flag at his concerts and recently slammed Colin Kaepernick for protesting police brutality by refusing to stand for the national anthem.

The choice of Kid Rock is not the only disgusting symbol being directed at the city’s residents. The entire project to develop the arena and the surrounding area stands as one giant monument to a huge scam run by state and local officials, all to hand over hundreds of millions of dollars to the family of the late billionaire Mike Ilitch.

The Ilitch family are the owners of Little Caesar’s Pizza, the Detroit Red Wings hockey team, the Detroit Tigers baseball team, and the Motor City Casino. They and their partners stand to receive at least close to 400 million dollars in direct funding from the Detroit Downtown Development Authority (DDA) toward much of the cost of building the new arena, which will be home to the Red Wings.

The city’s contribution was initially announced as 250 million dollars but rose to 345 million when Ilitch’s entertainment arm, Olympia Entertainment, came to an agreement with the Detroit Pistons owner to also move the basketball team into the arena.

The funds the DDA is throwing into the construction will come from bonds it sold, which it will pay back through the use of tax increment financing (TIF) collected from property taxes on businesses in downtown. Even before the DDA sold the initial 250 million in bonds for the arena’s construction, it had already handed over 35 million dollars in TIF money from 2010 to 2014!

The Ilitches also get another 74 million dollars if they show they “caused” another 200 million in added development.

Proponents of the deal like to say that “private funding” will pay for part of the arena’s construction. But this is all just sleight of hand.

As part of the deal cut with the DDA, the Ilitches will receive all the revenue from the arena, including parking, food and beverage sales, souvenirs, TV and radio broadcasting contracts, fees for luxury suites, and naming rights. The DDA, on the other hand, will get back nothing in tax money from the arena, because it technically owns the property and simply “leases” it to Olympia Entertainment. In other words, in reality the DDA is paying for 100 percent of the arena’s construction.

In 1982, Mike Ilitch bought the Red Wings for 8 million dollars. After the announcement of the new arena, Forbes magazine valued Ilitch’s Red Wings at 450 million dollars and the Tigers, also owned by Ilitch, at 643 million.

In addition to the financial handout the DDA contributed, it also handed over 39 parcels of land to the Ilitches for a $1.

All this means the Iitches stand to reap well over a billion dollars from their deal with the city, while the rest of Detroit and the schools are left to rot.