What the Ilitches Got and Where It Came From

May 27, 2019

The city of Detroit gave the Ilitches 324 million dollars for the construction of Little Caesars Arena. Since the city technically owns the LCA, the Ilitches no longer pay property taxes on it like they did on the Joe Louis Arena. They were, however, given the rights to 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.

They were promised another 74 million dollars if they could show they brought in another 200 million dollars in investment to the area. The Detroit Downtown Development Authority recently announced the Ilitches met that goal. They did so with the construction of two parking garages and a headquarters for Little Caesars pizza, plus an office for Google, none of which the residents of the area expect to see much benefit from.

Much of the money the city paid for the LCA construction even came out of money supposedly intended for the Detroit Public Schools. The city sold 250 million dollars in bonds. The money to repay the bonds will come from Tax Increment Funds, or TIFs. TIF money comes out of property taxes collected from the area. Property taxes generally go to funding the public schools, and require voters to approve through a millage election. So in 2012, the city asked voters to approve a millage which it advertised as needed to improve Detroit’s public schools.

So, the Ilitches get hundreds of millions, a new arena for the hockey team to play in, the profits from all sales and concessions from the arena, a new corporate headquarters, and an office for Google. The city residents got parking lots and underfunded schools. Not much of a deal!