Detroit

Detroit Council Dunks on Taxpayers, Will Use School Funds for Basketball Arena

This is why Detroit can't have nice things.

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Julian H. Gonzalez/KRT/Newscom

Taxpayer-funded bonds sold to raise revenue for parks and schools in cash-strapped Detroit will instead be used to lure its professional basketball team back into the city.

The Detroit Pistons have played out in the suburbs (first in Pontiac, now in Auburn Hills) since 1977, but will relocate to a new downtown arena thanks to $34 million in incentives approved by the Detroit City Council.

Taxpayers are already on the hook for more than $300 million of the $900 million construction cost for new Little Caesars Arena, built to host the Detroit Red Wings of the National Hockey League. The additional spending will make the arena suitable for basketball and help pay for new practice facility and front office for the Pistons.

Michigan Radio reported this week that "some Detroiters are unhappy with the deal because the bonds are taxpayer funded with money originally intended for schools and parks."

As well they should be. In a city still recovering from bankruptcy, local officials might have found better ways to use $34 million. It's a fair question whether government should be spending money on parks and schools, but it's certainly a more core function than throwing cash at billionaire team owners. Tom Gores, who owns the Pistons, is worth an estimated $3.3 billion.

But it gets worse. As the Detroit Free Press reported earlier this month, local activists filed a lawsuit to block the stadium spending. The city asked the judge to dismiss the case, making several laughable claims about why it was essential to spend money on the stadium project, instead of using the money to help fund the city's public schools (which are $500 million in debt, by the way).

Stopping the project, the city's attorneys argued, would be "devastating" to Detroit's "remarkable comeback story."

"Post-bankruptcy, the city cannot expect lenders to extend unsecured credit at reasonable rates, so its debt has been limited to secured transactions, tied to specific revenue streams," the attorneys write. "The default on any of that debt would significantly affect the ability of the city to attract investors. The city is currently engaged in a bond offering to raise funds to rebuild neighborhoods. A default on DDA's debt would certainly increase the costs and could possibly derail the plan completely."

As Deadspin noted this week, this is disingenuous nonsense. The city's attorneys are essentially arguing that not giving millions of dollars to the Pistons' billionaire owner would jeopardize Detroit's entire economic recovery.

A federal judge dismissed the lawsuit.

The next time you see a headline about how woefully underfunded Detroit's schools are or hear about appeals for additional state and federal funding, think about how its city leaders prioritize a finite amount of tax revenue. Detroit's rickety fiscal situation is the result of decades of poor choices, from which it appears the current leadership has learned nothing.

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47 responses to “Detroit Council Dunks on Taxpayers, Will Use School Funds for Basketball Arena

  1. “As well they should be. In a city still recovering from bankruptcy, local officials might have found better ways to use $34 million.”

    Sticking in in strippers g-strings would be a better use. So would using it to light cigars. The disgrace of spending public funds to build sports arenas goes back at least to the Romans. You’d think there would be some way to get our “Public Servant” parasites over it.

    And that federal judge deserves to be flogged.

    1. This is the kind of thing that really pisses me off.

      Here in Columbus, they had three different ballot issues to pay for an arena for a potential NHL team- all lost. So, John McConnell (Worthington Steel) put up his own money, and we got a (shitty) hockey team.

      10 yrs later, we had the casino initiative where the money was going to “help the schools and children”. The first thing a 6-1 Dem controlled City Council did was give the Blue Jackoffs $40 million of the expected tax revenue.

      1. And we own the arena now!

      2. One correction – Blue Jackets had one of the best records of the regular season this year and a back to back Vezina winner. With a better playoff format they would probably have gone to the second round. So not all that shitty.

    2. Part of the judge’s reasoning is that it’s a state problem which doesn’t belong in federal court yet.

    3. The disgrace of spending public funds to build sports arenas goes back at least to the Romans.

      Hence “Little Caesars,” right? At least the name totally fits.

      1. +1 topping of your choice

    4. Do you know how labor-intensive “sticking it in strippers’ g-strings” would be?? This kind of thong-ready make work project has been shown to fail in the past!! Government should not be in the business of picking which strip bar matressbacks should have their g-strings stuffed with federal largesse. So to speak.

      1. Ask Jerry Springer- he wrote a check… :o)

  2. Remember to always vote democrat. It’s for the children.

    1. Only if the vote is for who to send to the guillotine.

  3. Don’t worry, the teachers’ extortion council will be back next year whining that they don’t have enough money for the schools and this time, they really will use it for the schools. Promise!!!!
    CA does this on a regular basis; that lying POS moonbeam is forever ‘balancing the budget’ by stealing from one dedicated fund or the other and then finding that we must raise taxes, since that fund is now low.

    1. Michigan has a Republican governor along with Republican majorities in both houses of the state legislature. School operating monies come from the state on a per-student basis — it’s not legal for local districts to raise property taxes for operating expenses (including, obviously, teacher salaries). So it’s really not like California.

  4. Detroit and the civilized world have differing definitions of the word “remarkable”. For those who haven’t been there, we are talking about a couple of condo developments and two blocks of Greektown surrounded by abject blight. If you face away from the stadiums you look down a path of vacant burned out buildings.

    Detroit: Land of the tightly cropped photos.

    1. I gotta reply since I’m from the Detroit area (been gone for 40 years) and find my way home on occasion. It is true that large portions of mostly old downtown Detroit are uninhabited and uninhabitable. But there are plenty of areas outside of downtown that are thriving with commerce and development. Property values in southeast MI are rising faster than they are here in IL because despite the bankruptcy of Detroit proper, the area is actually doing quite well. Detroit is not a ghost town, it’s just a lot smaller than it was.

      OT: It would be pretty hilarious if TDS actually brought down the evil partiers by pure dumb luck.
      http://www.washingtontimes.com…..edium=push

      1. Property values in southeast MI are rising

        Do those property taxes go to Detroit Proper? (DP; upto the reader whether they prefer that to mean Donkey Punch or Double Penetration.)

    2. I love when you guys who haven’t been downtown in a decade act like authorities online. You’re very clearly describing how things were around 2000. Have you just missed on Gilbert basically buying and refurbing everything?

      It’s still pretty easy to go with the stupid and inaccurate “well, it’s just downtown and midtown” angle, but you didn’t even do that. Greektown is one of downtown’s worst blocks now. You might want to update your BS.

      Also, this blog post was dumb and stuck to rote generalities instead of diving into the actual tax issues and laws, let alone the whole issue of whether throwing money at failing charter schools is actually better spending than trying to improve the downtown tax base.

      1. Massey|6.25.17 @ 7:48PM|#
        “Also, this blog post was dumb and stuck to rote generalities instead of diving into the actual tax issues and laws, let alone the whole issue of whether throwing money at failing charter schools is actually better spending than trying to improve the downtown tax base.”

        I have no idea whether your opinions of Detroit RE are correct or not, but the stupid and lefty bullshit is so strong in this paragraph, I have strong doubts.
        Put another way, fuck off, slaver.

        1. His opinions about downtown and midtown are right on. It’s cleaned up, vibrant and safe to walk around in. The tax issues are indeed complicated but using school money to pay Dan Gilbert is definitely stupid.

  5. Funny, isn’t it, that judges will throw out these kinds of lawsuits that defraud the taxpayers in favor of rich business owners, but environmental groups get their day in court – often for years – or legislation sponsored by evil Republicans or presidents with an R after their name – always find a judge willing to let the lawsuits continue.

    1. Actually Mr Boehm has it wrong. The judge didn’t dismiss the lawsuit, he simply refused to grant an emergency injunction to stop the deal immediately. There will still be a trial, and it will be interesting to see how this goes.

      The arena is practically finished (first events are scheduled for September) and it would admittedly be nice to have the Pistons downtown instead of in Pontiac (where I’ve never been to see them), but the activists are right that this shouldn’t be happening. Doubt that the plaintiffs will get anywhere though–the leader is a local crank who never wins any of his lawsuits.

      Still, can’t deny it’s nice to be able to walk safely from my office at Wayne State to the riverfront any time of the day or night (that area is now safer than Ann Arbor or East Lansing, and many other university towns), and part of it is this development.

      1. Shall it remain nice forever and ever, Amen. At least until the smoldering ring of abandoburbia suffocates everyone.

      2. Somebody should have “found” an endangered St.Clair River three striped toad frog at the site and the whole shebang would have come to a crashing halt for four or ten years.

  6. Wow, this is a new low, even by my cynical standards.

  7. Yeah, but when the Pistons win the NBA finals in like…. never… think of all that civic pride Detroiters are going to feel. You can put a price tag on that.

    1. can’t

      1. More accurate the first way I think.

        1. Yessir! $34 million to be precise.

  8. In a city still recovering from bankruptcy, local officials might have found better ways to use $34 million.

    And monkeys might fly out my butt. The residents of Detroit are poor, they can’t afford government. It’s some sort of cargo cult mentality to note that the most prosperous places in the world have a high level of government services and get the cause and effect backward.

  9. How is this even allowable according to their bankruptcy terms? Is servicing debt not part of the deal?

    Sorry, stupid me, FYTW. Even when it was the bears, I should have known it was FYTW.

    1. The city exited bankruptcy several years ago, and isn’t subject to that kind of restriction any more.

      1. my misunderstanding of “recovering from” then, oh well, they’ll be bankrupt again soon enough.

  10. Kinda sorta OT except in terms of the death penalty for fraud, China’s cracking down on bullshit science. As an aside, the authors of this piece write at Retraction Watch which is a pretty damn good site.

  11. Now, this money was going to go to Detroit schools?

    1. Their creditors really, but not really as it turns out, so no.

    2. lol.

      The money, insofar as it ever slowed down in its journey from the taxpayers to “the children”*, was always going to be stolen by the fastest-acting cozeners with access to the government. And so it came to pass. The parks were never gonna get shit. As Country Joe once said, “How many divisions has the Parks Department?”

      *-actually, dues-paying members of the teachers union. Who, for those millions, would only have produced pay raises on the theory that this would enable them to better help the children. So…kind of a lose/lose

  12. Number 7|6.25.17 @ 3:59PM|#
    “Yeah, but when the Pistons win the NBA finals in like…. never… think of all that civic pride Detroiters are going to feel. You can[‘t] put a price tag on that.”

    It was with a great deal of surprise that I was able to link an article some time back which mentioned that the GS Warriors *BOUGHT THEIR OWN LAND AND ARE PAYING FOR THEIR OWN STADIUM WITHOUT ANY TAXPAYER MONEY AT ALL*, which is disputed by NIMBYs claiming they need additional transit, so there! Which slavers obviously assume transit ought to be “free” to those using it.
    Anyhow, the GS W had a parade in Oaktown, where they still reside, celebrating their championship, and lo-and-behold, *THEY PAID $4m TO COVER THE ENTIRE COST OF SECURITY AND CLEANUP!*
    I happen to live in SF, so they are “my” team I’m told and I should be proud of that. Problem is, I didn’t have a damn thing to do with it; I’m just pointing out that some teams (hint, hint) PAY THEIR OWN DAMN WAY!

    1. I”m in the Bay Area too, so go Warriors, cuz the Giants and 49res suck.

  13. The empress dowager is in charge of things, and her realm is the worse off for it.

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  15. RE: Detroit Council Dunks on Taxpayers, Will Use School Funds for Basketball Arena
    This is why Detroit can’t have nice things.

    So what?
    Its not Detroit’s money.
    Its the taxpayers’ money.
    The taxpayers have so much, and Detroit has so little.
    Its the humane thing to do to waste the taxpayers’ money.
    Ask any progressive.

  16. Poor choices have negative consequences. Poor leadership makes poor choices. Ignorant people continue to elect poor leadership. The negative consequences in this situation are an educational system that produces ignorant people.

  17. As always, the libs always bust the bank with draconian abuses especially when they get more than $2 in the bank, they think all is well. They are acting like our idiot gov moonbeam and his best friend obozo both who have never since libs bent the rules to favor their diseased freebie feel good mentality. By the way, you will be able to add California to the Illinois list shortly as moonbeam has not clue on proper governance and he is no better than his dad who 60 years ago created the Oroville disaster by cutting corners to get the project done before he left office. In closing, the problem is simple – libs love to pass legislation without an ounce of competent vetting that automatically results in “unintended consequences disaster.”

  18. Yeah, but at least they have 4 sports teams

  19. This is just plain wrong and just another example of so called Progressive politics in these cities of failure. Funny how they have no problem lying to the taxpayers to get what they want. I think I know who the real deplorables are.

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