Why Is Detroit’s City Council Giving Away Free Money To Billionaires?

Not to worry, though—the Detroit city council made owner Tom Gores’s life easier today, approving a brownfield tax incentive to the tune of nearly $20 million for the Pistons’ new $83 million practice facility. And that’s separate from the millions of dollars of public money being poured into the arena itself. The vote was a foregone conclusion, with only two council members voting no, continuing in the storied American tradition of municipalities and cowardly lawmakers rubber-stamping stadium deals that give away huge sums of money to incredibly wealthy owners.

Since the new arena was announced in 2013—initially just as a home for the Red Wings—the cost has ballooned from $450 million ($285 million publicly funded) to $862 million. Funding is projected to be 62% private and 38% public, though that could change again—there are always, of course, cost overruns. Further, according to the Detroit Free Press, the Downtown Detroit Development Authority (DDA), the public entity that technically owns the arena, is “expected to capture $726 million in school property tax revenue through 2051.”

Champions of tax increment financing (TIF) and stadium scams will tell you that this money isn’t coming from the general fund, that the taxes will be captured within the arena district to fund the project and its ancillary development. This makes it, they say, a win for residents and business owners alike. An arcane financing mechanism will help lift the city from the ashes!

But that’s all bullshit. Yes, the Detroit Public Schools Community District (DPS) receives full funding from the state. But DPS cannot collect taxes in the arena district until the 30-year bonds—issued to help finance an arena for a man worth $3.3 billion and a family worth $6.6 billion—are paid off. We’re living in strange times, but I would like someone to please explain to me how it is remotely sensible for a city that filed for bankruptcy four years ago, and where the public schools have been overseen by a string of emergency financial managers, to foot the bill for a sports arena, especially considering the owners’ outright refusal to agree to a strict community-benefits agreement that would ensure a set percentage of permanent, non-construction jobs go to Detroiters.

When Raquel Castañeda-López, one of the two councilmembers who voted no today, asked Palace Sports & Entertainment (PS&E), the Pistons’ parent company, if they would allocate 50% of their internships to Detroiters, they responded in a memorandum, “PS&E is committed to providing opportunities for Detroit residents and, to that end, will engage with the City and DEGC [Detroit Economic Growth Corporation], as well as, private sector and non-governmental entities to publicize relevant job openings.”

Castañeda-López, who championed a failed ballot proposal for stricter community-benefits agreements back in 2015, is not opposed to the Pistons move. She welcomes it. She is just trying to get the best outcome for her constituents.

“If we’re going to have this much public financing we’re going to need to have more concrete outcomes for city residents: Jobs for Detroiters, schools, libraries, filling immediate needs,” she told Deadspin, while she was stuck in traffic en route to City Council this morning. “I want to see concrete percentages. I like solid commitments that you can measure as opposed to them saying We’re committed to hiring Detroiters.”

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