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HBO Real Sports Segment on The District Detroit...

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..........and the promises not kept.   

 

I don't think the Ilitch family is going to come out of this looking too good.

 

Hey, they got their arena.......screw you.  

 

I dropped HBO 2 months ago,  let me know about the segment.  

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The Ilitch properties stand out like a sore thumb now...

 

 

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It was a brutal report.  Accuses the Ilitch family of a premeditated, decade long plan to destroy and depreciate the area so that they could later use public empathy and more importantly public funds to rebuild and dramatically raise the value on their investment.  

It also points out that part of the lobbying around getting funding for The District was the arena was just a small part and that it would also be the largest residential housing development project in Detroit.   

As of today, they have developed exactly zero houses, lofts, apartments, or condos in the District and none are pending on the horizon.

If the deal on its own wasn’t a bad enough investigative TV story, the report spent a bunch of time paralleling the plight of the Detroit schools, where the $300M money was taken from, including teacher interviews and many shots of decaying schools with black mold and water damage.  Not a good look. 

 

23 hours ago, Mr.TaterSalad said:

Why redevelop properties when you can charge $45 a car to park. Just keep building parking lots.

This was covered and it turns out Ilitch got an extra $74M if they were to develop a portion of property around the arena.   They built 24 parking lots and the new Little Caesar’s HQ and will get their $74M and don’t have to share a penny of the proceeds with the city or state.   

 

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bottom line is it probably won't be housing in that area in the end anyway. The Brush park residential development has so exceeded expectations and office occupancies in the city are high enough that most of what ever gets built around LCA is now likely to be office/commercial.

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They also do not have to adhere to standards where you need to have decorative islands in lots of a certain size for aesthetics and also, I think to help with water runoff.

Where I park at, near Grand River/Cass/Bagley it's very clear which properties belong to Ilitch and which do not.  Many of those buildings look just as they did 10 years ago.   Any development I see is not from them.

They got their arena and their stupid "District Detroit" moniker.  They even mentioned it in the Yzerman Presser on Friday.... their PR lackey was probably instructed to say it when he introduced everyone.

They've been living off the Fox Theater for 30 years.  That's all they've done.

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1 minute ago, Oblong said:

They also do not have to adhere to standards where you need to have decorative islands in lots of a certain size for aesthetics and also, I think to help with water runoff.

Where I park at, near Grand River/Cass/Bagley it's very clear which properties belong to Ilitch and which do not.  Many of those buildings look just as they did 10 years ago.   Any development I see is not from them.

They got their arena and their stupid "District Detroit" moniker.  They even mentioned it in the Yzerman Presser on Friday.... their PR lackey was probably instructed to say it when he introduced everyone.

They've been living off the Fox Theater for 30 years.  That's all they've done.

TBF - to 40 million to WSU was not nothing.

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1 hour ago, Hongbit said:

It was a brutal report.  Accuses the Ilitch family of a premeditated, decade long plan to destroy and depreciate the area so that they could later use public empathy and more importantly public funds to rebuild and dramatically raise the value on their investment.  

It also points out that part of the lobbying around getting funding for The District was the arena was just a small part and that it would also be the largest residential housing development project in Detroit.   

As of today, they have developed exactly zero houses, lofts, apartments, or condos in the District and none are pending on the horizon.

If the deal on its own wasn’t a bad enough investigative TV story, the report spent a bunch of time paralleling the plight of the Detroit schools, where the $300M money was taken from, including teacher interviews and many shots of decaying schools with black mold and water damage.  Not a good look. 

 

This was covered and it turns out Ilitch got an extra $74M if they were to develop a portion of property around the arena.   They built 24 parking lots and the new Little Caesar’s HQ and will get their $74M and don’t have to share a penny of the proceeds with the city or state.   

 

They are really nice parking lots tho. At least they look nice. I prefer to just park on Cass for free. 

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I went to a concert back in February at the fillmore.  Saw one of their $10 lots where you pay with your CC.  I got the last spot.  Then I saw others coming in after me....  it does't keep track?  I don't know what they did.

 

 

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I struggle with how to view this whole thing. On the one hand, it’s definitely a bad look for a business enterprise that is already swimming in cash to ask for funding or write offs from a city or county or whatever during development. On the other hand, this type of thing is standard practice for cities with regard to many different businesses and development projects. It’s not just sports stadiums (yeah, I said stadiums and not stadia, G2).

The ilitches are running a business. They aren’t going to just use their own cash when they can get incentives.

And I do think that the presence of “district Detroit” has some positive trickle down effects. The cass corridor has developed. Midtown in general has developed. So even if the ilitches haven’t yet developed any residential properties, plenty of other developers have. 

I don’t know if that justifies all the public funds or not. It probably doesn’t. But I do know that I enjoy visiting that area more than I used to. And further, I don’t think there is anything wrong with certain areas effectively being theme parks for suburbanites to “go to the city.” That’s not a practice unique to Detroit. Every major city caters to people like that. The fact that Detroit can offer that now is progress. 

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Nearly seven years later, aside from the brand new arena, the Little Caesars headquarters down the street, and a handful of other projects, there has not been much progress made on the District Detroit, and people are starting to ask questions.

That is actually a lot for 7 years.  I think people underestimate how long these things take.  I have no idea if Illitch Corp said it would be thriving in 5 years or something so I am not commenting on that, but 7 years and you have a huge new stadium a new business with LCA HQ and "a handful of other projects"..that is nothing to sneeze at.

It is not only going to be them.  They are not 'saviors'.  They do what they can with what they have and create other opportunities for other people/business.  I hate this mentality that if someone is wealthy and what they are working on does not IMMEDIATELY impact an area that it is somehow deemed to be a failure...and it is mainly considered that because the corp/people involved are still 'uber rich'.

Would it help if the Illitchs went bankrupt trying to do all these things, they failed and they are ruined along with the city?  Or would people still beat a dead horse to try and 'even' it out.

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All of these points make sense.   However, If you watch the piece, this isn’t just a normal business deal or real estate transaction.  The Ilitch family has secretly bought property throughout the area for years and have done nothing and purposely let sit vacant and create blight.  

The allegation is they had a decades long scheme to actually create blight to in turn devalue the property in the short term.   This allowed them to get massive public assistance with no part of the expected revenue to be shared or paid back.   They get to keep it all and let the city hope this trickles down to its residents.  

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the other undeniable fact is that Mike Ilitch has left the scene. I think it's pretty clear already that Chris is a more conservative operator than his father was - possibly he has to be more circumspect because he may not hold the same kind of sway over his mother and siblings his father did. They may fail the comparison when held up to what Gilbert is doing, but the Ilitches still pay a ton of salaries in the city and are doing as much to bring suburban spending dollars into the city as anyone else, and in the end that is what will make redevelopment more inevitable than whatever plans for the district come up short.

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9 minutes ago, Hongbit said:

All of these points make sense.   However, If you watch the piece, this isn’t just a normal business deal or real estate transaction.  The Ilitch family has secretly bought property throughout the area for years and have done nothing and purposely let sit vacant and create blight.  

The allegation is they had a decades long scheme to actually create blight to in turn devalue the property in the short term.   This allowed them to get massive public assistance with no part of the expected revenue to be shared or paid back.   They get to keep it all and let the city hope this trickles down to its residents.  

I think this is both an 'in the eye of the beholder' and "post hoc ergo protper hoc argument. All developers attempt to buy depressed property cheap and hold it till conditions improve. The idea that given the conditions and mismanagement in Det in the years prior to the bankruptcy clean-up and the Duggan admin taking over that anyone needed to have a plan to 'create blight' is almost laughable.

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All I would add is any plan that involves buying property with the thought that you devalue it further enough to make it valuable enough to a municipality in 20+ years to justify incentivizing a bunch of then unplanned, let alone unapproved, projects seems super risky.

I think the more likely explanation is they bought the property cheap and held it on the off chance that it would become valuable enough later to merit developing.  They fact it fell the way it did was purely gravy.

They may have considered that potential outcome as the best case scenario for them, but I doubt they expected or banked on it.  I'd expect they would act to achieve that end because it is in their best interest to do so.

That would be my guess, at least.

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10 minutes ago, Hongbit said:

All of these points make sense.   However, If you watch the piece, this isn’t just a normal business deal or real estate transaction.  The Ilitch family has secretly bought property throughout the area for years and have done nothing and purposely let sit vacant and create blight.  

The allegation is they had a decades long scheme to actually create blight to in turn devalue the property in the short term.   This allowed them to get massive public assistance with no part of the expected revenue to be shared or paid back.   They get to keep it all and let the city hope this trickles down to its residents.  

I don’t think it was any secret that ilitch was buying up all of those lots. I don’t think it was creating blight so to speak. I think the blight was already there. And it’s hard to fault them for not improving on the lots when the whole point was to develop them later. 

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I seem to recall at one point the hot rumor was that the new red wings arena was going to go in behind the fox, as evidenced by ilitch buying up all that property. Who knows if that was the initial plan and they realized they were better off just using that space to sell parking for the tigers games. Maybe things changed when ford field went in. 

This was a long time ago so I don’t remember exactly when it was and I may be very wrong about it. 

I have not watched the hbo piece. 

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Did anyone else watch the HBO Real Sports segment that I’m taking about?  

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Shawn Platt, Vice President of of Corporate Communications for Ilitch Holdings, released this statement:

Our organization has six decades of dedication, commitment and positive impact throughout the broader Detroit community. We are exceptionally proud of our accomplishments, including the creation of thousands of jobs, the restoration of various historic buildings, and the development of a downtown sports and entertainment district which has surged since the opening of Little Caesars Arena. It is unfortunate when a media outlet emphasizes the voices of the critical few and not the voices of many who would present the positive story that is taking place across our City.  The result was a self-interested, sensationalized and inaccurate report designed to attract viewers instead of a balanced report on the rebirth of Detroit and our contributions to City’s turn around.  

Public funds for the arena came from specific tax dollars allocated to fund a catalyst development project that would drive economic growth in the City of Detroit.  Our commitment to the City was to develop a $450 million arena, and, within 5 years, deliver $200 million in additional development directly or by others.  The reality is that we exceeded our commitment and also know that this catalyzed numerous other development project in and around the arena, including a variety of residential.  We invested over $863 million in a state-of-the art, award winning arena and are on track to have over $200 million in private development completed this year, roughly 5 years ahead of schedule.  

We remain undeterred in our commitment to the City and its bright future.  We will continue to invest in successful projects that will drive job creation, economic growth, and enhance, for years to come, the quality of life for Detroiters.

 

Illitch response.

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How much of that $200 million includes parking lots and garages? It is interesting that they don't break that number down at all in their response.

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11 minutes ago, Mr.TaterSalad said:

How much of that $200 million includes parking lots and garages? It is interesting that they don't break that number down at all in their response.

You’re expecting a detailed accounting in a PR press release response?

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Interesting.  Ilitch Holdings is saying the money came from a specific fund that was set aside for exactly this kind of economic development.    The HBO story spent a good deal of time talking about how this money was supposed to be used for future school infrastructure funding.   Not sure who is right but that point had very large impact on the narrative of the story that was told by Real Sports

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3 minutes ago, Shelton said:

You’re expecting a detailed accounting in a PR press release response?

Considering they are getting ripped for their District Detroit development being largely parking lots, they could indeed allude to what some of their actual development is.

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