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updated: 7/24/2013 3:33 PM

Public money will help fund Red Wings' arena in broke Detroit

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Associated Press

LANSING, Mich. -- A state board on Wednesday unanimously gave the go-ahead for a new Red Wings hockey arena in downtown Detroit to be paid for in part with tax dollars as the broke city works through bankruptcy proceedings.

Gov. Rick Snyder and others defended against potential criticism that the $650 million project should be entirely financed with private money because the city can't provide basic services and its retirees are facing cuts in their pensions. The arena is designed to be a catalyst for more development and to link downtown with underutilized nearby areas, officials said.

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"This is part of investing in Detroit's future," Snyder said. "That's the message we need to get across. ... As we stabilize the city government's finances, as we address those issues and improve services, Detroit moves from a place where people might have had a negative impression -- although there are great things already going on -- to being a place that will be recognized across the world as a place of great value and a place to invest."

The Michigan Strategic Fund Board approved the Detroit Downtown Development Authority's request to use economic development taxes for the project. The board also took a preliminary step toward issuing $450 million in bonds to build the arena.

Fifty-six percent of the overall project cost is private and 44 percent public. No new taxes or funds from the cash-strapped city are needed, though some Democrats last year criticized legislation clearing the way for the project as stealing from public schools.

Construction of the arena is anticipated to be done by 2017. It also is expected to host other events.

Representatives for Olympia Development of Michigan, which is owned by Red Wings owner Mike Ilitch and his wife, said the new arena will have 400 more permanent jobs and 5,500 construction jobs.

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