Ed McNeil: How Can a Bankrupt Detroit Give Away Millions to Illitch Organization?

March 31, 2014, 10:25 AM

Ed McNeil is Special Assistant to the President of Michigan AFSCME Council 25

Ed McNeil

By Ed McNeil 

Today the  the entire region will celebrate the Detroit Tigers Opening Day. And the biggest party of all is happening at Detroit City Council where members are scheduled to vote to donate as much as $75 million to the Illitch organization – the owners of our beloved baseball team. 

That’s quite a gift. It comes in the form of forgiving at least $50 million in money owed to the City of Detroit by the Red Wings for past cable TV revenues. Some reports estimate the amount owed to Detroit taxpayers is as high as $80 million as noted in the Detroit News  on March 27: Report: Detroit gets $5.2M, not $50M, in arena lease due to terms.  (Update: The Council voted this morning 5-4 to approve the deal.)

Oh by the way, the City of Detroit is in bankruptcy. We hear the news everyday about trimming benefits for hourly employees and fixed-income retirees. Sadly, we never hear of efforts by the city to remind the corporate community of this reality in an effort to attain more favorable deals.

Instead, our city bends over backwards to give away the store as if it is flush with money.

The deal with Olympia entertainment is the case in point. The naming rights alone would net millions of dollars in revenue for the City. But that’s not going to happen. Instead the city will get 100 pennies – that’s right, one dollar -- for more than 30 parcels of land it sold to build the new hockey arena. Meanwhile private property owners pocket $50 million for their property.

To add insult to injury, the property will no longer be taxed. Olympia should be taxed for the property according to state law. MCL sec. 211.181(1) says that any lease of public land is obligated to pay taxes. But Olympia won’t. They will join Ford Field and Comerica Park in the exclusive tax free club of billion dollar businesses.

That is simply not fair to the thousands of homeowner and businesses who are taxed.

Everyone applauds corporations coming downtown. Everyone loves new jobs brought to the City.

But these giveaways are too costly to continue. Detroit City Council needs to vote no on the latest scheme to giveaway more tax dollars to billionaires. If they don’t maybe the federal bankruptcy court should. After all, $50 to $80 million will go a long way to helping retirees and pay the bills.


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