"The decision means Motown will soon have a new boss in charge of restructuring Detroit's dire financial mess, likely to include drastic cuts in public services and a top-down rethinking of the type of government a shrunken city with a dwindling tax base can afford.
According to the AP, Detroit is facing a $327 million budget deficit and "more than $14 billion in long-term debt.""'I look at today as a day as a sad day, a day I wish had never happened in the history of Detroit, but also a day of optimism and promise,' Snyder said."
How could this be? Last decade, Detroit's government invested heavily in downtown sports stadiums to spur economic development. In 2000, Comerica Park opened for Major League Baseball's Detroit Tigers. In 2002, Ford Field opened for the National Football League's Detroit Lions.
But even though Detroit was drowning in debt, City political and business leaders plowed ahead with the downtown professional sports investment strategy. Just this past December, it was reported that the owner of the Detroit Red Wings was looking to building a new $650-million entertainment district for the team in downtown Detroit with the help of state and local taxpayers:
A spokeswoman for the Ilitch family's Olympia Development said the proposal begins a process "to explore the viability" of such a district. But a news release quoted George Jackson Jr., the city's top development official and president and of the Detroit Economic Growth Corp., as saying the plan "makes good business sense."
"It's not a plan for an isolated, single-use structure," Jackson said in the release. "Instead, it builds on the clear successes we've already had downtown integrating districts that feature entertainment and support commercial, retail and residential development around them."
There were no estimates yet of the number of residential units, retail shops or office space square footage.
A "significant private investment" -- presumably from the Ilitches -- would help pay for it. But the project also would need public support in the form of tax dollars currently collected by the city's quasi-public Downtown Development Authority. Parts of the plan need approval by the state Legislature.As part of its economic development strategy, Detroit invested heavily in downtown sports stadiums to try to drive economic development. The City was promised lofty returns on its money. It didn't happen. Detroit's fiscal woes only grew worse. The return on the investment in professional sports never paid off.
Paying for the project would not require any new taxes, Jackson said. But a state Senate Fiscal Agency analysis said the financing arrangement, if approved, "would reduce both state School Aid Fund revenue and local tax revenue by an unknown amount."
Yes, Indianapolis is more sound financially than Detroit. But that doesn't make the professional sports strategy here any more sound here than it is in the Motor City. It just means that taxpayers in Indianapolis can suffer the inevitable losses from such a poor strategy for a longer period of time than taxpayers in Detroit. But the day will come when the State of Indiana is forced to take action to save the City of Indianapolis from public and private leadership that seems not to care much about what is in the best interests of taxpayers.
Detroit's present is Indianapolis' future. Mark my words.