New Home for the Wings?
The $64, 000 question in the D’ lately seems to be whether or not Mike Ilitch will replace Joe Louis Arena with a new, modern facility or remodel? With the lease at the Joe up in 09′ Ilitch must make a choice soon. Speculation was high last week when Olympia Development announced that they will raze the building at 138 W. Columbia. The consenses is that any new arena will be in Fox Town.
My opinion is that it’s already too late to build new in time for the lease to run out. Although that problem can easily be solved with an extention, it seems to me that he should have started last year. Ilitches do not own every parking lot or building in the area bordered by Cass and Woodward, Montcalm and W.Adams. The law has changed on eminent domian so he must negotiate selling prices with other owners. I have spoken to a few and they all agree, they won’t go easily. So you can see that, just the problem of optaining the neccessary land to build the arena, not to mention the parking structure, is daunting and could drag on for months.
It is estimated that to renovate the Joe’ would cost around $200 million. That’s alot less than the $250 million for a new home for the Wings plus another $100 – $150 million for a parking structure. Ilitch bought the Wings in 82′, Tigers in 92′ and Marian purchased the Motor City Casino in 2005 so they certainly can support the financing either way. He is known as a very schrewd businessman and I am betting he will stay with the venue he has. As a disclaimer, I have to admit, I am a lousy gambler so don’t beat me up too bad if it goes the other way, k?
You’ve concluded that because the Ilitch’s were able to put together the funds to acquire Teams/Casinos that they somehow paid cash and further imply that either way they’ve got the cash for a new or renivated Joe.
Like most people, the Ilitch’s use credit and financing, highly leveraged. The Tigers have the third worst debt to value ratios in MLB and one winning season hasn’t changed that.
And the debt to value ratios have risen higher than analysts expected for MotorCity Casino (they financed $1.1 billion to fund and finance $525 million acquisition) which is why this past year both Moody’s and Standard & Poor’s were forced to downgrade the Ilitch credit ratings for MotorCity to levels well below investment grade. They’ve now got junk bond status on several of their credit lines.
Hell, he had to get taxpayers to finance the demolition of the building at 138 W. Columbia. And you can bet there are more taxpayers subsidies to come no matter which direction he takes for JOE.
I don’t think the building coming down is for the new stadium. Look for another Olympia parking lot on the site.
I really hope he does stay put.