Dive Brief:
- Owner upgrades have driven the cost of the new, 20,000-seat Detroit Red Wings hockey arena to $627 million — $177 million more than the original estimate, according to the Detroit News.
- Although $250 million in taxpayer bonds are footing half of the original cost estimate, the owner, Olympia Entertainment, said it will pay for all of the additional costs with private funding.
- Adding to the cost of what the Detroit News called the "state-of-the-art" NHL venue is a large LED screen, a practice/amateur game rink, additional video and sound capabilities, gondola seating in suite areas, a "skin" on the outside of the arena to display video and graphics, and other food, security, elevator and locker room features.
Dive Insight:
Olympia is a division of Ilitch Holdings Inc., headed by Mike Ilitch, co-founder of Little Caesars Pizza and owner of the Red Wings. The Ilitch organizations and the Red Wings have drawn criticism over financing of the arena, as the city had initially earmarked the downtown property taxes used to fund a portion of the project for Detroit Public schools, according to the Detroit News reported.
President and CEO of Olympia Tom Wilson told the Detroit News that the project could see even greater costs as the owners continue to create a state-of-the-art venue.
"We’re completely focused on delivering an arena that hosts exceptional experiences for our community, players, fans and neighbors while driving additional investment and development in Detroit," he said.
The hockey arena was in the spotlight earlier this year after it was revealed that the project’s development agreement stipulated that at least 51% of the 5,500 construction workers must be "bona-fide Detroit residents" and 30% of the total value of construction contracts must be awarded to businesses in the city.
The owners expect the arena to open in 2017, and city officials hope it will spur economic development throughout downtown Detroit.
