Michigan approves funds for Joe Louis Arena demolition

The Michigan Strategic Fund voted Tuesday to approve $6 million in demolition funds to raze Joe Louis Arena once the Detroit Red Wings move into a new arena on the north end of downtown.

Under terms of the agreement for the demolition funds, the new arena must be built before the demolition money would be freed up for use. The demolition funds would eventually be repaid to the Strategic Fund through new tax revenues captured by the city in the downtown district.

The exact cost of the demolition is not yet known. The $6-million estimate approved Tuesday could go as high as $10 million, although MSF staff said the cost is expected to be closer to the $6 million or even less than that.

After the MSF meeting at Next Energy in Detroit, Michael Finney, president and CEO of the Michigan Economic Development Corp. and chairman of the strategic fund board, said that the state funding for demolition is worth it because the new arena and related entertainment district around it will produce huge new investment in the city.

We do expect that this project will serve as a catalyst, he said of the arena project. And noting the Ilitch family, owner of the Red Wings, has pledged to invest $200 million in spin-off developments near the new arena, Finney added, The project only works if the private development happens, so we think it will be a catalyst, and the way that the deal is structured really helps to ensure that that development happens.

During the public comment portion of the meeting, John Lauve of Holly criticized the MSF fund for not making more information about the project public before voting on it.

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Michigan approves funds for Joe Louis Arena demolition