Detroit Red Wings deal a cautionary tale

The sports publication deadspin.com this week excerpted a story on the Detroit Red Wings scam from Next City, a magazine for urban leaders. The story unearths some new, horripilating facts.

A week after Detroit declared bankruptcy, it was announced that taxpayers would pay 58 percent of the cost of a new Red Wings hockey arena for the Ilitch family, which is worth $3.2 billion.

Tax-increment financing will contribute at least $12.8 million a year to the project; If that money weren't going to the arena, it would go to Michigan's School Aid Fund. The $261.5 million taxpayer subsidy comes at a time firefighters and police could see pensions reduced by as much as one-third.

Last month, the Detroit City Council voted to sell the Ilitch company and the Downtown Development Authority (who will share ownership of the arena) 39 vacant parcels for $1. The Ilitch operation (which owns a downtown gambling casino and the also-subsidized Detroit Tigers baseball team) called the $1 payment a "once-in-a-generation" deal. Yes, for the Ilitch family.

After council approved the $1 transfer, a Detroiter shouted, "The citizens of Detroit thank you for selling them out!"

Oh, yes. In 1992, as controversy swirled over the Tigers subsidy, a ballot initiiative banned the use of public subsidies for stadiums. Three years later, the council passed an ordinance that repealed it.