Despite bankruptcy, crony capitalism alive and well with Detroit’s new Red Wings arena

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Cities do stupid things for their sports franchises. They often leverage themselves out and pour money into the pockets of team owners. City leaders don’t want to be the ones who chased off a beloved team. The Red Wings are such a beloved team. (In Michigan hockey is a top tier sport.) That is why even as Detroit is negotiating with creditors in bankruptcy the city is promising to build a new stadium for the team (owner) with tax money, some of which was originally designated for schools.

(From The Washington Examiner)

Even worse, Ilitch, who is notorious for driving a hard bargain, insisted on leasing — instead of owning — the facility because, Crain’s Detroit Business reports, that would save him $1 million annually in property taxes.

And, since this lease will be renewable every few years, should the Red Wings’ place in the standings drop and ticket sales plummet, Ilitch could walk away from the arena without liability. Taxpayers, however, will have no such luck.

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