Tags: Detroit | arena | municipal | debt

Detroit Authority Approves $450 Million Muni Bond Deal for Arena

Tuesday, 16 Sep 2014 03:02 PM

A $450 million bond sale to finance a Detroit hockey arena neared final approval with consent of the city taxing authority that will help pay for it.

The Detroit Downtown Development Authority approved terms that may be considered tomorrow by the Michigan Strategic Fund, which would issue the bonds.

The 18,000-seat arena is the anchor for a 250-acre (101- hectare) redevelopment to be financed by Olympia Development, part of Ilitch Holdings Inc., owner of the National Hockey League’s Detroit Red Wings. The new venue will replace Joe Louis Arena, where the Red Wings have won four Stanley Cup championships since it opened in 1979.

The Ilitch organization, led by billionaire Mike Ilitch, would pay 44 percent of the cost of the arena. The Downtown Development Authority would pay the remainder using a portion of taxes collected in its district.

Ilitch has pledged to spend at least $200 million on the surrounding redevelopment to include housing and retail outlets.

The bond sale would be the largest by the Michigan Strategic Fund. The issuance has been delayed for months as the state explored ways to maximize tax-exempt securities with lower interest rates.

Of the securities, $250 million backed by public money will be tax-exempt, according to a report to the authority board. Olympia Development will pay $11.5 million a year toward the 30- year bonds. The developer also pledged to pay for infrastructure around the arena.

Olympia Development may be reimbursed as much as $75 million after it spends $200 million on the redevelopment.

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
Economy
A $450 million bond sale to finance a Detroit hockey arena neared final approval with consent of the city taxing authority that will help pay for it.
Detroit, arena, municipal, debt
252
2014-02-16
Tuesday, 16 Sep 2014 03:02 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved