Arenas as catalysts for economic development:

Connecting Midtown and downtown via district

Detroit

CHRIS MILLER

PA 641

Detroit began its sports-related facelift in 2000 with the opening of Comerica Park, which

was followed by the opening of Ford Field in 2002 – fast forward 13 years later, and ground has

been broke on the new, yet unnamed Detroit Red Wings stadium, but with a much bigger impact.

While Comerica Park and Ford Field are right within Downtown Detroit near landmarks like the

Fox Theatre, the Fillmore, and Grand Circus Park, they were built into an already existing

district; The District Detroit will house not only the new Red Wings stadium, but will be creating

an entirely new district that sits between Midtown and Downtown Detroit. Though it sounds very

exciting, the execution of this potential district will be indicative of its future success and

potential as a driver of economic development.

“The District is a walkable, livable sports and entertainment district that serves to connect Detroit along

Woodward Avenue between Downtown and Midtown. The District is dozens of blocks made up of five new,

mixed-use neighborhoods, each anchored by world-class venues such as the new Detroit Arena, the Fox

Theatre, Masonic Temple, Comerica Park, MotorCity Casino Hotel, Ford Field, Detroit Opera House, and

the Fillmore Detroit. The Development of The District is a unique opportunity to accelerate the

revitalization of Detroit by linking existing development efforts and current residents with new

development, new residents, jobs, visitors, and businesses”(District Detroit, 2014).

The District Detroit’s neighbor, Midtown, is well known as the home of Wayne State

University and the Detroit Institute of Arts, as well as the place to be for young professionals.

Economic development in this neighborhood is fairing quite well with the influx of small

businesses and associated job creation – the neighborhood has become known for its unique

eateries, selection of bars and breweries, and niche clothing shops. Midtown has found a sound

economic development formula, but how will District Detroit fare? It is hard to say this early on,

but with the information that has been released to this point; there is certainly room for

brainstorming and innovation in hopes of better securing the district as a viable neighborhood.

Connecting districts will raise a number of questions - how can we make sure these districts

continue to grow? Will job creation be a focal point? How will the M-1 rail fit into these plans?

Will there be affordable housing available? I will address these questions and other topics as we

move toward the goals and strategies portion of the project.

The Specifics of the Arena and its Neighborhoods

The new arena that will be anchoring District Detroit will seat around 20,000

fans, which includes four 32-person suites, eight 20-person suites, and thirty-four 16-person

suites. The facility will be eight stories in height, and will also house a public plaza, residential

housing, and a five-story parking garage that with around 1,200 spaces. “Olympia previously

disclosed that the yet-unnamed arena, which has been in planning since the 1990s, will be a

“deconstructed” design that pulls the glass-roofed

concourse, offices and other elements in separate

buildings outside the arena to make its restaurants

and retail available all the time, even when the

venue isn’t being used for hockey or events. The

deconstructed design turns the concourse into a type

of street around the seating bowl. The roof will be

LED-lit and can change colors or display images”

(Shea, 2014). In terms of housing, the arena will

offer: 56 efficiency lofts (690 sq. ft.), 20 efficiency

studios (475 sq. ft.), 8 one-bedroom units (960 sq. ft.), 64 one-bedroom units (710 sq. ft.), 20 two-

bedroom units (970 sq. ft.), and 16 townhouses (1,365 sq. ft.). The arena itself will cost $450

million, with the total project coming in at $650 million - $365.5 million will be private funding,

while $285 million will be publicly funded. The Downtown Development Authority will own the

arena.

“The arena is the centerpiece of a proposed 50-plus block entertainment district

that Olympia unveiled in July. The plan calls for $200 million, or more, worth of restaurants,

bars, retail and housing to the west and south of the arena, creating new mixed-use neighborhoods

in the current area around the Fox Theatre and Comerica Park – all to be paid for by Olympia or

third-party investors/developers. A widened Woodward Avenue bridge over the Fisher Freeway

will be lined with storefront shops for pedestrians. The district will be linked into the M-1 Rail

streetcar project on Woodward” (Shea, 2014).

There are five planned neighborhoods for the 50-plus block district:

Columbia Street – shops, cafes, galleries

Columbia Park - urban greenspace

Woodward Square – home of Red Wings arena, nightlife, restaurants, lofts

Wildcat Corner – in between the Lions and Tigers venues (hence the name), a sports-

centric area that welcomes fans on game days as a pre and post entertainment

neighborhood equipped with street vendors and bars

Cass Park Village – independent shops, markets; artist community

Economic Development Goals and Strategies for District Detroit, the Red Wings Arena, and

Midtown

With only small pieces of information being released to the public every week on the

development, citizens and businesses in Midtown and Downtown are likely to speculate about

what will be coming to District Detroit – with the general framework of what is expected to be in

the district complete, this is the perfect opportunity to explore the peculiarities of the

neighborhoods, and build on the established framework and create very concise economic

development goals and strategies between the neighborhoods to ensure that they all prosper

collectively and while retaining their respective uniqueness.

Goal 1: To enable the new Red wings stadium and district Detroit to

Rebrand and reshape the existing midtown and downtown areas into

a coherent, viable, relevant, expanding distinct destination in

Detroit (focus on quality of life)

STRATEGIES 1 & 2:

1. Promote mixed-use plans – housing and business incubation in an integrated nature

2. Continue to support small business development in district to maintain unique

characteristics

“Livability can mean different things to different people. Nearly every community

possesses natural features, facilities, or simply an aesthetic quality that endears it to certain

people. Local governments must identify their “quality of life” attributes, build on them, and

effectively promote them to the business community” (Leigh, Blakely, 2013). We know that

quality of life metrics are very important to consider in economic development due to their ability

to attract and retain businesses and their employees, as well as residents of the area. With 50 plus

blocks dedicated to this development, business and housing incubation need to be a primary

strategy going forward. It appears as though housing in the plans for the Woodward Square

neighborhood (where the arena will be), it is unclear what other additional residential zones will

be added to the district – it also appears that all of the neighborhoods have an entertainment

focus, which is good, but they shouldn’t pigeonhole themselves into that specific industry.

Mixed-use developments will be key for District Detroit – the district can find the most success

through designation and utilization of smart zones and enterprise zones in mixed-use

developments, while still retaining its established local culture.

With all of the space District Detroit has to work with, it would be in their best interest to

be as innovative as possible when it comes to business and housing incubation. In Midtown, we

know that the entrepreneurial spirit is alive and

well with the number of unique restaurants and

small businesses, and academic prowess is growing

with all of the top-tier research coming out of

Wayne State University – on the other hand, in

downtown, we know that finance, IT, and

healthcare are growing rapidly, so it would make

sense to fuse Midtown and Downtown’s strengths

and develop them further in District Detroit, which

would make all three neighborhoods one

continuous leader in entrepreneurship, research,

healthcare and IT – a giant smart zone. The city could then work with District Detroit to require

each neighborhood to designate a certain percentage designated to each of those industries – for

purposes of business incubation, entrepreneurs would likely get a larger percentage of

representation in each neighborhood. As far as the Red Wings arena goes, a percentage of office

space within the facility could also be designated to small business and/or start-up companies – as

a tenant, theses businesses could also get a portion of advertising within the arena during game

nights, as well as be spotlighted for an event like “small business night” that would take place

during an allotted number of Red Wings home games per season to fuel interest and employment

opportunities. To further focus on business incubation, with the leadership of the Michigan

Business Incubator Association, Wayne State University, and Quicken Loans and/or Compuware

could partner to create a small business and innovation assistance center to provide consulting,

management training, and research services for small businesses/new start-ups. Another way the

district could assist small business and drive competition could be through an RFP (request for

Detroit Business

Incubators

TechTown Detroit

Offers tech start-ups 12 week training

through Venture Accelerator program

FoodLab Detroit

Aims to create a diverse ecosystem of

triple-bottom-line food businesses as part of a good food movement that is

accountable to all Detroiters

Hatch Detroit

Where average citizens have a role in

voting for the type of retail they want in their community

Green Garage

Developing and nurturing of its triple-

bottom-line businesses-in-residence

The New Economy Initiative

A special project of the Community

Foundation for Southeast Michigan –

building a network of support for local entrepreneurs and small businesses

http://www.sustainablebrands.com/news_and_views/startups/anna_lui/6

_incubators_breeding_better_businesses_rebuild_detroit

proposal) that would be a community-based project specifically for the City of Detroit, or for the

neighborhoods within the district. The small businesses would submit their request to a

designated body, where they would decide on who makes the best case and award them with

specified funding to complete the project and build small business awareness – the funding could

come from revenue collected on ticket sales, parking, concessions, and merchandise from the new

Red Wings arena. As it stands now, Olympia Entertainment will receive 100% of the profits from

the arena, which was not the case with the Red Wings former home, Joe Louis Arena. Joe Louis

Arena received revenue from the aforementioned and generated around $7 million a year for the

City of Detroit – this policy could not only be reinstated, but the percentage of which goes back

to the city could be upped and put into a discretionary fund centered around economic

development for the neighborhood. Along with general emphasis on small-business, being

mindful of social enterprise within the district would be to our advantage – a great example of

this would be Ben & Jerry’s Ice Cream, which happens to have a shop on Woodward Avenue:

“Ben & Jerry’s presents an example of social enterprise, a trend also known as social entrepreneurialism or

more-than-profit business. This is where nonprofit work collides with for-profit motives, or, to use the

catchy slogan of the field’s advocates, it’s where mission meets the marketplace. Social enterprises achieve

social ends through business means, or more simply, the promoters of social enterprises help homeless,

abused, addicted, and otherwise troubled people by creating jobs for them when no one else will. Goodwill

Industries, the nonprofit group best known for running second-hand clothing stores around the country,

owns and operates the Ben & Jerry’s on Woodward. Ben & Jerry’s Co. operates or licenses a lot of stores

around the country, some of them operating like the one on Woodward as what the company calls

PartnerShops – ventures where a nonprofit like Goodwill, rather than a for-profit investor, owns and

operates the shop. Profits go back into the store or to support Goodwill’s other ventures to help the poor,

instead of to investors only concerned with the bottom line” (Gallagher, 2010).

As far as other facilities go for the small businesses, IT, healthcare, and finance, an

innovative way to integrate them into the district would be to one or two hybrid developments,

and by that I mean a combination of research, science, technology and business parks as a

diverse, business-centric development. This type of development would bring uniqueness and

generate great interest from businesses and companies outside of Michigan. With the exception of

heavy manufacturing, a hybrid park like this would mesh well in an urban setting, especially with

the presence of Wayne State University in Midtown. On the ground floor, a brewery owner is

celebrating his first batch of beer sold to a specialty market, on the second floor a student from

Wayne State University is designing a new prosthetic leg that will change the prosthetics game as

we know it, in the office next to the student, a software developer and biologist are working on

improving an app and device that can tell you if you have HIV or another sexually transmitted

disease within thirty minutes – and to think, all of this started with the development of a hockey

arena. With the Woodward Technology Corridor already doing some great work, the potential

impact an expanded smart zone could have would be well worth the investment.

“Detroit’s first task is to grow itself some locally rooted businesses. Detroiters know that corporate

America has mostly abandoned them but for picking over the bones. The new firms will need to sustain a

business model that doesn’t depend upon making steel or cars and employing hundreds of thousands of

blue-collar workers. And the new firms will have to band together to help each other in a way the business

schools usually never teach and may not even recognize”

(Gallagher, 2010).

We can’t forget our housing in mixed-use developments

– as it looks now, much of the district will be quite dense

and built up as opposed to out, and no definitive figures

have been released for the total number of units or people

the entire district could potentially house, so that leaves

with a lot of room to work with. Its hard to say how many

stories these buildings will be, but lets say that each

neighborhood could house between 500 and 1,500

residents within its housing. With five neighborhoods, at

max, the district is looking 7,500 additional bodies in the

downtown area, at the low, 2,500 people – of course, the

more people the better, but in a city that has lost a

massive chunk of its population, any number is a victory.

Much like the new arena, housing for District Detroit

Downtown and midtown

Housing Incentives

If you live Downtown and work at Compuware,

DTE Energy, Marketing Associates, Quicken Loans,

or Strategic Solutions:

New homeowners receive up to $20,000

forgivable loan toward the purchase of

their primary residence

New renters receive a $2,500 allowance

of funding toward the cost of their

apartment in the first year, followed by

additional funding of $1,000 the second

year

Existing renters receive a $1,000

allowance of funding for renewing a

lease

Existing homeowners receive matching

funds of up to $5,000 for exterior

improvements for projects of $10,000 or

more

If you live in Midtown and work at the Detroit

Medical Center, Henry Ford Health System, or

Wayne State University:

New homeowners relocating to the

district with a one to one matching

forgivable loan up to $20,000 toward

the purchase of their primary residence

New renters with a $2,500 allowance

toward the cost of their apartment in

the first year followed by an additional

allowance of $1,000 for the second year

Existing renters within the district will

be eligible for an allowance of $1,000

over one year when an existing lease is

renewed or when relocating within the

district

Existing homeowners in the district

with a matching allowance of up to

$5,000 for exterior improvements for

projects of $10,000 or more http://www.livemidtown.org/

www.detroitlivedowntown.org

would be broken up into efficiencies, one-bedroom apartments, two bedroom apartments,

townhomes, and lofts. Yes, getting urban housing occupied can be difficult, but with the

incentives that Downtown and Midtown already offer, it may be a little easier than we think. If

you refer to the chart to the left, you will see the criteria for the incentives; we can keep those the

same, but also make employees and owners of small-businesses and start-ups, eligible for

incentives as well.

“The Live Midtown and Live Downtown residential incentive programs offer the possibility of not only

repopulating various neighborhoods but also for stabilizing, if not increasing, home values in these areas.

However, tight inventory has hindered the Live Midtown program. Many more individuals and families

were interested in the program, but they were dissatisfied with what was available. Apart from the limited

funds provided by the sponsor-collaborators, Midtown and other areas need additional newly constructed or

renovated residential inventory, drawing on the conversion of employ office buildings. According to

Detroit realtors, “To get more people to want to buy, we need more options” (Solomon, 2013).

Other incentives that could be offered for the district’s housing could be something along the

lines of the of the Good Neighbor Next Door program through the U.S. Department of Housing

and Urban Development. The Good Neighbor Next Door program offers law enforcement

officers, pre-K through 12th grade teachers, firefighters, and emergency medical technicians a

50% discount on the list price of the home pending you live in the property for 36 months as your

sole residence; the home has to be in a designated revitalization area, and it also has to be a single

family home. Within District Detroit, the criteria would change – there would be no requirement

to be living in a single-family home, but discounts would vary depending on the residence; 15%

discount on rent for efficiencies, 20% discount for one and two-bedroom homes, and a 35%

discount on the purchase of a townhome.

STRATEGY 3: Connecting affordable housing and job creation

“Increasingly, the link between safe and adequate housing and well-being has contributed to

community leaders, advocates, and policymakers demonstrating an understanding of the role that place

plays in influencing the lives and life chances of children and families. Living in a distressed neighborhood

exacerbates the effects of family poverty on individual educational achievement, economic prospects, and

health as well as other indicators of well-being. Neighborhoods of concentrated poverty also often lack the

supports, services, and opportunities residents need to reach their full potential” (Center for the Study of

Social Policy, 2011).

We know that Detroit has a faltering education system and numerous issues with housing

options for its residents, and that is why District Detroit should have an emphasis on affordable

housing and its impact on education and job creation. District Detroit should do the best it can to

get affordable housing to make up between 25 and 35 percent of overall housing options within

the five neighborhoods in the district. Going back to the housing incentives mentioned above, the

affordable housing in the district would be open to anyone that would generally qualify for it, but

first preference would be to those who work in low-paying positions that the jobs that keep the

district running from day to day – emphasis would be on those working in the Red Wings arena in

concessions and maintenance, as well as all of the food service workers, and retail clerks. It is

estimated that the arena will create 8,300 construction jobs, of which 1,100 will be permanent

post-construction jobs, which is roughly only 13 percent retention; to change that, and create

more jobs, the district could retain 3,500 to 4,000 of those jobs and disperse them among District

Detroit since it is such a large area (and will surely need on-call construction and maintenance),

as well as dispersing them throughout Midtown and Detroit to fill vacancies in places like Wayne

State University, Henry Ford Health System, or the Detroit Medical Center for instance – the

wages paid for construction services can vary quite greatly, so those on the lower end of the pay

range would also be given first preference in terms of affordable housing. As mentioned, Detroit

has shown reliance on entrepreneurship to establish its uniqueness, and by that meaning that there

is not a large presence of national retailers or restaurants – there is generally a disdain for the big-

box retailers since they are typically associated with sprawl, but there are instances where they

have positive impacts. With Detroit being designated as a food desert, it would be worth the

districts time to consider offering a Meijer (the closest is on Woodward Avenue, but practically in

Ferndale), or a Target in one of the neighborhoods on one condition; they offer affordable

housing within the facility. If a Target or Meijer took up the ground floor in one of the

developments within the district, the two or three floors above it would be zoned exclusively for

affordable housing in which the employees of the Target, Meijer, or whatever big-box was there

have first preference to live. The idea of housing within big-box stores is a strategy that has been

used sparingly in commercial revitalization, but it can certainly work in this scenario.

Goal 2: Connect Midtown to Downtown (through District Detroit)

STRATEGY 1: Utilize Woodward Avenue to Connect Neighborhoods

To connect all three neighborhoods in a manner that works the most efficiently for both

residents and visitors, public transportation is one of the most integral pieces of the puzzle.

Detroit currently has a heavy reliance on a bus system that has its flaws, but also on the right

track with the construction of their M-1 rail system. Construction began in July 2014 and is

expected to end near the final

months of 2016, which means it

would be complete just before

the Red Wings arena would be

finished. The rail system will

initially be 3.3 miles long, and

exclusively running in Detroit.

District Detroit will play a large

role in the rail systems success –

with District Detroit bridging

the two neighborhoods, it is likely they will see the most business and use from the rail cars at

stops within the District between residents, work commuters, and entertainment-goers, while

Downtown will likely see the most stops for work commuters, and Midtown will see another

good deal of residents and entertainment-goers.

For further development, it would be wise to have the M-1 Rail extend out of Detroit and

into neighboring Ferndale and Royal Oak to start the connection of Detroit to the rest of

Southeast Michigan – Ferndale and Royal Oak both have smaller scale downtown areas, and

many residents who work in Detroit, which is added benefit in the form of regular revenue for the

railcar. The specifics on tickets and payment have not be released as of yet, but thinking ahead, to

ensure payment to ride, the city of Detroit may want to contract with a security agency to make

sure all riders are paying. San Diego has a very popular tram system that runs throughout the city,

but more often than not, people are riding for free due to the system that is in place; the tram is

losing money for the city instead of the opposite.

STRATEGY 2: Focus on Aesthetic Improvements throughout the District

“There is little question that a quality visual environment is a valuable resource. Scientific

evidence has established that individuals experience significant physiological and psychological benefits

from being able to view scenes of nature and other attractive sights. Moreover, when asked how much they

value having access to such quality visual experiences, individuals consistently respond that it ranks as one

of their highest priorities for quality of life. Evidence also shows that by undertaking initiatives to improve

the appearance of their communities, local officials can not only improve citizens' quality of life but also

their communities' potential for economic development.” (Commonwealth of Virginia, “The Impact of

Aesthetics on the Economy and Quality of Life in Virginia and its Localities”, 2000).

Detroit does a pretty good job at keeping a neighborhood feel within many of its districts, but it

has the opportunity to really capitalize on that feel with the right type of aesthetic additions in

Community and economic Benefit of M-1 Rail

The M-1 RAIL Streetcar is expected to provide a major economic boost of more than $3billion in development and 10,000

new housing units over the next 10 years for the Woodward corridor, and be the first piece of a more robust regional transit

strategy to connect Southeast Michigan

It has been, and will continue to be, an economic driver benefiting a variety of stakeholders, including citizens of

Detroit who will be better connected and businesses and major institutions along and adjacent to the route

The Woodward Avenue corridor provides a direct link to over 135,00 jobs and 36,000 residents. The M-1 Rail

Project will be a catalyst for continued job growth, economic vitality and improved mobility.

The consolidated Appropriations Act of 2010 allows the private and philanthropic investments being secured by

M-1 RAIL to be continued as part of “local share” for a New Starts funded rail or RRT system

Detroit-based companies, along with women, minority and disadvantaged business enterprises (DBE) have been awarded nearly 30 percent of the construction and concurrent road work for the M-1 RAIL

Streetcar project – that amounts to nearly $40 million in contracts awarded to Detroit-based and certified women,

minority, and DBE businesses. M-1 RAIL inclusion percentage is twice the national average when compared to

similar projects.

http://m-1rail.com/streetcar-line/community-economic-benefit/

District Detroit; greenspace and art will help retain that neighborhood feel and further the

popularity of the district. With the Detroit Institute of Arts and the College for Creative Studies in

Midtown, art has a large presence in the city, and I have to believe that artists would line up to

make the neighborhoods within District Detroit district. Ideas that could work would be:

revolving art exhibitions within each neighborhood, adequate greenspace for each neighborhood

that could be home to revolving art installations (sculpture, etc.) or community theatre

productions, and art up and down Woodward Avenue following the M-1 Rail (this would include

changing art within each rail stop).

“If art can produce jobs and revenue (ArtPrize), cities like Grand Rapids will take it. All our older

industrial cities will do the same. Nobody asserts that a few art events would ever make up for those

losses. But as communities try to reimagine their economies, they are looking to art along with much

else. Just as we accept that the model of municipal government is broken and needs replacing, so, too,

must our economic models in these communities be replaced. Anything that offers hope gets a serious

hearing, including things previously overlooked in economic development like art and cultural events.

A 2012 report called “creative State Michigan”, released by ArtServe Michigan, the state’s leading

cultural advocacy organization, found that 2011 arts and cultural organizations had contributed nearly

five hundred million dollars to the Michigan economy in 2009 – the same year that General Motors

and Chrysler were filing for bankruptcy. Art and culture revenue included $152 million paid out in

salaries for 15,560 jobs. From 2006 to 2010, the number of arts-related jobs increased by four percent

in Michigan, and arts-related businesses increased by fort-three percent – again while overall job

numbers in the state were in free fall” (Gallagher, 2010).

With a heavy focus on art within the city, visitors would potentially stay in the area longer, keep

coming back due to the always-changing nature of the exhibits, they would continue to keep

spending money in the neighborhoods, and potentially seek residency within the district. Along

with art, urban agriculture is another strategy within improving aesthetics as well as partnerships

within the district – think of smaller gardens within the district at ground level, or some on some

of the rooftops that are not multi-story. The creation of a garden co-op for the myriad of local

restaurants would certainly drive public interest in the area and appeal to those living and

working in the different neighborhoods.

“That’s not to say that gardeners don’t grow a lot of food in places like Detroit, where the nonprofit

“Greening of Detroit” organization counts more than twelve hundred family, school, and community

gardens in the city. Most of these-the vast majority—remain tiny, often measuring no more than one vacant

house lot or even smaller. Estimates of how much food gets grown on these plots seem to be mostly

guesswork, like the “Greening of Detroit’s” estimate from 2009 of 330,000 pounds of food produced that

year in Detroit. But the presence of hope is real, and spirit remains the best fertilizer. If growers bring the

proper enthusiasm and get the right technical help, even Detroit can prove amazingly productive, as it does

at the nonprofit “Earthworks” farm on the city’s east side, where dozens of crops go to feed the needy at the

nearby Capuchin Soup Kitchen” (Gallagher, 2010).

STRATEGY 3: Marketing and Branding a New Image for the City and Promotion of the District

Over the last few years, Detroit has begun ditch its image it carried throughout the 80s

and 90s as a city with no future that was rife with crime and full of corruption – now though

crime and corruption exist in every city, Detroit is certainly make strides toward changing that,

and the idea that the city has no future has been pushed to the side. So, what can we due to re-

brand the city and establish a brand and image for the new district? “Unless you’ve lived in a

particular city or have a good reason to know about it, the chances are that you think about it in

terms of a handful of qualities or attributes, a promise, some kind of story. That simple brand

narrative can have a major impact on your decision to visit the city, to but its products or services,

to do business there, or even to relocate there” (CEO’s for Cities, “Branding Your City”, 2014).

When we think of places like Washington D.C. we think of power, for Los Angeles its

superstardom, or for New Orleans we think of Mardi Gras – power, superstardom, Mardi Gras,

these are all brands. City brands are often tied to their history, so for us, our two big historical

brands have been the automotive capital and the less appealing riots of 1967, both have which

have shaped the perception of Michiganders and the rest of the country alike. “Development of a

brand strategy for a city leverages the features of that place to provide a relevant and compelling

promise to a target audience. It is not an ad campaign or a tagline. Rather, the branding strategy is

deeper, more emotionally shared vision that influences actions” (CEO’s for Cities, “Branding

Your City”, 2014). For Detroit and District Detroit to do this, the following has to happen: 1. We

have to change the perception of our neighborhoods that have a poor image among our residents,

visitors, and stakeholders (internal and external), 2. Establish a common vision for the future of

the city and district, 3. Establish a consistent representation of each place, 4. Improve our position

locally, regionally, and nationally, 5. Make the city and district more appealing by curbing

unfavorable stereotypes. Working with business leaders, elected officials, universities, media,

residents, and cultural institutions, we can strategize around our image and branding – while

working with all of these stakeholders we have to address the following questions:

What does the place stand for today – both its strengths and weaknesses?

What can and should the place stand for in the future?

What will make the place unique, valued, and attractive to target businesses and

consumer audiences?

How will we make this positioning a reality?

What role do key stakeholders and community groups have in bringing the brand to

life?

How will we measure the success of the brand?

(CEO’s for Cities, “Branding Your City”, 2014)

Detroiters are generally full of pride, and we have all the tools to make our city and District

Detroit one of the best in the Midwest (potential slogan?), but we have to take branding our new

image seriously to do so.

Understanding how and why Arenas function as drivers of

Economic Development – Benefits and challenges

“New sports and cultural facilities do change where people spend money. That change provides

community leaders with a strategic opportunity to capitalize on the attraction of large crowds and use the

new location for that economic activity to leverage development. Sports facilities, entertainment

complexes, and cultural facilities that are part of large-scale redevelopment efforts involving substantial

levels of private investment can renew downtown areas, creating new images, and generating real

economic development. But, outcomes like that requires plans and a substantial investment of private

capital” (Rosentraub, 2010).

To further grasp the impact of arenas on economic development, we have to understand

the difference between subsidies and strategic investments. A subsidy is when the public pays for

a good chunk or all of the cost of building and maintaining an arena or entertainment center while

the owners of the team, or other businesses owners retain all revenue from the developments

events without having to do much investing. On the flipside, investments by the public center

around increased tax revenues that offset tax dollars spent, or by the construction of a new

neighborhood funded by private investment.

Most cities envision the development of a new arena and neighboring developments as

ways to revitalize downtowns that were once hustling and bustling. Since the 50’s, we have seen

many large cities lose their populations at staggering rates due to the popularity of the suburbs, as

well as social issues like major rioting that has occurred in each decade since white flight began

to take shape – “for other cities, entertainment venues were ways of convincing people that cities

and their downtown areas were safe places to visit, dine, and enjoy an evenings entertainment. In

areas where riots or large-scale demographic changes had taken place, just getting people to come

downtown was a lofty goal” (Rosentraub, 2010). Cities were desperately trying to reclaim their

golden years of economic stability.

Over the years, we’ve learned a great deal about what works and what doesn’t in our

downtowns – first and foremost, creating a unique experience is one of the, if not the most

integral piece of a successful downtown area. As a downtown, you simply cannot have the same

things that your suburban counterparts have to offer. “What were needed were unique activities

that did not exist anywhere else in a region. The search was on for that uniqueness or silver bullet.

Sports and culture quickly assumed new positions of prominence” (Rosentraub, 2010). With

populations running to the suburbs, local governments responsibilities increased as they realized

they needed to focus on improving quality of life, which would convince people and business to

stay in the area as well as attract those who had already completed their defection to the suburbs.

The relationship between sports and social capital cannot be denied:

“While some might dislike sports, their enduring importance and the physical value place on the

facilities used for games is what makes sports part of the social capital of a society. Social capital has been

defined as institutions that facilitate “the development of relationships of mutual reciprocity embedded in

social networks that enable action…generate trust, establish expectations, and create norms. Social capital’s

value centres upon the fact that it identifies certain important aspects of a community’s social structure and

the significance of the social organization. Sports also become part of the social capital of a society through

their role as socializing institutions that increase stability and as tools to underscore the political values and

strength of a society. Lefebrve has concluded that place within a city that encourage identification with a

group facilitate the ability of individuals to build relationships that enhance identities and reduce the stress

of isolation that can be endemic in large societies. How do sports and the facilities they use create this type

of social capital? Any community can point to celebrations when times win major games or championships

and the “electricity” that seems to change daily life” (Rosentraub, 2010).

“From an economic development standpoint, independent researchers have reached six sets of

conclusions:

1. At the regional level, facilities and teams have only marginal effects, at best on economic

development

2. Facilities developed for large-scale events that attract a large number of tourists can have very

positive short-term effects, but there is scant evidence of any longer-term positive effects. Indeed

some work suggest that, after the Olympics or World Cup, tourism levels drop substantially

leaving regions with underutilized facilities or an excess of hotel rooms and other amenities that

may be financially draining to support.

3. If a set of amenities can continue on an annual basis to attract a large number of events that bring

tourists to an area, some positive outcomes can be sustained

4. It does matter where facilities are built, “in that downtown locations are able to (1) concentrate

other amenities into a package that enhances local spending in the area of a facility and (2) it is

indeed possible to move recreational spending through a facility’s placement that does change

local revenue streams

5. It is possible to use sports facilities to anchor redevelopment efforts if plans immediately include

financial commitments from the private or nonprofit sectors. When this takes place development

patterns do change

6. While there is scant evidence of any regional effects, where development occurs within a region

may well be as important as if it occurs. Sports facilities can do and change that pattern when that

development is concentrated in downtown areas with other amenities and with commitments of

private and nonprofit investments”

(Rosentraub, 2010)

“Opportunity and operating costs, as well as the likelihood that stadium activity will “crowd out” local

economic activity, depend on the character of the neighborhood economy. Is there a natural synergy

between the stadium and neighborhood, or will expenses mount and displacement and inactivity occur on a

scale that ensures the cost of hosting the stadium exceeds the expected benefit? Stadiums require large

tracts of land, not only for the structure itself but for parking if the stadium site of the institutional character

of the metropolis or region makes it accessible primarily by automobile. Stadiums are not like shopping

malls, where economic activity occurs throughout the course of a day, every day. Stadiums, particularly

open-air football stadiums, spend more time waiting than working. How the community handles the “dead

time” in the stadium and its attendant areas is critical to the ability of the community to use the facility to

its economic advantage” (Rich, 2000)

Case Studies – Sports and Arena Developments in Cleveland and

Los Angeles

A. Sports, Culture, and Entertainment in Cleveland in the Midst of

Economic Downturn

Like many cities during economic contraction, Cleveland experienced its fair share of

downtown decline – further exasperating the issue was the fact that Cleveland had a very loose

vision in terms of redevelopment instead of an actual plan, which was not helped by the very

scattered layout of the downtown area. “Placing assets in diffused sections of a large downtown

area, as was done in Cleveland, produces more challenges to ensure than abandoned or

underutilized properties are quickly developed. In addition, the presence of vacant or abandon

properties weakens an image of restoration and visibility” (Rosentraub, 2010). The City of

Cleveland and Cuyahoga County took their tax dollars and investment them strictly in the Rock

and Roll Hall of Fame and sports facilities, with no commitments for private investment to

redevelop any part/parts of the downtown area; they simply hoped that the private sector would

commit to the city’s future plans on their own accords.

Like many cities of that time, Cleveland was affected by racial conflict and white flight;

during the 60s and 70s, the number of people moving out of the city was equal to 34.5 percent of

its 1960 population. In 1966 and 1968, two large-scale riots occurred which tarnished the image

of the city much like the riots of 1967 did to its neighbor to the north, Detroit.

“The eastern part of Cleveland was soon completely separated by race and economic class from its western

half and from the adjacent eastern suburbs. In later years, the divide would be predominantly economic as

the growing black middle and upper class also moved to the suburbs. Family median income in the eastern

part of Cleveland would be less than half of that of families living in the adjacent suburbs. Cleveland’s

school system that was once the pride of the region fell into failure and was annually ranked among the

poorest in Ohio. Most people who could afford to live in other cities moved out of Cleveland. The resulting

racial and economic segregation would scare the city and region for decades and led to Cleveland losing

more than half its 1950 population base. Between 1960 and 1970, more than 125,000 people left and then

another 177,000 people moved out in the 1980s. The decline continued into a third decade with the loss of

another 68,000 residents in the 1980s.” (Rosentraub, 2010).

Along with the staggering population loss, Cleveland’s confidence as a city took another hit in the

70s with the loss of more than 200,000 manufacturing jobs – the job decline continued into the

2000s and the future looked quite dim for the city.

A public-private partnership was the first piece to redeveloping the crumbling city – the

theatre district in Cleveland has essentially folded, leaving nothing but vacant buildings and

remnants of its better times, so in response to that, a group of citizen-activists with the vision of

preservation and restoration created a nonprofit corporation named the “Playhouse Square

Foundation” to bring the district back to health.

“With the assistance of the community’s large private foundations (the Cleveland Foundation and the

Gund Foundation), individual donors, and eventually Cuyahoga County itself (but in the absence of strong

or committed leadership from the public sector), each theater was restored. Today the Play House Square

Foundation operates the largest theater district outside of New York City and more than 1 million tickets

are sold annually for shows, plays, concerts, speeches, and other performances. To advance real estate

development in the adjacent area, leadership from the Playhouse Theater Foundation created the Cleveland

Theater District Development Coportation. This community development corporation has restored some

buildings and built new commercial space, parking facilities, a hotel, and a public plaza for performances,

celebrations, and concerts. Playhouse Square became a symbol of what was possible and the value of

partnerships between community groups, leading foundations, and private benefactors.” (Rosentraub,

2010).

So Playhouse Square ended up doing pretty well, but what happened with sports and

arena development? It took three tries to finally get the green light on a new ballpark and arena

for Downtown Cleveland. Mayor George Voinovich and his administration and private business

partners had focused on developing a new stadium for the Cleveland Indians, and in 1984 (the

first try), a proposal for a stadium financed by property taxes increases was defeated (2 to

1margin) – even with the proposal being defeated, in 1986 the Greater Cleveland Domed Stadium

Development Corporation was able to acquire land and buildings that were the home of the

declining Central Market, which in turn provided the land needed for the ballpark. “To purchase

the land, the Domed Stadium Corporation received a $6 million grand from the State and

borrowed $18 million from area banks. With no revenue streams to repay the debt, the Domed

Stadium Corporation turned to Cleveland Tomorrow. Cleveland Tomorrow was created and

funded by city business leaders as part of their commitment to help Mayor Voinovich in his

efforts to restore the city’s luster” (Rosentraub, 2010). The Cleveland Tomorrow Project ended

up taking responsibility for the debt, which started a number of real estate developments within

the city prior to any development of the ballpark or arena. In 1988, with deterioration of the

Central Market increasing at a rapid pace, another proposal was presented to build the ballpark

and arena on the land, but this time property taxes wouldn’t be raised, but taxes on alcohol and

tobacco would – the proposal met the same fate as the one four years earlier, as voters declined to

support any sort of tax increase for sports/entertainment facilities.

“In November 1989, Michael White was elected mayor. A surprise winner, the city’s second African-

American mayor (and Cleveland’s longest serving mayor with three four-year terms) was not a sports fan,

but indicated he would be inclined to urge voters to support a tax increase for a ballpark and arena if he

could be convinced the facilities would advance the economic development of downtown. Impressed with

the possibility that the arena could return a large number of events from the suburbs to the city, Mayor

White endorsed and strenuously campaigned to increase taxes to build two sports facilities. Framed as an

economic development and revitalization program, the proposal focused on the investments by the teams,

the commitments of support from Cleveland Tomorrow, and the changes for downtown from the presence

of sports and entertainment events all year” (Rosentraub, 2010).

For a second time, voters were asked to support increased taxes on sales of alcohol and tobacco to

finance the construction of a 42,000-seat ballpark and 20,000-seat arena – the third time proved to

be a charm as the proposal passed. It is interesting to note that a majority of voters who lived in

Cleveland (56 percent) voted against the tax increase for the stadium and arena, while a great deal

of support for the construction of the facilities came from the residents of the suburbs. Also, due

to the amount of time and tries it took to get the proposal passed, the MLB implied that it would

approve any kind of request from the Cleveland Indians to relocate if the stadium did not end up

being built, while on the other hand, Indians ownership never explicitly said they would take that

course of action.

“Cleveland’s “Hail Mary” pass to revitalize its downtown, change its image, and instill confidence in the

city and regions future included:

1. Building three new sports facilities

2. Restoration of the five theatres that constitute Playhouse Square

3. Opening two retail venues/shopping centers

4. Building the Rock and Roll Hall of Fame and Museum

5. Building the Science Center and IMAX Theatre

6. Building several new commercial office towers, each supported with property tax abatements”

(Rosentraub, 2010)

The “Hail Mary” has paid off pretty well for the city of Cleveland, especially in terms of

job retention and employment changes – between 1993 and 2007, payroll levels in the city

rose by almost $1.5 billion, there was no real decline even as population levels decreased, and

the increase in real wages in the University Circle neighborhood (healthcare) was around

$777 million (Rosentraub, 2010 - Department of Finance, City of Cleveland).

“Finally, Cleveland’s story also sheds important light on the role of business leaders in redevelopment

efforts. While a region’s corporate community may be initially focused on big-ticket itemrs, they are

not adverse to more neighborhood-based initiatives. The evidence from Cleveland’s experiences

suggest that business leadership groups clearly understand the need for and supports initiatives to

enhance public education systems and the quality of life in inner-city neighborhoods. Few if any of the

new retail centers in Cleveland’s inner-city neighborhoods would exist without the funding provided

by Cleveland Tomorrow and then the GCP. Moore recently, downtown businesses raised their own

taxes to create a Business Improvement District and new programs for the homeless. While critics

might still argue that the capitalized value of the subsidies for the sports and entertainment facilities

exceeds these commitments, it is also true that the suburban areas and their wealthier residents and the

business community pay a far larger proportion of the taxes used to build the amenities. At a

minimum, then, some of the negative images conveyed about the motives and objectives of the

corporate community must be amended based on the work of Cleveland Tomorrow and the GCP. Their

work should encourage other cities to engage their business communities in downtown and

neighborhood revitalization efforts” (Rosentraub, 2010).

Bringing Marquee Sports Franchises downtown and creating a

new look for Los Angeles in the Wake of Social Unrest

The early 90s were not a good time for Los Angeles between the beating of Rodney

King, the riots in 1992, and increasing homelessness, it wasn’t a place people were flocking

to. In 1993, Richard Riordan was elected Mayor (the first Republican Mayor in three

decades), and he set out to change the city’s image. Early on in his time in office, he asked a

staff member of his to think of ways to improve the $500 million convention center the city

housed – the Los Angeles Convention Center opened in 1971 boasting over 200,00 square

feet of space for exhibitors, but the facility failed miserably at attracting events, and the

surrounding neighborhood fell into disrepair over the years which made it difficult to market,

but instead of downsizing, the convention center saw an expansion of exhibition space.

Knowing that public money was being drained at enormous rates to operate the convention

center, the Mayor initially wanted to revitalize the area around the convention center in hopes

of a new look that would bring in more conventions; the end result was a new arena, theatre,

and district for Los Angeles.

In terms of convention centers, San Diego and Orange County were beating Los Angeles

every time, as they were both near attractions and located in safer neighborhoods - the idea of

bringing Los Angeles’ sports teams downtown to create a vibrant, fresh district began to take

shape. Well into the 90’s the Los Angeles Lakers and Los Angeles Kings played their home

games at the Great Western Forum in Inglewood, which was an obsolete arena with no suites,

club seats, or potential for other revenue streams; Dr. Charles Isgar, a part of the Mayor’s

staff recruited developer Steve Soboroff to help pitch to the teams that downtown Los

Angeles is where a new arena needed to be built.

“If convincing teams to relocate to downtown Los Angeles was not a sufficient challenge, there was

one other political element that had to be addressed. The new facility would have to be built without

any public subsidies. A majority of the members of the Los Angeles City Council were Democrats and

would be eager to attack any plan from a Republican mayor that subsidized another big-ticket

investment. A subsidy request by a mayor who himself was a wealthy real estate developer would be

portrayed as one “good ol’ boy” Republican helping his buddies or Los Angeles’ regime get

expaneded access to public money. On the other hand, if the arena could be built without a subsidy,

Mayor Riordan would be champion of a market-based approach that helped revitalize downtown Los

Angeles. Such an outcome could be a springboard for his reelection campaign. The challenge was to

identify the peculiar and profitable assets that downtown could offer to the teams’ owners that would

make them pay for 100 percent of the costs of a new arena.” (Rosentraub, 2010).

The owners of the Lakers and Kings were with ones who would make a new arena a

reality, and they had three options: 1. The Forum could get a complete overhaul and have an

extensive remodel, 2. A new arena could be built adjacent to the Forum on the existing

parking lot space, or 3. Find an ample amount of land somewhere else in the city for the new

arena and a neighboring entertainment development that would also house residential and

commercial development. As talks around development started, it was realized that there was

a limited amount of land outside the general area of the forum for a new arena and

development, but building the arena AND the entertainment development within the site of

the Forum was not something that could be done due to lack of space. After mulling the

options, a site in downtown Los Angeles with convenient freeway access ended up being the

suitor – “The downtown Los Angeles site was adjacent to north-south and east-west freeways

and the city was willing to use its eminent domain powers to ensure that the land needed for

an arena and an entertainment complex would be assembled and sold to the teams’ owners”

(Rosentraub, 2010).

“Los Angeles has three goals in negotiating with the teams:

1. It wanted extraordinary facilities built as close as possible to the convention center to change

the identity and image of the downtown area.

2. The city also wanted all of the deteriorating buildings near the convention center replaced.

3. The new arena had to be built without any public subsidies.”

(Rosentraub, 2010)

The first two goals don’t seem entirely unachievable, but the third one proved to be a bit tricky.

The site of the arena is adjacent to one of the busiest freeways in the country, and even the world

– this made the location very valuable in terms of advertising, that is if Los Angeles gave the

team owners the green light to build advertising towers. The advertising pylons the owners would

build would create an absurdly valuable revenue stream in partnership with naming rights for the

arena. “These incentives or assets that would give the team owners revenue streams no other city

or location could offer. If the team owners were permitted to erect their advertising towers and if

Los Angeles assisted in assembling the land, each of the city’s goals could be achieved”

(Rosentraub, 2010). In exchange for the construction of the advertising pylons, Los Angeles city

attorneys put forth a number of clauses, namely that the arena not be named after any alcohol,

beer, firearms, or tobacco companies.

“To assemble the land and build the needed infrastructure for the arena, the public sector had to invest

$71.1 million. The cost of the arena had been estimated at between $375 and $400 million. With this much

spent for the facility (in 1999 dollars), Los Angeles did receive a Taj Mahal of arenas. This was an

important objective for Mayor Riordan’s administration that was actively engaged with several partner in

numerous projects to rebuild the entire downtown area. Los Angeles’ goal was for the construction of a

first-class arena. When the final cost was realized and announced, Los Angeles knew it had an

extraordinary asset for its downtown redevelopment effort. The private sector paid for 81 percent of the

total cost if the final construction cost was $375 million and 82 percent if the final cost was $400 million.

Los Angeles borrowed $38.5 million equal to 10 percent of the project’s cost. The Los Angeles Convention

Center committed $20 million (5 percent of the project’s costs) drawn from the interest it earns on its

reserve fund to pay its bonds. The Los Angeles Community Redevelopment Agency invested $12.6 million

or paid between 3 and 4 percent of the project’s costs. The L.A. Arena Company is a subsidiary of AEG.

AEG (one of the leading sports and entertainment presenters in the world) owns STAPLES Center and met

its commitment to build one of the finest and most lavish arenas, thereby aiding in the development of

downtown Los Angeles” (Rosentraub, 2010).

The end result for the development was the construction of the STAPLES Center arena,

the Nokia Theatre, and L.A. Live (an entertainment complex featuring movie theatres, a bowling

alley, restaurants, nightlife, and office space). The development has done quite a bit for housing

as well – between the date of the announcement for

the arena and the end of 2007, there have been a total

of 10, 748 residential units constructed in downtown

Los Angeles. Los Angeles was able to revitalize

itself essentially due to the creation of two

advertising towers – “In addition, the city’s receipt

of specific revenues from the operation of the arena ensures that it will receive a positive cash

flow for decades. The public sector did have to make a large investment to have the entertainment

complex built, but that ensured that L.A. Live would be an extraordinary entertainment and

commercial center replete with residences. Leveraging $15 in investments from AEG for each

dollar it committed, many would consider Los Angeles a Major League Winner when it comes to

L.A. Live, too” (Rosentraub, 2010). Los Angeles is proof that sound leadership can attract a large

amount of private capital to an undesirable area.

What does success look like for district Detroit?

Success in District Detroit will be dependent on one word: resiliency. With the

aforementioned strategies and goals deployed correctly, District Detroit has the potential to

connect Midtown and Downtown as one comprehensive smart-zone - perhaps one of the leading

smart-zones in the country. Within each strategy and goal are factors that impact regional

economic capacity, socio-demographic capacity, and community connectivity capacity; the Red

Wings arena is a catalyst for income equality, economic diversification, regional affordability,

healthy business environment, educational attainment, poverty reduction, improved health, sound

civic infrastructure, metropolitan stability, and home ownership. If the district and the city are

able to maintain all of those factors, and continue to have diverse economic anchors (not just one,

like the auto industry), investment will continue to come to the city, and Detroit will be on its way

to being the leader of innovation, business development, job creation, and quality of life in the

Midwest.

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