Questioning decisions
This week the announcement that the District Detroit project will be delayed until at least 2025 surprised no one. It is a glaring reminder of the failure of the strategy of using public money to support private business development.
It has been a year since the Detroit City Council and the state of Michigan agreed to nearly a billion dollars in tax breaks and incentives to support the development of District Detroit, a multi building, mixed use proposal crafted by the Ilitch family business to develop the area north of their Little Caesars Arena (LCA). The LCA is also a private enterprise supported with public funds.
Community groups and individuals strongly criticized the decision. Hundreds of people testified against the demand by Olympia, the Ilitch organization, for $798 million in tax incentives and tax breaks from the city and state. The deal effects Detroiters and our tax revenues for decades, taking money from schools, libraries, parks, and recreation.
One of the main objections was the history of the Ilitch organization and its tactic of “dereliction by design.” Since the 1990s the Ilitch organization has acquired properties in the lower Woodward-Cass Corridor and left them to rot. They hold over 70 properties, many of which they acquired from the city for $1. Because they intentionally held these properties and withheld any improvements, the area went into a downward spiral, making more properties cheaper to acquire. As one article explained, it is a strategy “that deliberately knocks life out of a neighborhood, then asks residents to help pay to revive it.” Much of this neglect was anything but benign. It included allowing intolerable living conditions for people with limited means and often brutal evictions.
Since 2012 Olympia has been promising development of the area. Then, they asked for and got $324 million in tax breaks to develop the District Detroit plan. Perhaps more importantly, they renegotiated the deal they had made with the city for financing LCA. In the original deal the city received a cut of the ticket, concessions, and merchandise sales. It was reported that the city garnered more than $10 million a year from its share of the sales and it was projected that the city would receive about $18 million annually by 2020. But the city agreed to remove that tax as part of the encouragement for new development.
During the latest hearings where people objected to the subsidies, some folks advocated for a return to a ticket tax, only to be told by the law department that such a proposal was “illegal.” Really?
Through this saga we have seen how the focus on community benefits agreements takes away our attention from the far more serious questions we face. How do we develop a city that welcomes and supports all people? Who do we develop a city for? How do we develop ways of living that sustain and restore life? How do we provide the essentials of life with dignity, respect, and care?
The drive to give away public money to support private business was strongly supported by the Mayor, several ministers, and the majority of the council. They reflect ideas that literally destroy people and neighborhoods.
Meanwhile citizens are organizing for tax justice and for a real vision of sustainable living. We encourage everyone who cares about a livable future to support these efforts.