Detroit Red Wings arena costs rise to $863M
- Costs for the Detroit Red Wings' Little Caesars Arena have now reached almost $863 million, according to Crain's Detroit Business, nearly double the original estimate of $450 million.
- Included in the new projections are $40 million for expenses related to the Detroit Pistons' relocation to the venue and $12 million of additional subsidies for the surrounding District Detroit development.
- State and local government financing accounts for $324 million of total stadium funding, and the Ilitch family, founders of Little Caesars and owners of the Red Wings, have contributed 62%, almost $539 million, toward construction of the downtown project, which includes the arena and parking garage.
Aside from the District Detroit subsidies, the Ilitch family, through its Olympia Development organization, has also financed work on the 50-block redevelopment project itself. So far, Olympia said, its investment in the project and ancillary development has reached more than $2 billion.
Last November, the Detroit Downtown Development Authority, which will ultimately own the arena, announced that costs had increased to $732.6 million. Olympia disputed the figure at the time, arguing that the city had included soft costs that the Ilitch-owned development company didn't recognize.
Before that, owner add-ons to the arena — including a mammoth LED screen, a practice rink, suite gondola seating and a video and graphic skin on the arena's exterior — pushed the price tag up to $627.5 million.
Because of the considerable city and state financing component, the city mandated that 51% of the estimated 5,500 workers on the project be Detroit residents. Despite what contractors said were their best efforts — including recruiting events like job fairs and employee training programs — they failed to meet that benchmark, so the city fined them a total of $500,000 last October.
The city of Detroit hopes the current building boom underway will revitalize the area. Officials say projects like the Red Wings arena development, the 6.6-mile QLine Streetcar initiative and a massive $70 million housing complex currently underway could reshape downtown Detroit.
- Crain's Detroit Business Latest Little Caesars Arena construction cost: $862.9 million
- The Detroit News State awards tax aid for Pistons move to Detroit
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