Crain’s Detroit Business: Public-private arena deal expected

Public-private arena deal expected
Crain’s Detroit Business
Bill Shea
December 9, 2012

The Ilitch family lifted the veil last week, if just slightly, to expose some of its thinking on financing for a new downtown arena for their Detroit Red Wings.

Not surprisingly, public money is part of the equation for what the Ilitches are estimating to be a $650 million multiuse event center and long-term ancillary development that would include residential, retail and office space — along with thousands of predicted jobs and more than a billion dollars in economic impact — in a to-be-determined area in downtown Detroit. (See map.)

The family issued a statement last week discussing the first real details of the proposal publicly as part of an effort to support legislation that would permit economic development taxes already on the books in the city to be used for the project.

Nothing was said about what exactly $650 million buys, how much money the family would invest, or about other public or private financing mechanisms they’re mulling.

The Ilitches have said for years they want a new, more lucrative arena for the Wings to replace aging city-owned Joe Louis Arena. But they are extremely tight-lipped on details other than they want it somewhere near their other downtown investments. Those include the Fox Theatre, Comerica Park and MotorCity Hotel and Casino.

Economic development and sports stadium insiders say a variety of funding options exist, and each project tends to be tailored to local conditions.

There also is a blueprint readily available that can provide clues to what they might do: Comerica Park, home of the Ilitch-owned Detroit Tigers, was built for $300 million with a mixture of public and private money, as was adjacent $500 millionFord Field for the Ford family’s Detroit Lions.

Ballparks past, P3 future?

The Ilitches paid for most of Comerica Park but relied on $80 million in public bonds that are being repaid by a county use tax.

Another $80 million assembled by the city of Detroit, Wayne County, Detroit’s Downtown Development Authority and the Michigan Strategic Fund was used for supporting infrastructure, such as water and sewer lines, for the site of the two ballparks.

The stadiums are owned by the six-member public Detroit-Wayne County Stadium Authority and subleased to Detroit’s Downtown Development Authority, which in turn has operating contracts with the teams to run the ballparks. There’s been no discussion, at least in public, of the stadium authority being involved or if the Ilitches want to own the new arena outright.

The family’s statement last week indicated they’re interested in some type of public-private partnership deal to get the project built. Again, no details have been disclosed, and the Ilitches are declining to say anything else.

“P3s (public-private partnerships) are very common for the development of multiuse facilities and districts,” said Lisa Niscoromni, senior associate at the Detroit office of Minneapolis-based Hickey & Associates LLC, which specializes in site selection and incentives. She worked two years in Wayne County’s economic development office, until leaving for her current job in March.

Typically part of such partnerships are low interest bonds, sales and hotel tax increases, public infrastructure funding, admissions/parking taxes, assistance with property acquisition, utility assistance, tax abatements, and state and local grants, she said.

“The availability of certain partnership opportunities can depend on property ownership, proposed use, and other factors,” she said.

Outside of the DDA, there’s little the cash-strapped city can directly offer. The state and Wayne County are the more likely sources of any additional direct or indirect subsidies for the project.

“We’ve been working with the Ilitch family the past couple of years,” Wayne County Executive Robert Ficano said. “Everybody’s been looking at the finances. It’s premature to say what our role would be.”

He did say the county has discussed “two or three options” on financing for the project, but declined to discuss specifics. He also said negotiations with the state could be a possibility, without offering details.

Specifically how the state’s economic development agency, the Michigan Economic Development Corp., will be involved with the project remains unclear, and it’s not saying anything else.

Other money

The Ilitches are expected to put up some portion of the project’s costs themselves, and they have a notable fortune: They’ve stated that their companies, with the Detroit-based Little Caesars pizza chain as the backbone, generated more than $2.4 billion in revenue last year, but they don’t disclose details.

They could seek other outside private investment to allay costs. It’s common for teams to sell naming rights for the venue, or portions of it, and to craft marketing and media deals that provide steady income streams.

One name tied to the unsuccessful Ilitch bid to buy the Detroit Pistons in October 2010 was Sam Simon, owner of Taylor-based fuel distributor Atlas Oil Inc. Simon is a friend of the Ilitches. His annual revenue from Atlas is about $1 billion.

Mike Evans, Atlas executive vice president of business development, could not be reached late last week.

Another possibility for investment is Ada-based Amway Corp.

In September 2011, the Wings inked a deal with Amway, the network-based direct-marketing giant, to become the team’s first-ever presenting team sponsor. Financial terms were not disclosed, but that contract is thought to be a two-year, seven-figure deal.

The company says it isn’t involved in the project.

Amway has a number of other pro sports investments, such as holding the naming rights of the Amway Center, home to the National Basketball Association’s Orlando Magic.

Mixed use, mixed history

Recent hockey arena proposals have had a mixed history of delivering on promises — or happening at all, in the case of the New York Islanders.

Voters in Long Island’s Nassau County in August 2011 rejected a ballot proposal that would have authorized $400 million in general obligation bonds to replace county-owned Nassau Veterans Memorial Coliseum that opened as the Islanders’ home in 1972 at a cost of $31 million.

Team owner Charles Wang, the billionaire co-founder of CA Technologies, announced in October that the team would instead move in 2015 to the new $1 billion Barclays Center in Brooklyn, home to the NBA’s Nets.

The arena is part of the 22-acre, $4.9 billion Atlantic Yards development, which will include more than a dozen residential towers and middle-income housing, built largely on formerly blighted property, some seized through eminent domain. The project has faced court challenges and been slow to come to fruition.

Brooklyn is just the latest project to see slower-than-promised ancillary development.

The St. Louis Cardinals proposed a $600 million “ballpark village” concept in 1999 as part of the new Busch Stadium, which opened in 2006. Ideas for it have included restaurants, retail, a museum, a hall of fame and even a museum.

The project has been delayed repeatedly, with $100 million being approved by the city in June to aid construction. A proposed November groundbreaking didn’t happen.

Promised development of residential, retail, office space and bars around the Washington Nationals’ $611 million Nationals Park didn’t spring up as predicted when the stadium opened in 2008 in a blighted area. It’s been more of a slow trickle.

New York-based journalist Neil deMause, co-author of the book Field of Schemes, which takes a critical look at public funding for pro sports stadiums, said ancillary development around a venue is almost always part of any new sports venue proposal.

“It distracts people from the stadium subsidies,” he said. “It’s easy for them to build the arena, and later say the other stuff will get built when the market supports it.”

DeMause did note that arena developments in places like Columbus have been successful.

Nationwide Realty Investors, the real estate development arm of Nationwide Mutual Insurance Co., had spent $544 million in direct investment by 2008 on the 75-acre mixed-use around the Nationwide-owned (and entirely funded) Columbus Blue Jackets venue since 2000, according to an economic impact report from the John Glenn School of Public Affairs at Ohio State University.

The area, known as the Arena District, contains 1.5 million square feet of commercial real estate, restaurants and entertainment space and 600 apartments. About $750 million in almost entirely private funding has been invested in the district, with millions more planned.

Employment jumped almost 200 percent in the district’s first six years, to almost 5,500 full- and part-time jobs, the report said.

Could something like that work in Detroit? It’s much too soon to say, deMause said.

“It’s a risk. You don’t know. Detroit, the only urban corridor no one was moving into, is finally getting interest back,” he said.

Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19

For the article online, as well as, additional articles from Bill Shea and Crain’s Detroit Business, please click on the following link: Public-private arena deal expected.

IAMC Volunteer Event – Boys Town, Nebraska

IAMC 2012 Service Project - Boys TownParticipants at the IAMC Fall 2012 Professional Forum in Omaha, Nebraska took time away from the conference to volunteer at Boys Town.

At an IAMC forum, there are always a number of exciting and productive events that participants look forward to attending. However, there is no event more fulfilling than the IAMC Volunteer Service Project. In an effort to lend a helping hand to the host community, IAMC participants volunteered to spend time at the internationally-recognized Boys Town. For the 2012 service project, participants planted an apple orchard on the property. The project was a partnership between IAMC, Boys Town, the Arbor Day Foundation and the ReTree Nebraska Initiative.

Founded by Father Edward Flanagan in 1917, Boys Town offers a chance for life and opportunity for at-risk children, regardless of their race or religion. Since being recognized as an official village in 1936, countless children have been given a much-needed second opportunity thanks to Boys Town. Still functioning today, more than 500 children reside in the village. For more information on Boys Town, please visit their website.

Once again, the IAMC Volunteer Service Project was an incredible opportunity to give back to the host community, while also making new friends and working with great individuals. The service project is always a highlight to those that participate. Jason Hickey, President of Hickey & Associates, and IAMC member, participated in the service project, which marks the third time partaking in an IAMC community service event. As Winston Churchill once said, “We make a living by what we do, but we make a life by what we give.”

Pittsburgh Business Times: NAIOP panel sizes up Pittsburgh market

NAIOP panel sizes up Pittsburgh market
Pittsburgh Business Times
Tim Schooley, Reporter
Wednesday, November 14, 2012

Zac Vuncannon, a director for USAA, wasn’t expecting for his company’s first real estate investment in the Pittsburgh market to be as sought after as it was.

When the San Antonio-based insurance and financial conglomerate bought the two-building Park Place Corporate Center in North Fayette last year, Vuncannon said it was more to provide the local title company it owned here room to grow, expecting the remaining space would gradually fill in over time.

“Almost overnight, Williams stepped up,” said Vuncannon of the Tulsa-based oil and gas firm that quickly leased most if not all of its vacant second building. “We’ve seen first hand these energy companies coming in.”

He later added: “We have invested in Pittsburgh so we obviously believe in Pittsburgh.”

Vuncannon’s anecdote was just one shared last evening at a panel discussion of national site consultants and capital markets professionals at the NAIOP Developers’ Showcase at Allegheny Center that sought to gauge where Pittsburgh’s economy and real estate market stands in the national market and where it can improve.

The panel included the kinds of real estate professionals it has in the past, including Dean Barber, principal of a Plano, Texas-based site selection and economic development firm; Eugene Canale, a Pittsburgh native who now is a principal of Minnesota-based site selection firm Hickey & Associates; Will Hearn, principal of Site Dynamics, and a specialist in working with renewable energy and manufacturers; and Bruce Rutherford, an international director of Jones Lang LaSalle who leads the company’s global energy practice.

But this year the event also brought in the kind of money people that help guide major real estate deals. Along with Vuncannon, that included Kim Adamek, a director of acquisitions for CBRE Global Investors; Dan Moore, a managing director for Hines, Tim Wang, a senior vice president and head of investment research and strategy of Clarion Partners.

After the guest panelists received a daylong tour of the market, the panelists saw more strength than weakness, noting Pittsburgh’s rebound.

“One of the things that I fond very surprising to me having not been in Pittsburgh for 20 years was the wow factor that Pittsburgh was really changed,” said Rutherford, describing it as a Silicon Valley of the Midwest for energy. “It really is a neat place that will attract younger people. At the end of the day, that’s the most important thing.”

Wang and Moore both saw Pittsburgh as rising in prominence as an investment market, to varying degrees.

Beyond the country’s major markets of New York, Boston, Washington, D.C., Chicago and Los Angeles, Moore doesn’t see Pittsburgh in quite the same league as some of the other top cities among second tier such as Austin and Seattle yet. But expects it will be in the next 10 years.

As the discussion turned to how much values have increased in the country’s top metros, which he described as super core markets, Wang sees Pittsburgh as a second-tier market that is seeing investment interest.

“Pittsburgh is definitely on the list,” he said.

Also discussed were a host of other issues related to development, such as the region’s tax policies, the importance of education, public incentives and organized labor.

The region, as well as the state, did face some criticism.

Hearn saw the state as a whole lacking in pad-ready sites. But he also saw what he described as “remarkable” brownfield development in the region and state.

Tim Schooley covers retail, real estate, small business, hospitality, arts and entertainment, government and media. Contact him at tschooley@bizjournals.com or (412) 208-3826.

For the article online, as well as, additional articles from Tim Schooley and the Pittsburgh Business Times, please click on the following link: NAIOP panel sizes up Pittsburgh market.

Hickey & Associates, LLC Announces European Strategic Alliance

Minneapolis, MN and Berlin, Germany, November 2, 2012 – In an effort to expand its geographic coverage and reach for its “Turn-Key” suite of industry-leading site selection and incentives advisory services, Hickey & Associates (H&A) recently partnered with Terrain Consulting (Terrain) to provide an integrated seamless service platform for its multinational clients. This partnership expands H&A’s operational capacity in Europe, the Middle East, Russia and Africa.

With over 25 years of experience in global corporate site selection and public incentive advisory, H&A represents clients in a broad range of industries and regions. Jason Hickey, President of Hickey & Associates trusted that, “this Alliance will allow both organizations to better serve our clients by offering a streamlined suite of corporate services to businesses poised for global expansion.”

Terrain specializes in professional services related to foreign direct investment. Based in Berlin, Germany, Terrain assists companies from all industries to select locations for international expansion and to implement expansion, consolidation or relocation projects. Terrain’s professionals have worked with companies from numerous industries to select a location and establish operations. Andreas Dressler, Managing Director of Terrain, stated, “Europe and North America represent the largest sources of foreign investment worldwide. This alliance allows us to support companies investing in either of these critical regions.”

The new Alliance will draw on the talented group of leaders from both companies, and greatly enhance the collective effort ability of both firms to provide affordable and flexible advisory services in strategic European, Latin American and North American markets. The team of site selection and public incentive experts are based in key strategic markets throughout the Western Hemisphere and Europe to leverage local knowledge and maximize client service.

For more information, please contact Hickey & Associates toll-free at (800) 840-8850.

Hickey & Associates, LLC Announces Detroit, Michigan Office

Detroit ReleaseMinneapolis, MN and Detroit, MI, October 26, 2012 – Hickey & Associates, LLC, a global site location and public/private advisory firm based in Minneapolis, is announcing the opening of an office in Detroit to better serve their corporate clients in Michigan and the surrounding region.

With a long, proud history of manufacturing and innovation, the Detroit Metro Region has been a force behind the development of the American economy. Once again, the Motor City is poised for growth with exciting new opportunities like the U.S. Patent and Trademark Office, an Information Technology Workforce and newly renovated Class A Downtown Office Space. H&A is excited about the regional prospects as it grows to service companies coming from the U.S. and abroad.

Lisa Niscoromni will head up the Detroit office, supported by a team of site selection and public incentive experts who are based in key strategic international markets to leverage local knowledge and maximize client value-add.

“The H&A Team is truly excited about the opening of our Detroit office, which is based on the needs of our clients – both those seeking to grow in previously overlooked US markets, as well as regional businesses considering global expansions. We see this as a significant opportunity to better serve our global customers”, says Jason Hickey, President, Hickey & Associates.

With over 25 years of experience in global corporate site selection and public incentive advisory, Hickey & Associates represents clients in a broad range of industries and regions.

Hickey & Associates Detroit
243 West Congress
Suite 350
Detroit, MI 48226
(313) 432-0290


Related Documents

  1. H&A Detroit Office Announcement.pdf

H&A releases October 2012 Legislative Update

CaptureToday, H&A released their October 2012 Legislative Update. The Legislative Update, which H&A releases on a quarterly basis, provides a comprehensive review of new state laws and regulations regarding public incentives and economic development. For a copy of H&A’s October 2012 Legislative Update, please click on the following link: H&A Legislative Update – October 2012 Edition.

H&A also recently hosted a live, complimentary webinar covering the details of the October 2012 Legislative Update. To view the free webinar, please check out the video below or visit the following link: H&A October 2012 Incentive Legislation Update webinar.

H&A Leadership to be Key Participants in Major Tax Conference

H&A President Jason Hickey and General Counsel Evan Rice are set to present at the Institute for Professionals in Taxation’s (IPT) Credit & Incentives Symposium 2012 event this week. Being held in Lake Buena Vista, FL, the conference assembles a diverse collection of experts in tax and finance to discuss a number of relevant and pertinent issues.

Hickey is scheduled to headline a panel titled, “Energy Efficiency and Renewable Energy Incentives,” which will focus on the dynamic green incentives available at the federal and state level. As one of America’s foremost experts on New Market Tax Credits, Rice will be participating on a panel focused primarily on the federal program’s challenges and opportunities.

For more information on IPT’s Credit & Symposium 2012 conference, please visit the IPT’s event website.

H&A Principal Spotlighted at Global ICT-BPO Conference in Republic of Mauritius

Ann - MauritiusAnn Harts, H&A Principal, was a featured participant at the ICT-BPO International Conference 2012 in Flic en Flac, Mauritius. Organized by the Ministry of Information and Communication Technology, Republic of Mauritius, the 2nd annual conference brought together C-level executives, policy makers and other global business leaders to discuss emerging trends and future opportunities within the international ICT-BPO community. This year’s conference was also strongly supported by the United Nations Economic Commission for Africa (UNECA).

As a recognized leader in international business, especially in regards to economic development policies and strategies, Harts was honored to be invited by conference leaders as one of the event’s key participants. First, Harts participated on a panel titled, “Global ICT Strategies for building Sustainable Competitive Advantage: Key Success Factors Driving Mauritius as an ICT HUB.” Later that day, Harts moderated an enlightening panel discussing the host nation titled, “Destination Mauritius: Breaking Myths and Perceptions.” To complete the successful conference, Harts was also asked to deliver the concluding remarks.

For additional information on the conference, please visit the ICT-BPO International Conference 2012 website.

H&A Principal Ann Harts to be featured at SIG’s Fall 2012 Global Leadership Summit

Ann Harts, Principal at H&A, will be featured on a panel at the Sourcing Interest Group’s Fall 2012 Global Leadership Summit. Taking place in Scottsdale, AZ, the conference brings together senior-level executives from companies featured in the Fortune and Global 1000. The panel, which is titled, “Global Outsourcing Trends and the Role of Latin America,” participants will look forward to hearing Harts discuss the unique dynamics of doing business in Latin America and how current economic trends will shape the future of the region.

Internationally recognized for her extensive experience and knowledge in Latin America, Harts blends nearly three decades of experience in corporate real estate, economic development, site selection, and incentive advisory. She has recently completed projects in numerous Latin American countries, including Brazil, Mexico and Honduras, along with major projects in the United States and Canada.

For additional information on the conference and registration information, please visit the SIG Fall 2012 Global Leadership Summit conference website.

Economic Development Incentives for Chinese Companies 在美国投资: 选址 和 激励措施

ppt picHickey & Associates (希基公司) 是一家提供选址服务,以及帮助公司选择办公地点,获得政府和公用激励服务的全球咨询管理公司。在2012年中国成都, 希基公司带领自己的团队参与了“选择美国 — 投资美国”研讨会。 希基公司负责人, 洪文明 (Steven Hendryx),代表公司发表了演讲。 演讲内容针对中国公司的在美国选址,和美国公用经济激励政策做了详细介绍。 阅读详细演讲内容,请点以下链接。

希基公司专业于市场定位,公司选址,和帮助公司建立公共/私立合作伙伴关系。现在公司业务已经深入到南,北美洲,亚洲,欧洲和非洲。希基公司拥有最好的选址团队,在合理使用专业技术下,能够帮助各种企业在全世界寻找最好的发展,扩张地址,搬迁地址,从而使你的公司能够最好的运用当地的资源与服务。 过去的三十年,希基公司已经在选址上取得了非凡的成就,公司已经帮助其他企业经营,执行管理公用激励超过15亿美金。

投资美国:美国投资选址与政府激励措施
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