Sept 17 Wed Sep 17, 2014 3:41pm EDT
Sept 17 (Reuters) - The Michigan Strategic Fund board gave final approval on Wednesday for the sale of up to $450 million of 30-year revenue bonds for a downtown Detroit arena that will be home to the National Hockey League's Detroit Red Wings.
The financing plan calls for $250 million of tax-exempt bonds back by increases in tax collections on real estate and personal property from the development. The bonds will be priced through underwriter Merrill Lynch. Another $200 million of taxable bonds backed by arena concession fee payments will be privately placed with Comerica Bank.
The Detroit Downtown Development Authority, which will own the arena, approved the financing plan on Tuesday.
The authority has been working more than a year on a "new multipurpose events center" of at least 650,000 square feet that will have 18,000 seats and retail space. It expects it to open in 2017.
A U.S. bankruptcy judge is evaluating Detroit's plan for restructuring its debts and exiting the largest municipal bankruptcy in U.S. history. With the plan seen as likely to win his approval soon, city leaders are talking about a revitalized future for the city of less blight and more economic development.
In a briefing memo, Mark Morante, senior advisor at the Michigan Economic Development Corporation, described the arena as an "innovative facility that will act as a powerful generator of economic activity and be a good urban neighbor."
He added that private parties will develop the area around the arena, making an "aggregate capital investment of at least $200,000,000 in projects."
That development will occur concurrently with the arena work "to more rapidly generate jobs, positive economic impact and transformation of the district," Morante wrote. (Reporting by Lisa Lambert in Detroit and Karen Pierog in Chicago; Editing by James Dalgleish)
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