Michigan Senate OKs bill allowing use of tax money to help finance new arena for Red Wings

This photo taken Thursday June 14, 2012 shows an aerial view of downtown Detroit shows parking lots behind The Fox Theatre and the State Theatre. Detroit Red Wings and Fox Theatre owner Mike Ilitch said Tuesday, Dec. 4, 2012, that he plans a $650 million multiuse development in the area that will include a new venue for the NHL club. (AP Photo/Romain Blanquart, Detroit Free Press)

LANSING, Mich. - The Michigan Senate approved legislation Wednesday to help finance a downtown Detroit project that would include a new home for the NHL's Detroit Red Wings.

Team owner Mike Ilitch this week announced plans for a $650 million multiuse development, which would include an events centre where Red Wings games could be held. He has said for years he'd like a new arena for the team, which now plays at the aging Joe Louis Arena.

The bill approved by the Senate would allow use of tax dollars collected by the city's Downtown Development Authority for the project. DDAs capture shares of local tax revenue to support development activities such as marketing and buying property.

Senate Democratic leader Gretchen Whitmer opposed the measure as a drain on funding for Detroit's public schools.

The city's DDA has been allowed for nearly two decades to pay down general obligation bonds with about $12.8 million a year that otherwise would have gone to education, she said. Now that those bonds are paid off, the bill would tap that same revenue stream for Ilitch's project instead of finally steering the money back to education.

"This is a direct subsidy by school kids to allow a billionaire to build a hockey arena," Whitmer said. "That's the Republican agenda we all know and love. ... It makes me sick. I hear my colleagues say, 'Oh, this is for Detroit and we're all in favour of Detroit now,' because one billionaire called you.'"

Senate Majority Leader Randy Richardville said the Ilitch project would be an economic boon for Detroit and Michigan, pumping more than $1.9 million into the economy and creating about 8,300 construction jobs.

The bill was approved on a 27-11 vote and returned to the House. To take effect, it must be enacted before the 2011-12 session ends this month.