CHICAGO -- Officials from Wayne County, Mich., and Detroit reached an agreement last week to form two authorities to build a new ballpark for the Detroit Tigers in the city and create an enterprise zone around that facility.
Mayor Coleman Young and County Executive Edward McNamara signed an agreement last Friday calling for the formation of a stadium authority and an enterprise zone authority. Each authority would have five members.
According to the agreement, the stadium authority would oversee the building and operation of the ballpark. The county executive would appoint three of authority's members, while the mayor would appoint two.
The agreement also sets up the enterprise zone authority, with the mayor controlling the appointment of three members and the country executive appointing the remaining two.
The agreement calls for the two governments to seek state legislation authorizing the enterprise zone around the stadium. A spokesman for Gov. John Engler has said the governor would consider a request of that kind.
The agreement came two days after Mayor Young an city business leaders held a press conference urgin the formation of an authority by the city, county, and state to "plan, finance, build, and manage" the stadium. It also followed the release last Thursday of a statement by the Tigers organization, supporting a city/county authority that would give the controlling vote to the county.
One public finance source said the Tiger's support for the country's control of the facility was instrumental in getting the "break through" city/county agreement on a stadium authority.
Financing of the stadium through bonds appears to have been left to the county in the agreement, which states that "upon retirement of the stadium bonds, the city shall have the right to purchase the stadium from the authority at then depreciated book value."
Officials from Wayne County and the mayor's office did not return phone calls by press time.
Wayne County officials had argued the county would have to own the facility because the 1971 state law that gave the county the ability to levy a hotel/motel tax for a sports facility required that the facility be county owned. That same law also allows the creation of an authority that would lease the stadium to the county, which in turn could lease the facility to a sports team.
Under a financing plan outlined in a request for qualifications that was sent out last month to prospective senior managing underwriters, the county would issue $150 million to $200 million of tax-exempt and taxable bonds. The 5%, 25-year tax on hotel rooms would back the tax-exempt bonds, while revenues from the baseball team would back the taxable bonds.
The public finance source said the county would adhere to Thursday's deadline to submit possible sites for the stadium as well as a basic structure of the financing to the Tigers. The source said it was not likely, however, that the county would reveal its plan on how it can issue tax-exempt bonds for the privately used stadium at that time.
The Tax Reform Act of 1986 ended the use of tax-exempt financing for sports facilities, but sources say that county officials are still pursuing the idea.
