CHICAGO -- Wayne County, Mich., officials are putting together a new and expanded package of potential taxes that would be used to back bonds for a new stadium for the Detroit Tigers baseball team, a spokeswoman for the county executive's office said yesterday.
That county-wide package would include a 1% tax on hotel-motel rooms that is estimated to generate $1.5 million a year and a 1% tax on restaurant meals that would raise $11 million to $14 million a year, according to Irma Clark, the county spokeswoman. A possible third revenue source -- a 3% surchage on rental cars in the county -- has not yet been ironed out, she explained.
Ms. Clark said County Executive Edward McNamara would go to Lansing this week to lobby state legislators for the taxes, which would need enabling legislation from the state government to appear on the March 1992 ballot. Under the Headlee Amendment to the state constitution, all new local taxes require voter approval.
One political observer said getting the legislation passed could prove difficult. "This is very much an anti-tax administration," the observer said, referring to Gov. John Engler's position against raising taxes.
Rusty Hills, a spokesman for the governor, said the governor wants to see the plan and examine its "pros and cons" before he makes a determination.
County officials originally linked a 1971 state law, which gave the county the ability to levy a 5%, 25-year hotel-motel tax for a sports stadium that was never built, to the financing of the Tiger stadium project. The 5% tax was met with objections by the local hotel industry, which claimed it was too high. County officials subsequently lowered the hotel tax to 1% and added the restaurant tax -- a move, which on Monday, gained the support of the Detroit area's convention and hotel industry groups.
Yesterday, some local restaurateurs came out in favor of the meals tax as long as the stadium is built in Detroit, Ms. Clark said.
The Michigan Restaurant Association, which has several hundred members in the Detroit area, however, is opposing the tax. Michael Newman, the group's president, said it was "not an equitable way to fund the stadium."
Local news reports stated that Mr. McNamara was using business support of the taxes to turn the heat up on the Tigers Organization, which last week rejected both of the stadium sites presented to the team in a joint Wayne County-Detroit proposal last August.
Dan Ewald, a spokesman for the Tigers, said yesterday that the two Detroit sites did not meet the team's criteria, such as parking and public transportation needs, and that negotiations with the city and county had ceased. He added that the Tigers were open to "everything in southeast Michigan," including Detroit, in terms of a possible site, along with "primarily public financing" of a stadium.
Ms. Clark said that despite the Tigers' current position, the county would continue to put together a financing package for the stadium. A spokesman for Detroit Mayor Coleman Young did not return phone calls.
In a request for qualifications that was sent to potential senior managing underwriters in June, the county outlined a plan to issue $150 million to $200 million of tax-exempt bonds backed by county revenues and taxable bonds backed by team revenues.
The Tiger Stadium Fan Club, which is against building a new stadium, contends, however, that the new stadium authority the city and county plan to form would not be permitted to issue tax-exempt debt for the project in light of the Tax Reform Act of 1986, which ended tax-exempt financing for sports facilities. At one point county officials had mentioned the possibility of going to Congress for a so-called rifle-shot or exemption from the law. Subsequent stadium financing documents, however, have not addressed the issue.
Brian Tremain, a member of the group's executive committee, contended yesterday that if forced to issue taxable debt, the revenues identified by the county so far, would fall short of annual debt service payments, requiring Wayne County and Detroit to pledge their general oglibation on the bonds. He estimated that a 25-year, $225 million taxable issue with an interest rate of 10% would need $24.5 million a year in debt service, while the two taxes identified by the county would only raise about $15 million.
The fan club is also spearheading a petition drive to force a March vote on using public money for the stadium and changing the current lease the team has with Detroit. That lease runs until 2008.
