CHICAGO -- Michigan lawmakers have introduced a bill that would create a state authority empowered to issue bonds to help build sports stadiums, including a new ballpark for the Detroit Tigers baseball team.
The bill, introduced last week, would allow a new Sports and Entertainment Economic Development Authority to issue bonds to pay for land acquisition and infrastructure improvements related to stadium projects, according to Gary Wolfram, who helped draft the bill.
Wolfram, a professor at Hillsdale College in Michigan and a former deputy treasurer under Gov. John Engler, said the bill envisions that the authority would acquire the land for a stadium and lease it to a team, which would be responsible for building the stadium.
Little Caesar pizza magnate Mike Ilitch, who bought the Detroit Tigers in 1992, wants a new stadium for the team and is willing to pay for the $175 million facility, said his spokeswoman, Susan Sherbow.
However, Ilitch wants to government to come up with the money needed for acquiring the land and making infrastructure improvements, Sherbow said. The Detroit News has reported the cost of the land and improvements in Detroit at $200 million.
The authority would have no taxing power under the bill, but could tap nontax revenues to back up to $400 million of bonds, according to Wolfram. The bill does not specify any revenue source for the bonds, he said.
However, another bill introduced last week in tandem with the authority bill would allow the use of Michigan Strategic Fund revenues to secure the bonds. Those revenues would come from video gaming profits at on-reservation Native American casinos.
In November, the governor signed compacts with seven Indian tribes, allowing them to continue their current gaming operations and requiring them to turn over a percentage of their revenue to the state and local governments, according to John Truscott, Engler's spokesman.
While Engler is opposed to using any state general fund money for stadium projects, Truscott said there has been some talk about using the $8 million a year Michigan expects to receive from on-reservation gaming operations.
Truscott said that Engler supports the stadium authority bill because it would aid other cities besides Detroit. He said officials from Lansing and Grand Rapids have expressed interest in the bill for minor league ballparks they would like to build.
The bills, which were introduced by State Rep. Morris Hood, D-Detroit, are pending before the House Oversight and Ethics Committee.
Committee chairman Frank M. Fitzgerald, R-Grand Ledge, said that he has concerns abouut the adequacy of funds to back bonds for the Detroit stadium given the fact that the bonds would not carry a state pledge.
Fitzgerald said that in testimony yesterday, state commerce director Arthur Ellis said the new authority would pick up $100 million of the $200 million cost of acquiring and preparing land for the Tigers ballpark.
The stadium authority bill has the support of both House speakers, Paul Hillegonds, R-Holland, and Curtis Hertel, D-Detroit. Truscott said there is a push to get the bill passed by the end of the year.
Wolfram said the stadium authority bill could not be used in conjunction with stadium financing legislation passed in December 1991. The law allows six counties to put before voters a local tax package to finance sports facilities or convention centers. Wayne County, where Detroit is located, was one of the six governments included in the bill.
Earlier in 1991, Mayor Coleman Young of Detroit and Wayne County Executive Edward McNamara agreed to form an authority to finance and build a new ballpark for the Tigers.
A financing plan to build a $200 million stadium put together by the county called for a combination of tax-exempt debt, backed by special county tax revenues, and taxable debt, backed by team revenues. The plan was given to Ilitch after he purchased the team, but the plan was never pursued.