The WNBA Deal: Detroiters Deserve Better
Economic Beat
Last month, city council approved nearly $50 million in tax breaks to support development of the newly organized Detroit WNBA team alongside a youth sports development center. This development is planned for the former Uniroyal site. The development team is led by Tom Gores, billionaire owner of the Pistons. (1). Elected officials and Gores’ development team have once again promised that, in exchange for this public investment, the project will deliver jobs, opportunity, and economic growth for Detroit. Yet a closer look at the lease agreement reveals a familiar and troubling pattern: public land and public resources are being leveraged to protect and maximize private profit—with no clear guarantee that Detroit residents will see any meaningful benefits.
The biggest problem is that the city is essentially giving away the land for free. The city transferred more than 40 acres of publicly owned riverfront property to the Detroit Brownfield Redevelopment Authority (DBRA) for $1. DBRA will then lease the land to W-Detroit Property LLC for $0. This lease runs for an initial 49 years, with extensions that could include control of the site to 85 years. The land has been declared of little value because of years of heavy industrial contamination and therefore the land give away of prime waterfront property is justified.
Under the terms of the lease, rent only becomes possible if the developer builds an additional development, gets tax incentives for that new development, and the tax incentives exceed the predevelopment costs plus interest. This is especially troubling because land is one of the few assets the city still owns. Public land can be used to generate long-term revenue for services, support affordable housing, or be placed under community control through land trusts. Instead, this deal locks up prime riverfront land for decades while offering no guaranteed return to Detroit residents who have made the $50 million public investment.
The narrative about the WNBA project also heavily centers a nonprofit “youth development” project. While youth sports and recreation are important, the nonprofit entity promised in the deal does not yet exist. Further, there are no enforceable guarantees that the youth center must be developed. The lease only stipulates that they must begin rent payment beginning in year 50 of the lease if the center is not developed. Presently, District 7 residents are waiting for the Pistons organization to begin construction of the Rouge Park Community Development Center promised in 2022. Meanwhile, the WNBA lease explicitly allows for future commercial and retail development opening the door for profitdriven expansion later on with or without the youth recreation center.
Detroiters have seen this story before. Major economic development projects funded with tax payor dollars are pitched as once-ina-generation opportunities by our elected officials. But often the reality is that public authorities offer incentives, absorb risk, and fast-track approvals. Developers are made first. Benefits to residents are indirect, meager and often unenforceable.
Calling for better deals also means demanding more transparency and greater developer accountability. It is about demanding that our elected officials negotiate development deals that bring benefits and prioritize the real needs of a majority-Black, working-class city that has already lost too much land, wealth, and political power. Equitable development is rooted in principles and practices that include equitable return on public investment such as fair rent or sale value for real estate and land transactions; options for the city to receive revenue sharing generated by the project when applicable; family sustaining jobs and wages; and real neighborhood community benefit agreements. The WNBA deal fails to deliver on any of these requirements. The bigger question is WHY?
Let’s use the lessons learned from the WNBA deal as an opportunity to pivot into a new way of doing business. A new era of Mayoral leadership can present that opportunity.
Sources: https://www.bridgedetroit.com/detroit-city-council-taxbreaks-wnba-dcfc/