22 July 2013

Business leaders: Bankruptcy won't impact major Detroit downtown projects

Story Originally Appeared in The Detroit News 

Detroit Business leaders say the city’s bankruptcy filing won’t have an impact on downtown development projects like the new home of the Detroit Red Wings, but it has already caused concern among the city’s convention clients.

Officials from the Detroit Economic Growth Corporation, Michigan Regional Chamber and others gathered for a Friday press conference to discuss bankruptcy, calling it the first step toward creating a place that’s attractive to outside investment and business.

"It's a new day for the city of Detroit," said Larry Alexander, president and CEO of the Detroit Metro Convention and Visitors Bureau.

Others aren’t as optimistic.

Alexander admitted the bureau has received "quite a few phone calls" from conventions expressing concerns over Detroit's financial troubles, but, for now, no one has backed out of bringing events to the city.

Pat O’Keefe, a financial turnaround expert with Bloomfield Hills-based O’Keefe, said the conventions’ leaders concerns are very real.

“When you’re hosting a convention for thousands you have to wonder how the city’s going to operate,” he said. “These are people who don’t really have their hand on the pulse of the city. They’re asking intelligent questions.”

Officials from some conventions slated for Cobo Center promised Friday their shows will go on.

Rod Alberts, executive director of the North American International Auto Show, said Detroit’s bankruptcy has no impact on the city’s signature car show, and called it a “good decision.”

“The 2014 NAIAS will be as sensational as ever, and we look forward to boosting the region with $350 million of annual economic impact once again,” he said in a statement.

Dearborn-based Society of Manufacturing Engineers — the largest event-producing manufacturing organization in the country — will host a manufacturing event June 9-12 in 2014 that’s expected to draw 7,000 people from around the nation despite the bankruptcy filing, said Debbie Holton, director of events.

“We feel business is going to continue in the downtown corridor,” Holton said. “We understand bankruptcy is a part of business restructuring and we hope it’s a positive sign.”

Brian Holdwick, executive vice president of business development at the DEGC, said other big projects shouldn’t be impacted by the bankruptcy filing.

But the Red Wings arena project may come before the bankruptcy judge because some of the development is slated to be built on city-owned land. In theory, the judge may have to approve the land so it can be used for the project.

The Downtown Development Authority, a regional entity that uses taxes to fund major projects, is listed as one of Detroit’s major creditors and is owed about $34 million, which Holdwick said came from old debts related to the People Mover and Cobo.

Chamber President and CEO Sandy Baruah called bankruptcy a tool to moving forward.

"We are now solving the problem,” he said.

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