Detroit gives arena land to creditor in bankruptcy

Staff Writer
Columbus CEO

DETROIT (AP) — The city of Detroit, with financial help from the state, plans to demolish the home of the Detroit Red Wings and give the land to a creditor for development as part of a major settlement in the city's bankruptcy case, lawyers said Thursday.

The deal was disclosed in court where Judge Steven Rhodes has been holding a trial to determine if Detroit's plan to get out of bankruptcy is fair and feasible for the long run.

A bond insurer with a $1 billion claim, Financial Guaranty Insurance, was one of the last critics still standing after months of settlements between Detroit and other creditors. But the land deal now puts FGIC, as it is known, on the sidelines and moves the trial closer to completion.

The Red Wings of the National Hockey League play in city-owned Joe Louis Arena along the Detroit River, but already are planning to move to a new home a few miles away. The arena and a parking garage would be demolished, giving Financial Guaranty nearly nine acres for a hotel, condominiums, office space or retail development.

The state of Michigan has agreed to provide $6 million for demolition, which likely would start in 2017. The land is considered to be a valuable parcel because it's near Cobo Center, Detroit's downtown convention hall.

It's a "turning moment for this area of Detroit," said Corrine Ball, a lawyer for the city who gave details in court.

Financial Guaranty attorney Alfredo Perez said it's a "win-win" for the bond insurer and Detroit.


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