Thursday, January 12, 2012

Pontiac Leads the Way to Show How Not to Fund Football Stadiums

The City, Not the Car – the Car is Gone

Pontiac, Michigan is north of Detroit.  In the 1970’s it was a typical blue collar auto manufacturing place, like many others in the industrial Midwest.  Also in the 1970’s Pontiac had an idea.  It would build a domed football stadium for the Detroit Lions of the NFL, who would relocate to the city.  It did and they did.

What Pontiac didn’t realize is that while all business exhibits characteristics of greed, and in fact are supposed to, (see Romney, Mitt and Capial, Bain) NFL owners are the epitome of greed.  So when the opportunity came for the Lions to move back to Detroit and leave Pontiac with an empty domed stadium (apparently no one in Pontiac understood that a football stadium is a single use facility), they did just that. 

Now Pontiac has a domed stadium, and a weak economy and nothing to show for their efforts.  In facts, it looks like the city made a monumental blunder after the Lions left.

So for several years the city tried to sell the Silverdome. In 2008, it rejected as inadequate an $18 million offer from United Assurance Co. to redevelop the site as an entertainment complex. The city decided to auction off the stadium in October 2009, amid a slumping real-estate market.

So what happened, how much better did the city do than the $18 million it turned down.

With no minimum set, the winning bid came from Toronto property developer Andreas Apostolopoulos at a mere $583,000. The dome was built for $55.7 million in 1975.

Wow, what a brilliant move.  Anybody want to guess what happened next?  Yes Pontiac essentially became bankrupt.  There is no report on what happened to those city leaders that turned down the $18 million.  Anybody want to bêt that they didn’t retire with one of those nice government pensions?  Anybody?

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