Ilitches won’t renew lease with Joe Louis Arena

[viking58 0]

Per Crains Detroit:

Ilitches won’t renew lease with Joe Louis Arena

By Bill Shea

The owners of the Detroit Red Wings today told the city of Detroit that they won’t renew their lease with Joe Louis Arena, which allows Cobo Arena to return to city control and will pave the way for expansion of Cobo Center.

However, the statement from Olympia Entertainment does not indicate Mike and Marian Ilitch will build a new arena.

Instead, they indicated that not renewing will allow them to pursue a new lease at Joe Louis.

They said they chose not to extend the current lease, which they were required to tell the city by Tuesday either way, to help the city resolve the Cobo situation and retain the North American International Auto Show, which could have left the city without an expanded Cobo.

The statement from Ilitch-owned Olympia, which manages city-owned Joe Louis and Cobo Arena:

“Olympia Entertainment today informed the City of Detroit via personal phone call and hand-delivered letter that, pursuant to the terms of its current lease, Olympia Entertainment will not exercise its option to extend the current lease on the Joe Louis and Cobo Arenas for an additional 20 years. The current lease, which covers both arenas, expires on June 30, 2010, and automatically renews for 20 years if Olympia Entertainment did not notify the City of its decision on the option by June 30, 2009. Olympia’s decision to not extend the current lease returns Cobo Arena to the City of Detroit and should assist officials in their efforts to keep the North American International Auto Show in Detroit. This action also allows Olympia Entertainment and the City of Detroit to continue work on a new lease specifically for Joe Louis Arena.â€

© 2009 Crain Communications Inc.

[Gizmo 21]

Wow... Color me shocked! The lease they're walking away from was deemed the most lucrative in pro-sports.

[rdwngnut 0]

Wow... Color me shocked! The lease they're walking away from was deemed the most lucrative in pro-sports.

Here is the full press release. I just got this in an email....

Dear Detroit Red Wings Season Ticket Holder,

As a valued customer, we wanted to update you on the status of our lease on the Joe Louis and Cobo Arenas. You may see some information on this topic publicized in the media in the coming days, so we have attached a copy of Olympia Entertainment’s press release to ensure you have the full details.

Importantly, the Red Wings will play their upcoming 2009-10 season at the Joe.

The Detroit Red Wings appreciate your business, and we are pleased to bring this update to you. Best wishes for an enjoyable summer and we look forward to seeing you at the Joe this fall for some more great Red Wings hockey action.

Sincerely,

Steve Violetta

Senior Vice President for Business Affairs

Detroit Red Wings

--------------------------------------------------------------------------------

FOR RELEASE: 10 a.m., Friday, June 26, 2009

Olympia Entertainment and City of Detroit Working to

Develop New Lease for Joe Louis Arena

Olympia Entertainment returns Cobo Arena to City of Detroit,

which should assist officials in their efforts to keep Auto Show in Detroit

DETROIT – Olympia Entertainment today informed the City of Detroit via personal phone call and hand-delivered letter that, pursuant to the terms of its current lease, Olympia Entertainment will not exercise its option to extend the current lease on the Joe Louis and Cobo Arenas for an additional 20 years. The current lease, which covers both arenas, expires on June 30, 2010, and automatically renews for 20 years if Olympia Entertainment did not notify the City of its decision on the option by June 30, 2009. Olympia’s decision to not extend the current lease returns Cobo Arena to the City of Detroit and should assist officials in their efforts to keep the North American International Auto Show in Detroit. This action also allows Olympia Entertainment and the City of Detroit to continue work on a new lease specifically for Joe Louis Arena.

“The existing lease was crafted more than three decades ago by individuals no longer associated with either Olympia Entertainment or the City,†said Christopher Ilitch, president and CEO of Ilitch Holdings, Inc. “It does not fully contemplate one: the evolution of the sports and entertainment industry; two: the current economic environment in which both the City and Olympia Entertainment are operating and; three: the infrastructure replacement and repair needs of a 30-year-old building in order to meet the competitive industry standards of today.

“Furthermore, we have been and continue to be very supportive of keeping the Auto Show in Detroit and this is one way we think our organization can help meet that objective. We believe that any economic benefit to Olympia Entertainment by continuing to operate Cobo Arena in the future is outweighed by the potential that a positive resolution on the Cobo issue will have for the region and state.

“Due to these very important factors, we have been working constructively with the City over the course of the past year on a new lease specifically for Joe Louis Arena. To date, an agreement has not been finalized and today’s action is simply a necessary step in the process as we continue to work together to develop a new lease.

“Detroit is our hometown and we have a strong desire to stay here. We remain confident that we can reach a satisfactory agreement that should not only enhance the sporting and entertainment experience for patrons of the facility, but will lead to additional economic benefit for the region and the potential for additional job creation as the facility attracts more events and performances.â€

About Joe Louis Arena

Joe Louis Arena was built by the City of Detroit and opened in 1979. Michael and Marian Ilitch purchased the Detroit Red Wings and the company currently known as Olympia Entertainment in 1982. Olympia Entertainment leases Joe Louis Arena from the City of Detroit, which owns the building. Joe Louis Arena is currently the fourth oldest arena in the NHL. It is home to the 11-time Stanley Cup Champion Detroit Red Wings and host to major artists and performers for concerts and other entertainment events. The Detroit Red Wings will play the 2009-2010 season at Joe Louis Arena.

About Cobo Arena

Cobo Arena opened in 1960 and has a seating capacity of 12,000. It has a storied history of hosting memorable sporting, concert and entertainment events, including being the home of the Detroit Pistons from 1961 - 1978. In addition, it is widely recognized as having some of the best acoustics in the industry and many notable artists like Bob Seger, Ted Nugent, and Madonna have recorded live concert albums at Cobo Arena. Olympia Entertainment has leased Cobo Arena from the City of Detroit, which owns the building, since 1982. For nearly three decades, it has been successful and an important part of Olympia Entertainment’s venue mix, rounding out its spectrum of venues ranging from 300 – 40,000 seats.

[StevieY9802 6]

They need a new arena badly. There is no shock from me that they opted out. They could still renovate it and stay there but I dunno. That places needs a lot of upgrades to get close to the newer buildings.

[JayUp88 1]

Maybe if they stay at the Joe the new lease will help out Detroit more then it will Ilitche. Ilitche has always seemed to be in for the best of Detroit.

[Gizmo 21]

Maybe if they stay at the Joe the new lease will help out Detroit more then it will Ilitche. Ilitche has always seemed to be in for the best of Detroit.

I'm guessing that there's some major unseen backscratching going on here. Oly helps the city with its Cobo problem by not renewing the lease, but I'm guessing that Oly's going to get a yet unannounced major "consideration" regarding a remodeled JLA or something that's about to be put on a plot of land over in the Fox/Ford/Comerica "entertainment district".

Edited June 26, 2009 by Gizmo

[ScubaV 1]

My guess is that they want to get a short-term lease until the economy recovers and then start on a new arena with taxpayers' help.

[Dimaline312000 51]

I was hoping for a new arena but whatever is best.

Ps. I have some viruses on my computer so if I'm not on for a while don't be suprised.

[wheelchairwing 11]

Man, the topic of this thread was getting me all excited. Here I thought that this meant that The Joe was a goner and that we would see a new arena within a relatively short period of time. Trying to get a new lease agreement simply tells me that we will probably still be using it for another five to 10 years. UGH! The one positive that I am taking from this story is that AT LEAST we will not be in the Joe for another 20 years. I don't care what type of retrofitting or renovations they would be willing to make every structure has its limitations. In order to "fix" the arena's shortcomings that I see, (inaccessible bathrooms, not entirely disability friendly seating, etc.) it will cost some money and take an extended period of time. Considering the fact that the majority of disabled people are certainly not making money hand over fist (giving them the opportunity to become "regular customers") I can see why there is a hesitancy to renovate some things for this purpose. Even though in my opinion such an attitude is wrong, and regardless of the fact that it is against the law to not accommodate people with disabilities as a result of the ADA (a law that has its problems as well), it is human nature, and especially in today's world, everything is centered around cost. It is very sad to me.

The fact is, I wouldn't be the least bit excited until I hear that our owner is 100% committed to a new building. Still, (and I know this sounds mean) I would not be surprised if we do not get a new arena until he dies or ownership changes in a significant way. This sounds ludicrous, for sure, but I just don't see a new arena happening anytime soon.