Joe Louis Arena To Be Demolished

The demolition is part of a bankruptcy settlement between Detroit and its creditors. It was the largest bankruptcy filing by a city in U.S. history.  Detroit is shedding $7 million of debt, cutting pensions of thousands of retirees by 4.5 percent and ending city-paid health insurance for retirees.

The city and its creditors have been settling their claims for months but there is one holdout, Financial Guaranty Insurance, that has a $1 billion claim with the city. The land deal puts FGIC on the sidelines and moves the BK trial closer to completion.

The Red Wings are already planning on moving to a new home a few miles away from the city-owned Joe Louis Arena. Demolishing the arena and its parking garage would provide FGIC with nine acres for a hotel, condominiums, office space or retail development.

The state of Michigan has agreed to provide $6 million for demolition, which would likely start in 2017. It’s considered valuable real estate because it is close to Detroit’s convention hall, Cobo Center.

A lawyer for the city called the agreement a “turning moment for this area of Detroit.”