Joe Louis Arena To Be Demolished

The city of Detroit, with financial help from the state, is expected to demolish Joe Louis Arena, the home to hockey’s Detroit Red Wings, and hand the location over to a developer.

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.”