Olympia Development of Michigan to Pay Off and Privately Refinance $200 Million Series B Public Arena Financing Bonds
Payoff of Series B public bonds strengthens Detroit Downtown Development Authority (DDA) balance sheet, poises DDA to drive additional economic development in Detroit
Ability to privately refinance Series B bonds at a more favorable rate demonstrates financial markets’ confidence in city and The District Detroit
Successful redemption of Series B bonds 28 years early another example of The District Detroit exceeding expectations
DETROIT – Olympia Development of Michigan announced today that it will pay off and privately refinance the $200 million in Series B public bonds that have supported the development of Little Caesars Arena. The payoff, occurring 28 years ahead of schedule, strengthens the Detroit Downtown Development Authority’s balance sheet and financial statements, positioning the organization to drive additional economic development in Detroit.
The $200 million in Series B Bonds were originally issued by the Michigan Strategic Fund with a 30-year maturity to be retired through annual payments by the Ilitch organization. These bonds provided financing for the innovative, new Little Caesars Arena at a time when financial markets lacked confidence in Detroit. The city’s recent success, fueled by the accelerated investment in retail, office and residential developments in The District Detroit, has set the course for more favorable financing options.
Payoff and Private Refinance of Series B Public Bonds Reflects Market Confidence, Positions DDA and The District Detroit to Drive More Economic Development
“Five years ago, our city was in bankruptcy, and catalytic investment was difficult to come by,” said Glen W. Long, Jr., CFO and interim president and CEO, Detroit Economic Growth Corporation. “With the payoff of the Series B bonds, in addition to having a vibrant Little Caesars Arena and thriving District Detroit, our city experiences a major win. Eliminating the bond debt gives the DDA an opportunity to drive even greater economic development in Detroit.”
“Detroit’s well-documented comeback is being recognized by third-party financial entities, which will drive even more investment in the city, region and state,” said Christopher Ilitch, President and CEO of Ilitch Holdings, Inc. “For our organization, savings realized from the retirement and private refinancing of these bonds at a lower rate will contribute to our expanding vision for The District Detroit.”
The District Detroit Continues to Exceed Expectations for Pace of Development and Local Economic Impact
Beyond the retirement and private refinancing of the Series B public bonds, The District Detroit continues to exceed expectations for pace of development and economic impact. Originally expected to be a $650 million development, Little Caesars Arena and The District Detroit have grown to a current projection of $1.2 billion dollars of sports and entertainment, retail, residential and office space. This transformational investment has already resulted in new restaurants, community space and the innovative new Little Caesars Arena, energizing the underutilized area between Detroit’s bustling Midtown and Downtown neighborhoods.
Beyond Little Caesars Arena, additional development underway well ahead of original expectations includes the $150 million Little Caesars world headquarters expansion, the new $50 million Wayne State University Mike Ilitch School of Business, as well as new public spaces, enhanced parking options and infrastructure needed to support new development. The District Detroit has also announced nearly 700 new affordable and market-rate residential units, including development of two new structures and redevelopment of four historic buildings. Additional plans include new retail shops and restaurants, as well as new office tenants expected to be announced in the coming months.
Throughout construction, Olympia Development continues its intense focus on ensuring a Michigan Made, Detroit Built project. To date, more than 600,000 hours have been worked by Detroiters on projects in The District Detroit, with construction sites also hosting more than 800 apprentices. More than $475 million (60 percent) of contracts have been awarded to Detroit companies. And more than $700 million (94 percent) of contracts have gone to Michigan firms. Beyond construction, three thousand people have been hired for jobs at Little Caesars Arena, and more than 60 percent of them are Detroiters.
About The District Detroit
The District Detroit is one of the largest sports and entertainment developments in the country. Located in the heart of Detroit, this 50-block, mixed-use development led by the Ilitch organization unites eight world-class theaters, five neighborhoods and three professional sports venues in one vibrant, walkable destination for people who want to live, work and play in an exciting urban environment. Home to the Detroit Tigers, Detroit Red Wings, Detroit Pistons and Detroit Lions - The District Detroit represents the greatest density of professional sports teams in one downtown core in the country. Current data from the University of Michigan demonstrates that The District Detroit will account for an economic impact of more than $2 billion by 2020 and create more than 20,000 construction and construction-related jobs and 3,000 permanent jobs.