House Panel approves $1.9 Million in Cobo Cash
Kathleen Gray, Detroit Free Press Lansing Bureau
LANSING — The House Michigan Competitiveness Committee passed a bill Wednesday that would siphon $1.9 million a year in tax revenues that are earmarked for Cobo Center and shift that money to recreation projects in northern Michigan, including a ski jump in Ironwood that hasn’t been used for that purpose since 1994.
The shift is being pushed by a group of Upper Peninsula entrepreneurs and lawmakers who are hoping the money can be used to make improvements to the Copper Peak ski jump so it can become an attraction for world-class athletes and Olympians.
“When we look at economic development as a state, we need to look at the state as a whole. This bill is a great step in the right direction that economic development is happening all across the state,” said state Rep. Lee Chatfield, R-Levering. “If the residents of my district are going to pay some of these fees, they should receive some of the benefits.”
But Democrats, Cobo Center officials, and the county executives of Wayne, Oakland and Macomb counties oppose the bill, saying that any diversion of money from Cobo’s coffers could slow the convention center’s recovery, just as the facility is beginning to operate in the black.
Patrick Bero, the Detroit Regional Convention Facility Authority’s CEO, said bondholders purchased bonds for Cobo with the understanding that they were backed by three solid revenue sources: a hotel and motel tax on rooms in Wayne, Oakland and Macomb counties, a 4% excise tax on liquor sales across the state and $15 million in cigarette taxes collected from across the state. Any diversion of this money could impact Cobo negatively, he said.
The liquor tax is looked at as the security on the Cobo debt and is ultimately returned to the counties where the tax revenue is generated, with 1% added. If there is anything left over from the three sources of revenues after the annual debt service and operating expenses are paid, that excess goes into paying off the debt early
A disruption of that formula could cause the bonds used to complete a desperately needed rehabilitation of the convention center to be downgraded and the interest rates on those bonds to rise, Bero said, adding that he’s working with the Copper Peak boosters to come up with an alternative source of funds.
But the Copper Peak backers, who want to return the facility to the glory of ski jumping that ended in 1994, said $14 million in improvements is needed at the hill to attract what they hope will be thousands of tourists and millions more watching ski jumping competitions across the globe.
The $1.9 million annual shift of funds would go into a Northern Michigan Sports Commission that hasn’t been created yet, but would award grants to recreation projects across northern Michigan. The bulk of the first year’s tax shift would go to Copper Peak.
The ski jump hill has become a popular tourist attraction for people who want to pay $20 for one of the most spectacular views in the Midwest with views of Lake Superior and the Upper Peninsula, as well as the states of Minnesota and Wisconsin. But it’s a stomach-churning journey to get to the top, including an 800-foot chair lift ride to the base of the jump, an 18-story elevator ride to the main observation deck and then an eight-story climb up a metal-grate staircase to get to the ski jump starting platform and the 360-degree view.
The bill — HB 5134 — will not get a vote in the full House of Representatives this year. And it will face a challenge next year with both Republican and Democratic elected officials in Wayne, Oakland and Macomb counties opposed to the bills and urging state lawmakers from their counties to reject the plan.
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