Detroit casino, exhibit hall proposal unveiled

Sarah Karush

Wednesday, June 2, 2004 | 8:54 a.m.

PONTIAC, Mich. -- A proposal by a private investor to build a riverfront exhibition hall with an adjacent casino is the best hope for replacing Detroit's cramped and outdated convention center, Oakland County Executive L. Brooks Patterson said Tuesday.

If the private-sector approach is not possible, other nearby counties, the state government and the auto industry should all pitch in to finance construction, Patterson said at an afternoon news conference at which he released a report on plans to replace or expand 44-year-old Cobo Center.

"For us, a new Cobo's not a priority," Patterson said, adding the county has pressing costs in the areas of roads and water and sewer infrastructure.

Patterson declined to reveal the identity of the private investor, but said he knew the man personally.

In a brief statement responding to Patterson's report, Detroit's chief development officer, Walt Watkins, said the city was awaiting the recommendations of a group formed by the Tourism Economic Development Council about expanding or building a new convention center. The council includes representatives from the city of Detroit, as well as Oakland, Wayne and Macomb counties.

Organizers of Detroit's biggest annual event, the North American International Auto Show, say Cobo needs more space. Michigan politicians fear the show could abandon the city if they don't act fast.

Detroit Mayor Kwame Kilpatrick favors building an entirely new convention center. In January he said he has a location in mind but would not reveal it for fear of a land grab.

He also did not say how he would propose paying for the project, which is expected to cost about $1 billion.

The last expansion of Cobo, in 1989, still is being paid for with a tax on hotel and motel rooms in Oakland, Macomb and Wayne counties.

If a new convention center is to be built with public money, then more parties must contribute to its financing, Patterson said. Detroit's Big Three auto companies should contribute $200 million of the $1 billion cost, auto dealers and suppliers should contribute another $125 million, the state of Michigan should give $150 million, and the city's casinos should put up $100 million, the report says.

In addition, the hotel tax should be expanded to include Washtenaw, St. Clair, Monroe and Livingston counties, the study says. Liquor taxes from all counties in the state should go toward the center, it says.

"There's enough in this report for everybody to get upset with," Patterson said. "We're going to spread the pain a little bit this time. It's not all going to be my taxpayers."

Expanding Cobo instead of building a new center would be significantly cheaper -- $465 million to expand it by 100,000 square feet and $665 million to expand it 225,000 square feet -- the report says.

Kilpatrick has said the city would be much better equipped to compete for conventions if it had a center with at least 1 million square feet of exhibition space on one floor. Cobo has about 700,000 square feet.

But Robert Daddow, who led the Oakland County team that wrote the report, said a marketing study showed that expanding Cobo to 1 million square feet would allow only five other events to consider Detroit as a venue.

Meanwhile, there is no guarantee that the auto show and Cobo's second most important event, the Society of Automotive Engineers World Congress, will remain in Detroit until a new or expanded center comes on line, Daddow said.

For new conventions to come to Detroit, the city also will need more hotel rooms within walking distance of a convention hall, Daddow said. That has not been factored into the $1 billion price tag, Patterson said.