Olympia Entertainment, parent company of the Detroit Red Wings, has declined its option to renew the lease on Joe Louis Arena. The lease expires on June 30, 2010, and would have to have been renewed one year in advance.
The move is tied into plans to expand adjacent Cobo Hall by annexing Cobo Arena. Part of the Joe Louis Arena lease gives Olympia Entertainment control of Cobo Arena. By not renewing that lease Cobo Arena will return to the City of Detroit, making it available for Cobo Hall expansion plans.
“The existing lease was crafted more than three decades ago by individuals no longer associated with either Olympia Entertainment or the City,” said Christopher Ilitch, president and CEO of Ilitch Holdings, Inc. “It does not fully contemplate one: the evolution of the sports and entertainment industry; two: the current economic environment in which both the City and Olympia Entertainment are operating and; three: the infrastructure replacement and repair needs of a 30-year-old building in order to meet the competitive industry standards of today.
“Furthermore, we have been and continue to be very supportive of keeping the Auto Show in Detroit and this is one way we think our organization can help meet that objective. We believe that any economic benefit to Olympia Entertainment by continuing to operate Cobo Arena in the future is outweighed by the potential that a positive resolution on the Cobo issue will have for the region and state.
“Due to these very important factors, we have been working constructively with the City over the course of the past year on a new lease specifically for Joe Louis Arena. To date, an agreement has not been finalized and today’s action is simply a necessary step in the process as we continue to work together to develop a new lease.
“Detroit is our hometown and we have a strong desire to stay here. We remain confident that we can reach a satisfactory agreement that should not only enhance the sporting and entertainment experience for patrons of the facility, but will lead to additional economic benefit for the region and the potential for additional job creation as the facility attracts more events and performances.”
It has long been rumored that Olympia Entertainment would essentially trade Cobo Arena to the City of Detroit in return for some form of help in building a new home for the Red Wings or renovating Joe Louis Arena.