Sheffield floats LCA ticket charge proposal

Council President Mary Sheffield wants the Ilitch family to agree to a 2% ticket surcharge from the city for events in their arena district.

Driving the news: The charge is among several additional commitments Sheffield brought up in committee last week as City Council debates approving city tax abatements for the Ilitches' and Stephen Ross' Related Co.'s $1.5 billion District Detroit development proposal.

• These commitments would be on top of a community benefits deal the developers negotiated over weeks of public meetings. The developers and supporters called it unprecedented, while critics saw the deal as lacking.

The latest: City Council could vote as soon as today after a committee voted last week to move the requests to the full body without a recommendation to approve.

• The items were moved with a "neutral" mindset, Council Member Fred Durhal III said, because of lingering unanswered questions.

Flashback: Sheffield also requested commitments on top of previously agreed-upon community benefits in July for a $60 million tax break for Dan Gilbert's Hudson's site. Council approved it after Gilbert's Bedrock agreed to those additional asks.

• Sheffield also previously sought a ticket surcharge "or some type of direct revenue" for the city from Little Caesars Arena during the original deal around a decade ago, she said Thursday.

The other side: The Ilitch organization's Olympia Development declined to comment to Axios, but said it would likely address the surcharge at today's council session.

Reality check: Detroit would need a state law change to levy a new tax for entertainment venues, Eric Lupher of the Citizens Research Council of Michigan tells Axios.

• Sheffield specified this would be a "voluntary agreement the developer would enter into," not a tax change. But it could only be enforced if authorized by city voters, per a city law department statement.
• A similar precedent for a voluntary charge could be the local visitors' bureau's 2% assessment on hotels in the metro area, Lupher says.
• It's unclear how the surcharge would be passed on to event attendees.

Of note: Other additional commitments Sheffield brought up include strengthening the language and impact around what's currently a developer "target" of spending $100 million with Detroit-based and "disadvantaged" businesses.

• "If I'm going to support this project, I'd like to see stronger language regarding it," Sheffield said.
• She also supports a monetary contribution to the city's affordable housing fund.