(Source: MIRS.news, Publsihed 11/23/2022) The NCAA announced this week the Men’s Final Four basketball tournament will return to Ford Field in Detroit in 2027, the first time the city will experience it since 2009 when Michigan State University spectacularly lost to North Carolina in the championship game.
The tournament is projected to bring upwards of $200 million of revenue into the state, said Christopher Moyer, senior director of communications at Visit Detroit, which promotes MetroDetroit regionally, nationally and internationally as a tourist hot spot and business and convention destination.
The Final Four contract was awarded to the Detroit Sports Commission, a subsidiary of Visit Detroit, after a 12-month “long, arduous process” spent responding to a 200-page Request for Proposal, which culminated in the final, successful pitch on Oct. 31, said Dave Beachnau, senior vice president, on this morning’s “Michigan’s Big Show starring Michael Patrick Shiels.”
But, while big events bring in big money for the host city, big money needs to be spent upfront to win and successfully host large-scale events.
“One of our biggest challenges is funding,” Beachnau said.
In order to compete with states like Texas, that have the “Cadillac of (event funding) programs,” he said, certain assurances need to be made to organizations such as the NCAA and NFL.
In their successful bid, one of the items the DSC promised the NCAA selection committee was that downtown Detroit would have the required 6,000 hotel rooms available when the tournament comes around.
“We’re just shy of that right now,” Beachnau said. “But what we pitched to them is we have current hotel development in the pipeline, so we expect to have another 800 rooms open by 2027.”
These types of infrastructure investments and other ancillary costs, such as transportation, comped hotel rooms and reserved spaces for related events, are common and paid for by the host.
The monies for these expenditures comes from donations by large Southeast Michigan international corporations and philanthropists, Beachnau said.
“We can only go back to our well (of donors) so often to fundraise to pay for the expenses that these events require,” he said.
And that’s why the DSC plans to reintroduce a new and improved piece of legislation with its partners in the upcoming state legislative session.
"We’re currently working on large special events fund legislation that we hope to get passed here in 2023,” Beachnau said.
Now is the perfect time to reintroduce the revised legislation, with the $6 billion budget surplus, bipartisan support and the backing of the Michigan Economic Development Corporation, Moyer said.
The proposed fund would “level the playing field” with states like Texas and allow for cities and counties across the state to be competitive on a national stage – and it's not just for sports.
“I do want to be very clear as we look at the Final Four coming into town,” Moyer said. “That would be an event that could draw money from this large special events fund, but it’s not just sporting events.
“You could be talking about conferences and large meetings and other events that a city or county could go try to attract,” he said.
Any event where most of the attendees are people from out of state “who are spending their non-Michigan dollars here in Michigan,” would qualify to apply for a grant through the fund, Moyer said.
“For instance, a Detroit Tigers game wouldn’t ever qualify for this because that’s Metro Detroiters coming in,” he said. “The preponderance of the people coming in would be local.”
However, the national horse show in Traverse City, which brings in thousands of national and international horse aficionados every year, is the perfect example of a qualifying event, Moyer said. And the host organization, Traverse City Horse Shows, did qualify for seed funding in 2015 through a comparable special events fund created by the MEDC in 2013.
But the MEDC fund was only in place for two and a half years, and the total investment for all grants was capped at $2.5 million.
This time around, the request is for a one-time $10 million infusion to “seed” the fund.
"With the Final Four Tourney alone bringing $200 million into the state, you've got to think this one-time seed money is a drop in the bucket," Moyer said. “Particularly when that's just one of the events that could benefit from this legislation.”
The initial investment by the state would also be the last.
From there on forward, the fund would self-sustain through Tax Increment Financing where half of the tax revenue would go to the State Treasury and the other half would go into the fund, Beachnau said. (TIF financing is where the local entity pays for expenses up front but recoups the funds later through tax revenues generated by the event.)
Similar legislation has been introduced in the past, most recently in 2018 through Senate Bill 1065, which was sponsored by Sen. Ken Horn (R-Frankenmuth). However, the bill did not receive a hearing.
As Moyer understood it, prior efforts got caught up in transitions between administrations and legislative sessions and didn’t make it through budget negotiations.
He said each large-scale event brought to the state would deposit substantial sums of money into local communities as well as have the potential to create tens of thousands of jobs, so a single, never-to-repeat legislative investment would engender a long-term, self-sustaining, shot-in-the-arm to the economic engine that powers Michigan.
“We know this is going to be beneficial for Detroit,” he said. “But Detroit is the gateway to the whole state and when Detroit does well, the state does well.
“We want every community in the Upper Peninsula to the Lower Peninsula to be thriving,” Moyer said.
