This is of concern, per the Detroit News’s Louis Aguilar…
The new owners of the land occupied by Joe Louis Arena filed a lawsuit against the City of Detroit on Monday, requesting a two-year extension on what to develop on the riverfront site.
The lawsuit was filed in U.S Bankruptcy Court by Gotham Motown Recovery, the company created by Financial Guaranty Insurance Company (FGIC), which owns the rights to develop the site. FGIC was a creditor in Detroit’s bankruptcy and the company was given the arena site and parking garage as part of the settlement deal.
Under the current agreement, the city has 90 days to tear down the arena once it is vacated.
But the firm says the city is sending too many mixed signals of what it wants developed there. The city hasn’t responded to the filing, and did not immediately respond for comment.
FGIC CEO Tim Travers, on behalf of Gotham, said in a written statement Monday, “We are concerned that the city’s actions may hinder and delay a successful development on the Joe Louis Arena site, which is our objective.”
And the Free Press’s J.C. Reindl:
Derek Donnelly, senior managing director for Financial Guaranty, told the Free Press that he didn’t know why city officials would not grant the extra time.
“We had what we thought was a cooperative, productive relationship with the city,” Donnelly said in a phone interview. “Then all of the sudden something changed, and we’re not sure what it is. We are very frustrated.”
Financial Guaranty accepted future ownership and development rights to the Joe Louis Arena property in exchange for swallowing big losses during Detroit’s 2013-14 municipal bankruptcy. It ultimately got roughly 13 cents on the dollar for its $1.1-billion claim against the city.
It wasn’t immediately clear Monday afternoon why Detroit officials won’t grant the requested time extension.
The city’s top lawyer, Lawrence Garcia, said Monday in a statement that “the city believes this suit has no merit and will respond appropriately to the complaint in court.”