Ilitch project moves forward in state House as tax questions arise

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0x600The state House approved legislation Thursday that could allow a tax break to help build the $650-million proposed Red Wings arena and entertainment district that the Ilitch organization hopes to build in downtown Detroit, even as questions emerged about at least $2 million in unpaid property taxes that the Ilitches’ Olympia Entertainment may owe the city.

During House deliberations, an opponent of the arena challenged the tax break, alleging that the Ilitch entertainment empire owed $1 million to the city. Records checked by the Free Press, first reported on freep.com , indicated that the organization owes more than $2 million in unpaid property taxes, penalties and interest on Joe Louis Arena and Cobo Arena, dating to 2006.

The Ilitch organization released a statement late Thursday saying the city’s tax bills are erroneous, adding that the company is proud of being a responsible corporate citizen.

“Upon further examination, it is our organization’s belief that the taxes in question have been accrued to Olympia Entertainment in what appears to be an error.

“Olympia Entertainment has not received any notices about the taxes in question. The City of Detroit is the property owner of Joe Louis Arena and Cobo Arena and is the taxable entity. Olympia Entertainment is incorrectly listed as the property owner of record on the tax rolls, and our organization will be in touch with the Assessment Division within the City of Detroit’s Finance Department to have the property owner of record corrected on the tax rolls,” the statement read

State law says property normally exempt from property taxes — in this case, the city owns the property — is taxable to the lessee when it is leased for for-profit purposes. There are exceptions under the law, but it was not clear late Thursday whether Joe Louis Arena falls under those exceptions.

Check out the rest of this article in the Detroit Free Press

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