The Detroit Regional Convention Facility Authority announced that on Feb. 3 it defeased more than $25 million of its outstanding debt, which is expected save Michigan’s taxpayers more than $17 million over the life of the bonds. Since its inception in 2009, the authority has saved Michigan taxpayers an estimated $108.6 million through management of financial resources.
Operational control of TCF Center was transferred to the authority in 2009 under a collaborative agreement among the Michigan State Legislature, the city of Detroit, and Wayne, Oakland, and Macomb counties. Each of these entities has an appointed member on the authority board, as well as Larry Alexander, chairman, who is the appointee of the governor.
The authority is reporting strong financial progress for the TCF Center in downtown Detroit with a focus toward becoming a self-sustaining facility by 2024.
“With more than a decade of remarkable success for the DRCFA, we are driven to work with our partners for growth in tourism revenues, tax dollars, and jobs for our region,” says Alexander. “The interest in our city and TCF Center is unprecedented and positions us well on the national and international stage, projecting continuous growth and a valuable return to our state taxpayers.”
Over the past four years, the Convention Facility Development Fund has generated excess funds that are dedicated to the early retirement of debt according to the terms of the authority’s enabling legislation. During this time, the authority has used excess fund proceeds to retire more than $79 million in outstanding bond principal, saving the state’s taxpayers more than $56 million. Combined with an estimated $30 million saved by the financing structure employed for the renovation of the TCF Center and $22 million saved from the defeasance of the 2003 bonds that were inherited from the city of Detroit, the authority saved the state’s taxpayers an estimated $108.6 million, or 38.5 percent of the $282.3 million the authority has received since its inception.
“We are extremely pleased with the progress being made toward paying down the bonds and the significant benefit it brings to the state taxpayers,” says Patrick Bero, CEO and CFO of the authority. “Our goal has always been to save Michigan taxpayers money by paying off the bonds ahead of schedule and making the TCF Center financially viable. We continue to attract regional and international events to Detroit by providing a world-class venue with superior customer service for all of our guests.”
The authority completed a $279 million renovation and upgrade to the center on time and within budget in August 2015. As a result, the center became more accessible, spacious, and efficient in it use of space. Since the renovation, the center has experienced a record number of bookings. It hosts nearly 1.3 million visitors each year and will host 209 events this year, including the North American International Auto Show in June.
