Bill Shea of Crain's Detroit Business broke news today that Olympia Entertainment, the parent company of the Detroit Red Wings, will not renew its lease with the city of Detroit for both Cobo Arena and Joe Louis Arena. But Wings' fans, don't get too excited thinking that this means a new arena. Here's their statement:
"Olympia Entertainment today informed the City of Detroit via personal phone call and hand-delivered letter that, pursuant to the terms of its current lease, Olympia Entertainment will not exercise its option to extend the current lease on the Joe Louis and Cobo Arenas for an additional 20 years. The current lease, which covers both arenas, expires on June 30, 2010, and automatically renews for 20 years if Olympia Entertainment did not notify the City of its decision on the option by June 30, 2009. Olympia’s decision to not extend the current lease returns Cobo Arena to the City of Detroit and should assist officials in their efforts to keep the North American International Auto Show in Detroit. This action also allows Olympia Entertainment and the City of Detroit to continue work on a new lease specifically for Joe Louis Arena."
So a few points to take away from this:
- They had to notify the city by June 30, 2009, for the lease that expires next year on the same day.
- If they had not notified the city, the lease would have been automatically renewed for 20 years.
- I don't think anyone expects the Wings to still be playing at the Joe in 20 years.
- The city can now take Cobo Arena and use it for space for the auto show.
- Olympia Entertainment will now work with the city to come up with a lease for JLA.
- Maybe the lease will be for less than five years to see how the economy does and then try to buld a new arena. Maybe they'll go longer than that, but we'll have to see.
- It's unlikely that the new lease will be as great for the Wings, but it'll be interesting to see how different the new lease will look.
- I would believe that OE has until next June to draft a new lease with the city so we may not know about a new arena (or not) until then.