DETROIT – Huge sporting events, such as WrestleMania, create memories that will last a lifetime, but what about the economic impact on the cities and surrounding areas in which these events are held?
The Motor City and the Great Lakes State of Michigan have been home to a variety of renowned events over the past few years including the 2004 Ryder Cup ($114-million gross economic impact), the 2005 Major League Baseball All-Star Game ($42-million gross economic impact), Super Bowl XL ($261-million gross economic impact), and last month’s WrestleMania 23.
A few days prior to WrestleMania 23, Mick Foley had a book and DVD signing at a Kmart retail store in Troy, near Detroit. Sales were up around 20 percent for the day, according to the district manager. While an official economic study was not conducted by the Detroit Metro Convention & Visitors Bureau, WWE’s corporate website states, “WrestleMania 23 is the highest grossing one-day live event in WWE history, grossing more than $5.38 million in ticket sales. Fans converged on Detroit from 24 countries, all 50 states and 9 Canadian provinces, pumping an estimated $25 million into the local economy.”
However, the following statement was issued directly to SLAM! Wrestling by the Office of Michigan Governor, Jennifer Granholm, regarding the intention of such huge events: “Governor Granholm is always ready to welcome the world to Detroit and to Michigan. Events like the Super Bowl, the MLB All-Star Game and WrestleMania 23 are great ways to showcase the vibrant centers of culture and commerce that Detroit, and cities across the state, have to offer. Our administration is committed to investing in Michigan’s citizens and finding ways to partner with Michigan cities to strengthen their local economies. From investing in infrastructure, to growing new jobs and diversifying the economy, to ensuring all children have the ability to go to college; Governor Granholm’s economic plan is all about the opportunity to live a great life in one of the great cities in the Great Lakes State.”
Michigan is currently in a transitional period due to ongoing economic challenges. Earlier this year, the Southeast Michigan Council of Governments released its economic and demographic forecast for Southeast Michigan through 2035 entitled A Region in Turbulence and Transition: The Economic and Demographic Outlook for Southeast Michigan Through 2035. The summary states:
Southeast Michigan’s economy is in the midst of a fundamental restructuring that has serious consequences for the region’s long-term future, to 2035. This turbulence and transition is due to the shrinkage of the domestic auto industry, where the Big Three have seen their share of U.S. light-vehicle sales (cars, SUVs, vans, pickup trucks) decline from 73 percent in 1995 to 53 percent in 2006. The region’s economy is 680 percent more concentrated in auto manufacturing than the national economy — a gross disproportion, and the main reason why it struggles today. The very strength in auto manufacturing that enabled Southeast Michigan to be one of the most prosperous region in the country for most of the 20th century now leaves it vulnerable and overly dependent on the success of the Big Three slice of the industry. With the rise in gas prices, sales of higher-priced, less fuel-efficient vehicles have declined dramatically. To survive, the region needs to diversify its economy, make a concerted effort to invest in other activities that show promise for future growth and prosperity, and invest in a more highly skilled and educated workforce. The consequences of the changes in the auto industry are profound. Losses of jobs in the region’s core industry are rippling through our economy and will be felt across many sectors, from retail to construction. Southeast Michigan has lost 128,000 jobs since 2000 and will not begin to gain total jobs until 2010. By 2035, the region’s employment will have grown seven percent over 2005 levels.
Detroit is the largest city in the state, the tenth largest city in the U.S., and the eighth largest metropolitan area. But Detroit leads the U.S. in new foreclosure filings, unemployment runs near 14 percent and a third of the population lives in poverty, according to RealtyTrac which publishes the U.S.’s largest, most comprehensive foreclosure database.
According to Real Estate One Realtor, Dennis Maccario, “Some people are leaving the state so they put their house up for sale, and people who aren’t leaving the state, that have lost their jobs, have to sell as well. That’s why you have so many foreclosures because they can’t sell quick enough to avoid it. Let’s say in a particular city there used to be 200 houses for sale and now there are 600 for sale. The amount of buyers hasn’t increased, but the amount of listings has tripled, even quadrupled in some cities so your house doesn’t sell.”
At least 16 of 300 Detroit-area houses sold for $30,000 or less in a March weekend sale by Texas-based auction firm Hudson & Marshall. Subsequently, the average new car costs $29,000.
“It’s not just lower price houses, it’s higher price houses too that are sitting on the market just as long if not longer,” adds Maccario. “In Grosse Pointe, a nice house that would have as easily sold for $400,000 three or four years ago will now sit on the market for two years, and they may wind up closer with around $325,000. They are going to take a definite loss, and it’s going to take a lot longer to sell. On my side of town, it doesn’t matter if it’s modest price houses of $100,000 or expensive ones of $300,000 or $400,000, they’re languishing on the market.”
Maccario also explained the professional difficulties he faces in Michigan’s current economic climate.
“I work with both sellers and buyers. With sellers, when I list the house, it might sit on the market for six months to a year. Obviously, you don’t make as much money because of that. When I work with buyers, it’s not as quick of a sale because they have too much inventory to look at. Instead of looking at a dozen houses, they can look at three or four dozen houses. You can spend a lot more time with the buyers and rightfully so. They have the right to look at all of those houses in order to get the best deal possible.”
Over the past 30 years, Detroit has lost more than half its population and continues to struggle with social problems such as failing schools and rising crime.
In a 2006 graduation rate study, sponsored by the Bill & Melinda Gates Foundation, research shows among the U.S.’s 50 largest urban school districts, three graduate fewer than 40%: Detroit (21.7%), Baltimore (38.5%) and New York City (38.9%).
Officials report the city had 411 murders in 2006, up from 374 in 2005. In his March 12 State of the City Address, Detroit Mayor Kwame Kilpatrick stated, “The crime issue in the city of Detroit has consistently and constantly undermined any notion of recovery and revitalization or renaissance in this city for more than 40 years. No matter what we do — host the Super Bowl . . . host the All-Star Game . . . lead the region in new housing . . . sell million dollar condos downtown . . . build more housing than ever . . . open three new neighborhood recreation centers . . . fix streets . . . fix parks . . . host the Grand Prix on Belle Isle — the crime issue constantly undermines any notion of recovery all the time.”
While WrestleMania 23 was not the end all, be all answer to Michigan’s problems, similar events will help with the revitalization process.
“Events like this pump in a ton of money to the coffers of the surrounding cities. It brings a lot of money to the economy and serves as a shot in the arm,” said Maccario. “Granted, it’s short term, but it’s a boost. In five to ten years, there will be a new Michigan. Hopefully, our government can truly say, ‘If we don’t want to die, we’re going to have to really diversify this time and fight to get other types of industry into Michigan. We have to give them a reason to want to come to Michigan.’
“I have lived in Michigan my entire life, and I don’t want to see it falter,” continued Maccario. “You hate to see so many friends and neighbors struggle to make ends meet.”
*Both representatives from the Detroit Free Press (owned by Gannett Co, Inc.) and the Detroit News (owned by MediaNews Group) declined comment regarding their coverage of WrestleMania 23.
UPCOMING EVENTS
– PGA Championship in 2008 at Oakland Hills in Bloomfield Township
– United States Bowling Congress (USBC) Women’s Championships in 2008
– NCAA Final Four Men’s Basketball at Ford Field in 2009
– NCAA Men’s Frozen Four hockey finals in 2010 at Ford Field
— with files from Chris Schramm
