Granholm To Sign $288M Cobo Expansion Bill

The law will allow the authority to raise almost $290 million, which would increase the center's size by 166,000 square feet, through a hike on the hotel tax in the counties of Oakland, Macomb and Wayne, which includes the city of Detroit. An expansion of the statewide liquor tax will also help raise the funds.

State and Detroit officials have been trying for the past few years to figure out a plan to raise money to improve and expand Cobo, the city's main convention facility and the annual home of the auto show, in particular to keep the show from moving to another city. Detroit, which owns the center now, had asked Oakland and Macomb officials to help fund various plans, but the other county officials had balked at not having control, particularly Oakland County executive L. Brooks Patterson.

Now, the authority will own the center. The authority will pay $20 million for the center to Detroit, which will reportedly use the money to pay Cobo parking bonds. The city will also be able to save a reported $15 million per year from funds it spent on upkeep of the center.

The five-member authority will have an individual appointed by the governor with the consent of the state senate, and a person appointed by the mayor of Detroit. Each county will also appoint one person to the board. Detroit has 45 days to oppose the bill, and then the authority will seat members within 30 days to six-year seats.

There is still some contention to the plan. Detroit City Council officials have said they have a problem with the authority not incorporating preferential treatment to hire Detroit-based businesses for the expansion work. However, the authority plan gives each member veto authority, a move that the city could use to force the other members to agree to the city-business preference…or could cause multiple problems if authority members don't agree.

A large increase in hotel rooms, many attributable to the mandatory hotels built by the three casinos in the city, has increased the need for a better convention center, local officials have said. Also, the auto show has threatened to leave to another venue following Detroit's decline and the age of the 49-year-old center. Something had to be done, however, said experts. A study done by local economist David Sowerby in December 2007 reported that Cobo's impact to the region is $595 million, with most of the figure coming from the auto show.