BACKGROUND
Looking historically at the Cobo Hall regional debate over the past decade, there have been a few themes that continually re-emerge. It is safe to say that nobody reasonably questions the need for a major renovation of Cobo Hall. Further, there is almost universal agreement about the need for some level of expansion of Cobo in order to accommodate the needs of the North American International Auto Show so that the NAIAS can maintain its international status. Additionally, the vast majority of stakeholders believe that if Cobo Hall truly is a regional asset then the ownership and management structure should reflect the region that finances its capital improvements. Robert Ficano’s plan for Cobo Hall renovation and expansion address all of these major themes in a very fiscally responsible and conservative manner.
SOCIO-ECONOMIC IMPACT: THE DRIVE BEHIND THE INITIATIVE
David Sowerby's Economic Impact Study
Before describing the specifics of the Cobo Hall plan, it is important to understand the economic case for renovating and expanding the convention center. Put simply, the State of Michigan cannot afford to lose the economic impact of Cobo Hall and its largest show, the North American International Auto Show. In order to make sure that we achieved a base understanding of the economic impact, Wayne County contacted noted economist, David Sowerby, to conduct an independent economic impact study on Cobo Hall. To ensure that all of the relevant questions were asked, we solicited the direct input from all of the stakeholders on the scope of the analysis from Mr. Sowerby. As a result, both Oakland and Macomb County expressly contributed to the scope of service. The resulting report very conservatively shows a total economic impact to the tri-county region of $600 million. Specific highlights of the economic report include:
- Over 16,600 jobs are directly tied to Cobo Hall activities, with 80% of those jobs directly tied to the North American International Auto Show. That means 9900 jobs in Detroit/Wayne County, almost 5,000 jobs in Oakland County, and over 1600 jobs in Macomb County.
- The economic impact of Cobo Hall to Oakland County is approximately $180 million annually without a penny of Oakland County general funds support, an $18 to $1 annual return on investment. Further, Oakland County receives 30% of the economic benefit from Cobo Expansion and yet its tax contribution to support Cobo Hall is less than 20%
- Macomb County receives approximately $60 million annually in economic impact without a penny of general funds support, with a net annual contribution of taxes collected of less than $5 million, a $12 to $1 annual return on investment.
- This economic impact equates to over 50 Super Bowls or 400 World Series Games over a 10-year period.
