FREQUENTLY ASKED QUESTIONS

Why do we need an expansion of Cobo?

The Cobo Hall Conference and Exhibition Center is in need of a major retrofit as well as an expansion in order to accommodate current needs. A facility retrofit will bring the facility up to state-of-the-art technology and support improved logistics for new and expanded shows. An expansion of an additional 120,000 square feet will accommodate the growing needs of the North American International Auto Show and its continually increasing requests for additional exhibit space. Even with the expansion, Cobo will still have less than one million square feet making it a very walk-able floor space with enough room to continue to welcome new exhibitors.

How much would an expansion cost and how would it be paid for?

The expansion and renovation of Cobo Hall can be accomplished for a construction budget of only $323 million. This can be funded without any new or increased taxes, only through a seven-year extension of the existing hotel and liquor taxes that are set to expire in 2015.

What specifically would be included in an expansion? Would Cobo Arena be demolished?

Of the $323 million construction budget, approximately $200 million will be used for the total retrofit and renovation of the existing Cobo Hall facility. Approximately $100 million will be needed for the 120,000 square foot expansion to Cobo Hall, and the remaining $35 million can be used for two moving walkways to directly connect Cobo to nearby hotels at the Sheraton Pontchartrain and the Marriott at the Renaissance Center.

The expansion of Cobo Hall will be made directly to the south of the existing ballroom space. So, there will be no need to demolish Cobo Arena in order to accomplish this plan.

Will we lose the North American International Auto Show without an expansion?

What makes the North American International Auto Show so important to our region and our state economy is the fact that it has a truly international status. Annually, we welcome over 6,000 members of the media. That is double the number of media credentials handed out in Detroit for Super Bowl XL.

While Detroit will most likely always be home to an auto show, a renovation and expansion of Cobo Hall is absolutely critical in order to maintain our true international status. Put simply, we cannot continue to host the premiere international auto show if we lack sufficient floor space to accommodate all of the domestic and international exhibitors that request to display here.

How much of Cobo’s annual business comes from the Auto Show?

Noted economist David Sowerby was asked to perform an economic impact analysis related to Cobo Hall. That report is available on this website here. In his analysis, Mr. Sowerby concluded that 80% of the annual impact of Cobo Hall relates to the auto show. In real dollars, that means that Cobo Hall generates $600 million in annual economic impact, with $480 million of that tied directly to the North American International Auto Show.

What’s the economic impact of the Auto Show? How many jobs are tied to Cobo?

Activities at Cobo Hall bring about $600 million in economic impact to the tri-county region of Wayne, Oakland, and Macomb County, according to noted economist David Sowerby. By county, that translates into an annual economic impact of:

$178 Million for Oakland County (30%)
$60 Million for Macomb County (10%) and
$$356 Million for Wayne County and the City of Detroit (60%).

With respect to the number of jobs, the annual economic impact of Cobo Hall activities supports 16,619 jobs. Again, by county, that means the following:

4,986 jobs for Oakland County residents
1,662 jobs for Macomb County residents and
9,971 jobs for Wayne County and City of Detroit residents.

Would ownership of Cobo change?

The Cobo Expansion plan calls for Cobo Hall to be sold by the City of Detroit to a newly created regional convention authority. The new authority would be made up of appointees of regional governmental stakeholders including the State of Michigan, City of Detroit, and Macomb, Oakland, and Wayne Counties. The new authority would then be free to hire private management to run the day-to-day operations at Cobo Hall.

How would a tax-free zone work?

Under the proposal, any sales that take place on the exhibition floor of Cobo Hall would be exempt from the State of Michigan’s 6% sales tax. This is a totally new concept that does not exist anywhere in the United States. By eliminating all state sales taxes for convention sales, this will be a tremendous new marketing tool for Cobo Hall to use to attract new conventions and trade shows to our region. With out of town visitors creating the largest economic impact to our region, there will be substantial new state revenues created even with this incentive.

The bottom line is that everyone wins with a tax-free zone at Cobo Hall. It is a major benefit to Michigan consumers, Michigan manufacturers, the Michigan tourism industry, and out-of-town conventioneers and trade shows.

Who supports the expansion of Cobo and the tax-free zone?

During the past two years, Wayne County Executive Robert Ficano has been holding meetings with various government and private stakeholders to listen to their comments and suggestions. As a result of those meetings, there have been several changes and improvements to the plan. The result is a plan that has broad based support from Governor Granholm, Mayor Kilpatrick, Speaker of the House Andy Dillon, the Detroit Auto Dealers Association and many others.

What is the overall impact of the annual revenue realized by the event?

The North American International Auto Show generates almost $500 million annually in economic impact within the tri-county region, according to noted economist David Sowerby. That’s the same as five Super Bowls each year or 40 World Series games each year. When you put those dollars into perspective, it is mind-boggling. With 16,000 jobs in Wayne County, Oakland County, and Macomb County dependent upon the annual activities that take place at Cobo Hall, it is imperative that we maintain, improve and expand the convention center.

What's next?

We need approval of the three-bill legislative package from both the Michigan House and the Michigan Senate so that Governor Granholm can sign the bills into law. After that, the authority will be established, the Detroit City Council will consider the land sale of Cobo Hall to the regional authority, and, if approved, bonds will be sold to finance the renovation and expansion of Cobo Hall. The timeframe for construction will be between 18 and 24 months and will be staged to avoid any interruption with the North American International Auto Show.