Detroit Regional Convention Facility Authority (DRCFA) Saving State Taxpayers $74.7M

Encouraged by Cobo Center’s Financial Progress

DETROIT, MI - The Detroit Regional Convention Facility Authority (DRCFA) announced today that it is encouraged by Cobo Center’s financial progress and through the DRCFA’s effective management of financial resources, the DRCFA is saving the state’s taxpayers an estimated $74.7 million since its inception in 2009. The City of Detroit and individual municipalities across the state are also benefitting from this financial structure, saving them millions of dollars.

“The Authority takes the legislative mandate seriously and has implemented strategies, procedures and quality standards to insure growth and prosperity of the Center,” said Larry Alexander, Chairman of the Board, DRCFA. “Our goal is to ensure we have a convention center that meets the demands of our customers, provides a sense of pride for our residents, and ensures a return on the investment made by the taxpayers of the state and our bondholders.”

Over the past two years, the Convention Facility Development Fund (CFDF) has generated excess funds that are dedicated to the early retirement of debt according to the terms of the DRCFA’s enabling legislation. The DRCFA used $32.45 million in excess CFDF proceeds to retire $30,375,000 in outstanding bond principal, saving state’s taxpayers $22.66 million. Combined with the estimated $30 million saved by the financing structure employed for the capital program and the $22.1 million saved from the defeasance of the 2003 bonds that were inherited from the City of Detroit, the DRCFA has saved state’s taxpayers an estimated $74.7 million just from financial management. This financial structure is saving state taxpayers $22.66 million and individual municipalities across the state are also benefitting, receiving their liquor tax back with an additional one percent interest premium.

“We are pleased by the progress that is being made toward paying down the bonds and the tremendous value it is bringing to taxpayers,” said Patrick Bero, Chief Executive Officer and Chief Financial Officer, DRCFA. “It is important for the DRCFA to continue to adequately respond to market demand. Our focus continues to be on saving taxpayers money and providing a world-class convention center for all of our visitors.”

Cobo Center had a record-setting year in 2017 with 497 event days and a 350 percent increase in revenue since 2009.

The DRCFA completed a $279 million renovation and upgrade to Cobo Center on time and within budget in August 2015. As a result of the renovation, Cobo Center has become more accessible, spacious and efficient in its use of space. The world-class convention center now offers spectacular views of the Detroit River and Canada, multiple new entrances, increased parking, public art and improved traffic flow to enhance visitor experience. Since the renovation, Cobo Center has increased the amount of bookings.

The DRCFA estimates an additional $30 million in capital projects towards maintenance and facility improvements at Cobo Center. These costs will be paid for through operating funds.

Located downtown on the beautiful Detroit Riverfront, Cobo Center is one of the largest convention centers in the nation and hosts nearly 1.4 million visitors annually.





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