Detroit's Silverdome almost sold for 1% of original cost
The Pontiac Silverdome was sold this week at auction for $583,000, or about 1% of the $55.7 million it took to build it in 1975, according to the Christian Science Monitor.
The sale was halted Wednesday when a judge ordered an injunction to stop it after a complaint was filed by developer H. Wallace Parker, who claims he had an agreement with the city to buy it, according to Crain's Detroit Business.
But while the sale is on hold, consider the potential loss that Detroit faces in the building that was once home to the NFL's Detroit Lions.
In July 2008, a little more than a year ago, Parker and the Pontiac City Council approved a purchase agreement for Parker to buy the property for $20 million, later reduced to $17 million. He signed the deal in August 2008, but the mayor at the time vetoed it because he didn't think Parker would be able to fund it.
That's strike one. The empty Silverdome could have been unloaded for $17 million.
Or maybe it should be strike two. The first was 34 years ago, in 1975, when the 80,300-seat stadium was built for $55.7 million. Now, the best deal the city can get is $583,000 at auction.
Cities are too often paying for new stadiums for professional sports teams. And while not all such cities have been hit as hard by the recession as those in Michigan, the pending sale is a basic economics lesson to any city looking to unload such property: Buy low, sell high.
Pontiac missed its chance a year ago. It may never get it back.