Auto Show Growth Adds Urgency to Cobo Expansion

HIL ANDERSON, SENIOR EDITOR
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Detroit, MI – The long-running notion of expanding Detroit’s downtown Cobo Center moved closer to critical mass in early 2007 after a well-timed proposal to increase the center’s overall size by 40 percent was run up the flagpole. Wayne County Executive Robert Ficano’s plan to overhaul and expand Cobo was laid out in the run-up to the Jan. 13-21 North American International Auto Show (NAIAS), a Motor City icon that expansion supporters warned could fall apart unless a larger venue was found — and found fast.

The event brings about $450 million in annual economic benefit to the greater Detroit area and continues to help stake the city’s claim as the automobile center of the nation despite stiff competition from not only overseas companies but other U.S. cities as well.

“We are extremely proud of the annual economic impact the NAIAS brings to our region,” said Robert Thibodeau, Jr., senior co-chairman of the 2007 show. “Our goal is to keep that revenue stable and here in Michigan for the continued benefit to our economy.”

But with displays at the NAIAS becoming larger and more companies vying for exhibit space, Cobo’s 700,000 square feet of exhibit space has reached its limits. The lack of new space has raised fears that the automakers will begin looking to other shows for their new-model unveilings and begin a long spiral to irrelevance for the venerable NAIAS.

In particular, the automotive press was abuzz at the change of dates for the Los Angeles Auto Show from the week prior to the NAIAS to early December. The pre-Christmas window was seen as giving Los Angeles a much higher visibility and logistically easier for exhibitors to display more vehicles in L.A. and get to Detroit in time for the big event in January. The 2006 Los Angeles event featured a record 35 North American and world auto debuts compared to 45 slated for the 2007 Detroit show.

It was against that backdrop that Ficano in November unveiled his plan for a $968 million project that would increase Cobo to 970,000 square feet and presumably head off auto-show defections and make Detroit a better draw for other major trade shows and conventions.

The proposed expansion would turn Cobo’s Arena and Riverfront Ballroom space into around 270,000 square feet of exhibit space. New loading docks would be built as would a pedestrian walkway connecting Cobo to the Marriott Renaissance Center roughly five blocks away.

No specific timeline for the expansion has been set; however Ficano’s staff has told the Detroit media that if an agreement among the stakeholders can be hammered out in the first half of 2007, engineering work could be completed in about a year, which would lead to an opening date in 2010 or 2011.

Civic leaders and the editorial pages of the city’s newspapers came out quickly in support of expanding Cobo if for no other reason that to nail down the auto show. At the same time they predicted trouble in the form of the proposed financing – a 35-year extension of the Michigan tax on liquor by the drink and the room tax charged at hotels within in the five-county Detroit metro region. Those levies are currently set to expire in 2015.

Sure enough, L. Brooks Patterson, chief executive of neighboring Oakland County, called the taxes a possible deal breaker and publicly questioned why the suburbs should commit to being on the hook for decades for a facility that primarily benefits only downtown Detroit.