Each year, thousands of journalists arrive in Detroit to see the best and brightest concepts and production vehicles automakers have to offer. It's estimated that the Detroit Auto Show brings in $500 to $600 million dollars annually to the region, which is struggling more than most due to the global recession. For years, the City of Detroit has failed to expand Cobo, and each year there are threats that the NAIAS will be taken away from the Motor City. The state of Michigan has been working with executives from Wayne and Oakland counties and the city of Detroit to upgrade Cobo, but yesterday the Detroit City Council voted down the proposed plan by a five-three tally. The proposed expansion was to add a much needed 166,000-sq. ft. of floorspace at a cost of $288 million.
The part of the plan that isn't sitting well with Detroit officials is a stipulation that hands control of the aging facility to a regional authority controlled by the tri-county area and representatives from the city and state. The city would receive $20 million dollars in funds to cede power of Cobo, but the council feels they aren't getting fair value for the venue. The city, which has been knee-deep in debt for years, operates Cobo at an annual loss of between $13 and $15 million. Due to disrepair, analysts say the building is worth a negative $284 million dollars.
We love the Detroit show, but the fact is that Cobo is a bit of a dump. The escalators don't always work, the cars are crammed into the limited floor space, and last year a fork lift collapsed into the Cobo floor. Automakers have been making their concerns known, with several pulling out of Detroit this year and a few more revealing no new products. NAIAS organizers say that Cobo must be repaired in 2010 or the city could lose its International designation. Exactly what the struggling city and region don't need right now.
[Source: Automotive News - Sub. Req.]