DETROIT, MI – Bloomberg News has taken note of what some see as a paradox of a $650 million Detroit Red Wings arena and entertainment district being developed with hundreds of millions of dollars of public money as the city it would be located in struggles through a federal bankruptcy filing.

Full report: Detroit Billionaires Get Arena Help as Bankrupt City Suffers

At issue is the fact that it would be funded in part by an economic development tool known as tax increment financing (TIFs), which captures property tax revenues while assuming that property values in the development area will rise.

State and local officials have both told MLive that the project will be a "catalyst" for Detroit and thus for the state as a whole, while some economists who specialize in sports development suggest that it will merely shift economic activity from one area of the city to another.

Below is the “good,” as told to Bloomberg.

Gov. Rick Snyder called the project a “momentum shift” for the relatively sparse area between downtown and Midtown Detroit – two areas which are seeing relatively high rates of development. He said in a conference call:

John Hahn, a spokesman for Detroit Red Wings owner Mike Ilitch’s Olympia Development, in a prepared statement:

And here’s the bad:

Bloomberg reports that roughly $13 million in taxes levied in the Downtown Development Authority District would otherwise go back to public schools and the state’s school-aid fund, according to a legislative analysis.

Mike LaFaive, a director at the Mackinac Center for Public Policy, a pro-free-market think tank in Midland, told Bloomberg that the state should not be giving out “corporate welfare”:

Here is a review of the economics:

City and state officials say that the new development would create roughly 5,500 jobs for the arena alone, and about 8,300 jobs for the entire mixed-use district. The Detroit Economic Growth Corporation says it will have a statewide economic impact of $1.8 billion.

The 18,000-seat, state-of-the-art Detroit Red Wings arena and accompanying entertainment district would be funded with a mix of $365.5 million in private investment and an estimated public investment of $284.5 million.

Detroit's Downtown Development Authority will collect up to $15 million a year for the project. According to the Detroit Economic Growth Corporation, the primary public funding mechanism for the project will be about $12.8 million per year in property taxes captured. The DDA will contribute another $2 million each year, and OIympia Development will pay another $11.5 million annually. Together, those three commitments will be used to retire 30-year bonds through the Michigan Strategic Fund.

Related: Plans for $650 million Detroit Red Wings arena and entertainment district unveiled

Related: $1.8 billion economic impact from new Detroit Red Wings arena vastly inflated, economists say

David Muller is the business reporter for MLive Media Group in Detroit. Email him at dmuller@mlive.com or follow him on Twitter.