Councilwoman Saunteel Jenkins said the deal isn't perfect but is an improvement over the previous proposal.
"It's much better than what we had originally and certainly better than what sits in that space right now, which is nothing," Jenkins said.
Before the vote, members of the public addressed the council.
"I believe this project has a wonderful chance for success that will benefit the city and the region as a whole," said Joel Landy, a developer who owns 50 residential and commercial properties north of Interstate 75.
Jerry Belanger, owner of buildings that house Cliff Bell's jazz club, the Park Bar and Bucharest Grill, said the plan gives Red Wings owner Mike Ilitch an unfair competitive advantage.
"He can't go toe-to-toe with me on a fair playing field. He can't win without public money," Belanger said.