The City of Detroit is on the verge of settling a long-standing debt it says is owed by the Ilitch family’s business empire so the Red Wings owner can move forward with a plan to build a new hockey arena near downtown.

City officials say the Ilitches could owe the bankrupt city up to $80 million in payments tied to cable TV revenues, which were included in a 1980 amendment to the Red Wings’ original lease of Joe Louis Arena before the Ilitches bought the team in 1982. It is unknown whether the Ilitches ever have paid the city anything related to such revenues, according to city records. Nor is it clear how much of an effort the city has made over the past 30 years to assess and collect any money owed it.

But now the city is expected to offer a settlement of about $6 million to resolve the cable TV issue and a variety of other unpaid bills at the Joe.

Olympia Entertainment, an Ilitch company, has maintained through the years that the city is not entitled to any cable TV money. The company informed the city in 2007 that “Olympia has neither sold any such rights nor has it received any money for the sale of such rights.” The company’s position has made it difficult for the city to calculate how much it believes the company owes.

Nevertheless, a report on the new Red Wings arena project by the City Council’s Legislative Policy Division in August said outstanding television payments have been estimated to be between $50 million and $80 million.

“The city has been entitled to 25% of gross profits in excess of $750,000 received from the sale of television rights for events held live in either JLA or Cobo Arena,” the report said. “Although the city has been entitled to this remittance since 1980, it is unknown whether it has ever been received.”

The deal is being brokered by the Jones Day law firm and also includes a new lease of Joe Louis Arena so the Red Wings can continue to play there until the new taxpayer-supported stadium is expected to be built, as early as the 2016-17 season.

Bill Nowling, a spokesman for emergency manager Kevyn Orr, would not dispute a final settlement of about $6 million to clear up the debt. Nowling said he expects a resolution by Friday, when the Detroit City Council meets to discuss the new arena project.

Nowling said this week that the amount the Ilitches owe may be inflated and incorrect.

“There’s a level of urban legend anytime the subject of how much the city is owed is discussed,” Nowling said. “Getting to the bottom of it can be troublesome and difficult.”

Ilitch Holdings said that it cannot comment on ongoing negotiations. Mike and Marian Ilitch they own several companies that do business in Detroit, including the Tigers.

The settlement would help pave the way for the new, $450-million hockey arena on the west side of Woodward just north of where I-75 crosses the northern edge of downtown. A resolution of all outstanding issues related to the team’s lease of Joe Louis Arena, which expired in 2010, is needed for the project to be finalized.

A state economic development board has agreed to issue bondsto pay for the arena’s construction. To pay off the bonds over 30 years, the Detroit Downtown Development Authority has committed to pay at least $12.8 million a year from its tax increment financing revenues and about an additional $2 million annually from other tax increment revenues. Olympia Development of Michigan, an Ilitch company, will pay $11.5 million a year until the bonds are paid off. No money from the city’s general fund will be used for the project and Olympia will have naming rights for the new arena and will keep all revenues from the arena operations.

City officials for years have butted heads with Ilitch family companies over finances. Most recently, Olympia Entertainment agreed to pay the city nearly $2.6 million in February after the Free Press reported on the company’s unpaid property tax bills at the Joe.

Although the team’s lease expired in 2010, it remains a holdover tenant that is bound by the lease terms.

However, the company had not been making payments required under the lease since it expired. Olympia was to pay $300,000 a year plus property taxes capped at $252,000 a year.

When Olympia agreed to the $2.6-million payment in February, the company told the city that the payment covered rent, property taxes and other financial obligations tied to its occupancy of Joe Louis Arena.

But the city’s chief financial officer at the time, Jack Martin, disagreed. In a Feb. 22 letter to Olympia Entertainment, he said the money did not cover all of the company’s obligations under the expired lease, including rent and property taxes.

“We are ready and willing to discuss the process for reconciling the difference between your payment and the final payment due and owing,” Martin wrote in the letter to Olympia Entertainment. “The city of Detroit, therefore, gives notice that it retains all of its rights and remedies, and reiterates that the receipt of the checks are not to be deemed payment in full satisfaction of past amounts due and owing.”

The settlement of the Ilitch companies’ debt, including any outstanding payments for playing in the Joe, is expected to be discussed on Friday when the City Council holds a public hearing on two ordinances it has been asked to approve for the new arena project, including a request to expand the DDA’s boundaries to capture the necessary property taxes to help pay off the arena’s construction bonds.