Pistons Unveil Specifics Of Detroit Move

DETROIT (CBS Detroit)  The Detroit Pistons are moving downtown to share the under-construction Little Caesars Arena with the Detroit Red Wings, and building a state-of-the-art practice facility and corporate headquarters nearby.

Chris Ilitch called the announcement a truly historic day. Detroit will become the only city in the country with four major sports teams playing in venues within a walkable distance inside the city, he added.

"Days like today positively shape our future," he said, adding it also shapes Detroit's comeback story.

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A bond refinancing and other moves were announced at the Detroit Downtown Development Authority meeting that preceded the announcement. An extra $34 million is expected to be raised by the refinancing.

"We believe now with the position the city's in and that interest rates are in, half of the $34 million will come from savings from the refinancing," Mayor Mike Duggan reported at the meeting.

He added: "The city of Detroit is going to land a professional basketball franchise for a $34 million contribution, half of which is going to be savings from refinancing."

The city of Detroit issued $250 million in public bonds in 2014 to help finance the arena; the Olympia organization is responsible for all the cost above the $250 million.

For his part, Arn Tellem, vice chairman of the Palace Sports and Entertainment said he was excited to announce the Pistons' downtown move, and happy to say the team will contribute mightily to community programs as part of the deal.

"We're delighted to not just move to the city, to commit to all these community benefits, we want to be all in in Detroit," he said.

About 60 basketball courts will be repaired at a cost of $2.5 million over the next six years by the Pistons organization, Duggan reported. The city will maintain those courts.

The Pistons also agreed to give 20,000 tickets per year to city residents and youth as a community benefit.

With the Pistons and Red Wings playing under one roof just blocks from the Tigers' Comerica Park, and Ford Field, home to the Lions, Detroit will be the only North American city to have each of the four major professional sports leagues housed within four blocks in its urban core, District Detroit said in a press release. The District Detroit includes a 50-block, mixed-use development with six theaters, five neighborhoods and three professional sports venues housing the Detroit Tigers, Detroit Red Wings, Detroit Pistons and Detroit Lions.

The Pistons are currently playing their 29th and final season at The Palace of Auburn Hills and will honor that history throughout the season, according to a press release. There's no word on what will happen to the facility.

The Pistons' move is subject to approval by the NBA, and is expected to be presented to the league's Board of Governors sometime after the first of the year. Between now and then, formal legal agreements will need to be finalized, including an arena sub-concession and various other agreements between PS&E, the Ilitch organization and the DDA.

In the meantime, the parties have entered into various memoranda of understanding, which includes provisions for both parties' sports franchises remaining separate and each sports franchise managing its own business operations.

Following DDA approval of the agreement, the DDA board, Detroit City Council and Michigan Strategic Fund board will be asked to approve the amended tax increment plan to support the proposed refinancing.

John Love of Holly, Mich., appeared at the meeting to protest the move, saying there's no financial benefit to the city. "Violations of this whole thing are just continued non-stop," he said.

Steve Neavling, who runs the Motor City Muckraker website, pointed out that the press conference announcing the move was set for 3 p.m., just 30 minutes after the DDA meeting began.

Duggan clarified that the DDA meeting was just a review, adding the approvals for this agreement must come at City Council meetings in January, February, and March 2017.

Another resident questioned whether billionaire team owner Tom Gores really needs $34 million from the taxpayers, and if basketball courts and clinics are the best contribution from the team. "I would encourage the Pistons to sponsor reading clinics, math clinics, science clinics," he said.

Officials say the cost of building the Detroit Red Wings' new arena, which the Pistons will now share, has jumped by $105 million to nearly $733 million.

The cost revision comes per the specific cost of materials, permits, design refinements and subcontractor agreements, experts said. The Detroit News says city documents indicate other construction costs could rise.

Officials say the revision doesn't indicate massive cost overruns nor that taxpayers will face additional expenses.

Ilitch said the "stunning" arena is on target for its opening date next fall.

What's to happen with the Palace? District Detroit said in the release that Gores believes it's "premature to discuss the future of the Palace, but expects there will be a lot of attractive options."