Yep, Pistons owner is getting even more public money to move team to downtown Detroit

And we have the terms under which the Detroit Pistons will move from their 28-year-old arena in Auburn Hills to a zero-year-old arena in their namesake city, courtesy of MLive. With no further ado:

The Pistons will play all home games at the 20,000-seat Little Ceasars Arena starting with the 2017-18 season.

Right, we figured.

The team and Palace Sports & Entertainment will move its business operations, corporate headquarters, team practice and training facilities into a new practice facility, to be built north of the arena at a cost between $32 and $55 million.

That’s pricey. Who’s going to pay for that?

Detroit’s DDA has agreed to contribute $34.5 million in additional bond proceeds through refinancing to be used for redesign and construction to modify Little Caesars Arena from a hockey facility to jointly house an NHL and NBA team.

Apparently Steve Neavling was right to be suspicious when Detroit’s Downtown Development Authority scheduled a meeting for a half-hour before the Pistons announcement and wouldn’t tell anybody what it was. But is this real Detroit city money, or passthrough money that’s really coming out of state education funds, like most of the rest of the arena costs? Reply cloudy, ask again later.

No city of Detroit general fund dollars will be spent on the arena project, and any additional costs or cost overruns will be paid entirely by the Pistons, the Red Wings and associated companies.

Teams pay overruns, all the public money comes out of special segregated funds, not the precious “general fund,” blah blah. It’s still city (or state) dollars that could be used for something else otherwise.

The Pistons are responsible for all costs relating to the development, construction, operation and maintenance of the practice facility.

That’s good!

The location of the team’s practice facility may be owned by the DDA, subjection to a concession agreement with the Pistons.

That’s possibly bad, since it means the practice facility wouldn’t pay any property taxes! Unless the concession agreement involved making payments in lieu of taxes. Reply cloudy, etc.

The Pistons have agreed to a 10-point community benefits plan, including investing $2.5 million over six years for the construction, renovation and refurbishment of more than 60 basketball courts in Detroit, the employment of at least 51 percent of Detroit residents on the construction of the practice facility and provide 20,000 free tickets a year to Detroit youth and area residents.

Better than nothing, but for what the DDA is putting into this, they could have built 1,000 basketball courts.

So, wait, who’s paying for that practice arena again?

Wait, what?

Okay, phew. You know, this “rough draft of history” stuff was a lot easier before Twitter got people publishing their actual rough drafts.

Anyway, total public subsidies for the arena are now at $334.5 million at minimum, and possibly even higher than that. You can argue that it’s worth it to Detroit to throw this money at the arena in order to lure the Pistons across the border from Auburn Hills — the tax impact may not be as huge as team owners like to pretend, but it doesn’t have to be to repay just $34.5 million — or you could argue that the Red Wings are eliminating a competitor (the Palace at Auburn Hills will almost certainly be razed now) and the Pistons are getting a newer home, and they’re both owned by billionaires who clearly want to do this deal regardless, so why the hell can’t they pay for adding a basketball court instead of Detroit be giving up scarce tax revenue?

More news tomorrow morning, if the magic eight ball clears up.

20 comments on “Yep, Pistons owner is getting even more public money to move team to downtown Detroit

  1. Its great how you guys insist on being misleading about what the DDA is, and pretending that money would be captured for other things of it didn’t exist. There’s no reason to believe that.

    The most you have is theorizing that it somehow impacts the state’s general education fund, but that has fuck all to do with Detroit since nobody in Lansing wants to help the city anyway.

  2. The DDA is funded out of property tax revenues, so, yeah, the money would be captured for other things if the DDA didn’t exist — or if the DDA even chose not to give money to the Pistons.

    If the state reimburses the city for this chunk of change, then, yes, it comes out of state taxpayers’ pockets, only some of whom live in Detroit. I suppose it’s better for Detroit if it’s schoolkids in Flint who are paying for their arena in addition to those in Detroit, but I’m not sure how that makes it a good thing for, you know, humans overall.

  3. This is absolute horseshit.

    I have been in at least a dozen current NBA/NHL arenas and none of them are significantly better facilities than The Palace and a few of them, all newer, are noticeably worse.

    The Palace is a great facility that was 20 years ahead of its time when it was opened and has been constantly maintained and upgraded and it is not obsolete in anyway whatsoever.

    This whole “Oh it’s WAYYYYYYYY” out in the sticks.” Excuse is such crap. It’s actually located closer to many of the people in the suburbs who have the means and are more likely to go to Piston games and other events. Being “Downtown” doesn’t mean jack since there isn’t a whole hell of a lot to do down there, especially in the winter.

    And if you’re going to blather on about the Detroit “comeback” spare me. A few bars, restaurants and apartments have opened in the last decade…..whoopee. It’s still a pittance compared to what most other major cities can offer and the city is still mostly mile after mile of urban decay. The people who have benefitted the most from the comeback are the sports teams who all have shiny stadiums surrounded by squalor.

    As ridiculous as the Rangers new stadium is, at least they can say they want air conditioning, Gores and the Pistons don’t have ANY excuse aside from fleecing the public for more money.

    Meanwhile a mere hour away from Detroit, Flint can’t even get safe drinking water in their homes and the state is fighting a federal order to deliver bottled water to homes because, at an estimated $4 million a year it’s “too expensive”

    They need to change the tourist slogan from “Pure Michigan” to “Michigan: This place stinks worse than a whore house at low tide.”

    • I imagine Gores’ excuse would be “Mike Ilitch and I can make more money with a one-arena monopoly than by competing in two arenas, and his arena is newer than mine, so.”

      Of course, Ilitch’s arena wouldn’t be newer if the DDA and the state hadn’t offered him $300m.

      • Shouldn’t surprise me about the DDA. We are talking about a state where the governor, at last check, has used $6 million of the taxpayers money so he can “consult” with lawyers about the Flint water disaster.
        Of course he hasn’t bothered to inform the public what he’s exactly consulting about.

    • Agreed, downtown Detroit’s “appeal” is one of the reasons Davidson didn’t want to move the team into the JLA…

      I understand it has improved some since 1980, but it’s still not a destination. Will the new taxpayer funded palace change that? Don’t know.

      The Palace at Auburn Hills is a fine building even by today’s standards. I don’t really see what the attraction in moving from playing in your own building to share someone else’s is. I guess new is new, but it’s not like the Palace is a 30yr old used car….

  4. I’d say the argument of bringing a team into your jurisdiction and getting the tax revenue isn’t terrible…BUT how the hell is it going to cost over $30 million to make this arena NBA ready. A basketball court, hoops, and redesigning a locker room cannot cost that much.

    Also, can’t they take that almost new scoreboard from the Palace and set it up in the Pizza Dome. Hell, take the basketball court while there at it.

    And you’re still in a state that has no clean drinking water for one of its major cities. Pathetic.

    • I agree completely. There’s. I way that this $34.5 million is necessary just to house the Pistons. It’s probably just a situation where the arena is $105 million over budget and the Red Wings (who are on the hook for cost overruns) convinced Detroit to cover $34.5 million of that.

    • No they can’t take the video boards from the Palace to the pizza dome.
      They’re nearly two years old now, why use such outdated technology when Ilitch can get brand new ones and stick the taxpayers with the bill.

  5. As the old saying goes follow the money. The city of Detroit levies an income tax on people working in the city. So between the players, team staff, visiting teams and the corporate staff the city itself is looking at a windfall of $4-5m a year in additional tax revenue. I don’t see this as anything more than a money grab by the city.

    • The city of Detroit has a budget of over a billion dollars a year. A five million dollar “windfall” is about 1 half of one percent of the budget. Or sort of like finding about $500 on the street on your way home from work one day a year. Nice to have, but doesn’t do much for the big picture.

  6. I think it’s fair to say that NBA fans tend to be more into living in cities than NHL fans. So, if this is a revitalization project, it could end up making sense to bring the Pistons to the city and hope that it triggers some hipsters to move in, Brooklyn/Silver Lake style.

  7. So now the practice facility, offices etc will be tax exempt too?

    That’s great planning…
    How are these businesses again? They do not pay for their own facilities or rent them. How long before the subject of city income tax relief on the players and other employees (you know, so they can “compete” in an open marketplace with other NBA/NHL teams that don’t pay that…) is floated?

    Davidson refused to move the team downtown when the JLA was built… and moving them to Auburn Hills (eventually, after the Silverdome) turned out to be a master stroke. It could be that their existing fan base will follow them downtown (or that a new fanbase will be created there), but not certain.

  8. Any pro sports owner who isn’t get all kinds of public cash ladled over him like turkey gravy is just plain stupid. That’s the game these days and it’s just a matter of how well you play it.

  9. Well, shut my mouth wide open; I’m shocked. We were told that around the arena there would be all this private development, apartments (and there is an increase in residential space in the downtown area), shops, offices, you know, all that revenue-producing stuff that would more than pay for the cost of the arena.

    Yet at least some of the land will not be used to produce revenue and taxes but will be taken off the books, and as Neil points out, soak up money that ultimately could be used for actually productive things or, dare I say it, not take from the taxpayers in the first place.

    Neil, I’m curious, and this is not a rhetorical question. Has there been any stadium or arena project that actually fulfilled the promises made to get it through?

    • Isn’t that a little like asking if any politician has ever lived up to their campaign promises? Words are such squishy things…