Pistons, Red Wings still not telling anyone how they plan to split their arena boodle

You know what I could really use this morning? A good article to read. Here’s a good article, from Sunday by Bill Shea of Crain’s Detroit. What makes it good: It’s that rare article about an important lack of information, which nonetheless informs readers about what the issues are, and why it’s important to know what certain parties are refusing to divulge:

The long-speculated on deal to relocate the Detroit Pistons from Oakland County to the Red Wings’ new downtown arena that will open in September was formally announced Nov. 22. What hasn’t been disclosed are any details about the upcoming financial relationship between the clubs.

Neither team is willing to discuss terms of the deal — which apparently still is being finalized — and a spokesman for Detroit’s Downtown Development Authority that owns the new arena said the Pistons-Red Wings contract has not yet been shared with the city. Terms of the deal between the teams do not have to be provided to the city or DDA.

There are plenty of ways to structure the deal, reports Shea, including Red Wings owner Mike Ilitch paying the Pistons to play in his arena but then keeping basketball club seat and suite revenue in exchange (as the Boston Bruins do with the Celtics). And what form it takes could have as much with trying to play revenue-sharing arbitrage with the NBA and NHL rules as with plain old sports bookkeeping.

And if you’re wondering why you should care how the Pistons and Red Wings owners divvy up their private revenue — the $334.5 million in public cash in the deal will remain the same regardless — this is not only likely to help determine the future fate of the Pistons’ old arena in Auburn Hills and how the two teams approach monopoly control of a region’s arena market, but should tell us a lot about what teams can get out of new arenas and why they want them. Other than the $334.5 million, obviously — it’s pretty clear why they want that.

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.

Pistons to announce move to Red Wings arena; public money, fate of Auburn Hills arena unclear

For anyone wondering if the Detroit Pistons are really going to abandon their own arena in Auburn Hills and shack up with the Red Wings in downtown Detroit, looks like, yup, they sure are:

The Detroit Pistons will announce Tuesday that they’ll leave The Palace of Auburn Hills to join the Detroit Red Wings at Little Caesars Arena in downtown Detroit for the 2017-18 season, a source familiar with the negotiations told The Detroit News on Monday.

What all this means in terms of financial details between the Pistons and Red Wings owners, the fate of the Palace at Auburn Hills (razed for redevelopment? all-Disney-on-Ice schedule?), and whether any more public money will be involved, we have no clue as of yet — though Motor City Muckraker blogger Steve Neavling notes with alarm that Detroit’s Downtown Development Authority is going to be voting on something right before the Pistons announcement:

neavling_on_stadiumMore news later today, I guess. Though given the way these things go, don’t be too surprised if we get a lot of renderings and not much in the way of financial details until later.

Michigan residents’ $300m for Red Wings arena buying slightly closer seats, plus lasers

This week’s Sports Illustrated has a long profile of the Detroit Red Wings‘ under-construction new arena, which almost entirely consists of quotes from team execs and the arena’s designers, so take with a huge grain of salt. It does include a few tea leaves we can try to read, though, so let’s get to it:

The design starts with putting fans as close to the ice as possible. “We brought in our general manager, Ken Holland, to find which was the most intimidating place we play,” Tom Wilson, CEO of team and arena owner Olympia Entertainment, tells SI.com. “Without question it is Montreal. There is no light. No open concourses. Just a sea of red jerseys screaming at you in French. We went there to see it and, my gosh, they are on top of you.”

George Heinlein, HOK Sports principal, tells SI.com that they designed Little Caesars with Montreal’s Bell Centre’s vertical rise, but with added legroom. “It is about the steepness of the seating bowl,” Heinlein says. “But also the proximity of those fans to the rink.”

This is garbage: Since a hockey arena’s seating starts, by definition, at the edge of the rink, the only way to get fans (in the first deck, at least) closer to the ice is to reduce legroom. This is a tradeoff, obviously — less legroom is bad for the people sitting in those seats, but good for the fans sitting in the rows behind them — but unless HOK has reinvented geometry, they can’t accomplish both at once.

While Detroit’s current Joe Louis Arena has about 40% of seats in the lower bowl, Little Caesars flips the script, putting about 10,500 of the total 19,600 seats in the lower bowl, but with the last row in Little Caesars still able to fit within the last row of Joe Louis.

“More seats in the lower bowl” is actually HOK dogma at this point, apparently because team owners think they can charge more for a seat in the last row of a lower bowl than for a seat in the front row of an upper bowl, though they might be equally good for seeing the game. The last row being no farther from the ice than in the old arena is more promising, if that’s indeed what “fit within the last row of Joe Louis” means.

The baddest bowl eliminates the trendy concept of opening up the concourses to the rink. Instead of creating sightlines through the entire venue, the Red Wings wanted to focus on creating noise, eliminating any holes where noise or energy could escape. “We don’t want to blow out concourses, we want to contain all the energy in the seating bowl,” Heinlein says. “It is a throwback in that regard.”

This sounds like marketing gibberish — “we’re eliminating this thing that everyone has been claiming is one of the best things about new sports venues, and claiming it’s ‘throwback’ and trendy for not being trendy” — and it is, but it’s also potentially kind of cool. One staple of stadium and arena design the last couple of decades has been a large gap between decks, so that fans in concession areas can see the game while waiting on line for food. If you’ve ever been at one of these buildings, though, you know that this usually means “see maybe one corner of the game, or more likely a thin strip of the crowd that is watching the game, while peering around everyone standing around the concourse,” which is entirely useless, especially since there are typically TV monitors everywhere showing you the actual game.

Getting rid of that gap, though, enables the designers to move the entire deck above maybe 10-20 feet down and forward, which is a huge benefit to the people actually sitting in those seats, and could help explain that “worst seat is no worse than in Joe Louis” claim. I’m tentatively optimistic, anyway.

Connecting the interior of Little Caesars with the Via and surrounding neighborhood by blurring the entry plaza concourse with the external streets of the district, Wilson says the space offers diversity and will encourage fans to return over and over to experience new spaces. “The Via is a very active space,” Wilson says. “We want to change the way people come to games. Come at 6 (p.m.), have your choice of sports bars, a market house, a spaghetti house and have a full evening. At the end of the game, there are tons of experiences to still have and discover.”

In other words, the Via (a glassed-in concessions concourse that is meant to feel like it’s “outdoors”) is a cross between traditional concessions areas and an outdoor space controlled by the team like Eutaw Street at Camden Yards or Yawkey Way at Fenway Park. Nothing new, in other words — it’s just team-controlled restaurant space by another name.

Using a 12-laser projection system, the Red Wings can animate the arena, projecting full motion video and images on the arena’s “forward-thinking” metal-panel skin all the way through the Via. “There is nothing like it in Vegas, Disney or Times Square,” Wilson says. “It is an immersive sort of experience that everybody is going to enjoy.”

Dear lord, that sounds awful. Unless you like the stimulation overload of Vegas and Times Square, which I guess lots of people do, but if I count among “everybody,” I expect I’ll be able to personally disprove that last statement.

And that’s more than enough time to spend on a team PR statement. Let’s close with a reminder of the $300 million in public money this is costing Michigan residents, since SI somehow forgot to mention it.

Detroit music critic’s review of new Red Wings arena seems not to understand what crowds are

The Detroit Free Press got to send its “pop music critic” (I swear, that’s his official title) on a tour of the Red Wings‘ new arena construction site this week, and you can read his report on how cool (the Red Wings say) it will be for concerts here. But really I just want to focus on its entry into the ongoing Bad Journalism Theater competition:

Joe Louis event-goers dogged by cramped concourses near concession spots and merchandise booths will find relief: The new arena will feature nearly double the number of purchase locations.

Sure, that reads like something the writer ripped from a press release and tacked an awkward transitional clause onto, but what is it even supposed to mean? “Cramped concourses” aren’t a function of how many purchase locations there are, they’re a function of, you know, cramped concourses. Unless the actual concourses themselves are more spacious — they certainly look nice on the renderings, but that doesn’t tell us much — putting the same number of people on twice as many lines in the same amount of space isn’t going to be any better, and leads to situations like this.

But really, the main lesson here is: Journalists, if you can’t fact-check your stats you get from press releases, at least sanity-check them. Even your mother could be bending the truth, after all.

Red Wings president boasts about how new arena will have tons more ways to sell you crap

Chris Ilitch, president of the Detroit Red Wings and son of team owners Mike and Marian Ilitch, told the Detroit Economic Club yesterday how totally awesome the new arena the team is building (with the help of about $300 million in state and city money) will be:

He said the arena will have five restaurants, seven clubs, a concourse area three times the size of Joe Louis Arena’s and several stories of glass enclosing a “vibrant, urban experience.”

And there, in a nutshell, is what’s driving the new sports venue craze. (That and the ability to get $300 million checks from the local government by crying about how your old building is just so old, anyway.) You’ll note that none of the above has anything to do with actually watching hockey, but rather about all the things you can do (and buy) while not watching hockey, because who goes to a hockey game to watch hockey?

Okay, Ilitch also promised (in the Detroit Free Press’s paraphrase) “seats closer to the rink with better sight lines,” which in the paper was accompanied by this rendering of Wii characters accompanied by the caption, and I am not making this up, “‘gondola’ seating that will put fans closer to the action”:

635822289991312743-gondolaAll this should be a reminder of why sports stadiums and arenas have been found to be terrible economic catalysts — they’re designed to get people spending more money inside the gates, not across the street at whatever stores and restaurants are there. Also that some people will say that absolutely anything is done “for the fans,” and say it with a straight face. Though after the recent New York Yankees ticket resale fiasco, I’d hope that everyone would have learned that lesson already.

Public official who helped approve $284m for Red Wings now working for (you guessed it) Red Wings

Hey, remember George Jackson, the city of Detroit development chief who really hated Tiger Stadium and anyone who loved it and who helped push through the Red Wings‘ new arena plans? What’s he doing these days, anyway?

Jackson went on to start his own real estate consulting firm, Ventra Group. In November, Ventra started work under a contract with the Ilitch family’s arena development company. That same month, Jackson hired a former top lieutenant at the DEGC, Brian Holdwick, who also was on the lead negotiating team for the city on the arena deal.

For some critics, the contract and players involved give the appearance of a conflict of interest.

Gee, no, ya think? Pushing for $284.5 million in public subsidies for a new hockey arena, quitting your public-sector job, then going to work for the hockey arena and being paid out of that same $284.5 million … I can’t see why anyone would think that would appear to be a conflict of interest. Or why Jackson would need to write a typically cranky and defensive press statement about the whole matter:

“I left public service well over a year before my firm accepted a private client,” he said in the written statement. “Why should I be denied the opportunity to earn a living in my hometown, when I have skills, experience and knowledge that can be put to good use — and will create jobs and opportunities for other Detroiters?”

I don’t know, maybe because this is exactly why “revolving door” laws exist, so as to insure that government officials are doing what’s best for the public, and not what’s best for their next client? But, hey, “jobs and opportunities,” so let’s not think about that too hard.

Red Wings owner Mike Ilitch just wrote John Oliver’s show for next week

If you slept through the last week, this headline from Detroit Curbed probably has you utterly baffled:

Ilitch Responds to John Oliver’s Critique of Stadium Deal

Yes, that’s the owner of the Detroit Red Wings (and Detroit Tigers, and Little Caesar’s Pizza) issuing a press statement in response to an HBO comedian’s criticism of his deal to get $300 million in public subsidies for a new hockey arena. And what was Ilitch’s response?

“This project is about so much more than a world-class sports and entertainment arena; it’s about transforming a core part of our city for the benefit of the entire community,” the statement said. “The new Detroit arena and The District Detroit will create 8,300 construction and construction-related jobs, as well as at least 1,100 permanent jobs. To date, the Detroit Downtown Development Authority has approved nine contracts worth $121 million, of which Detroit-based and -headquartered businesses have won more than 88% — or $106 million. Initiatives of this size, scope and impact — $1.8 billion dollars for our city, region and state — are almost universally public-private partnerships. The majority of this development is being privately financed, and no City of Detroit general funds are involved whatsoever.”

That doesn’t actually counter any of Oliver’s criticisms, which amounted to pointing out that 1) Ilitch is getting $280 million in public funds, 2) Ilitch is worth an estimated $5.1 billion, 3) Detroit filed for bankruptcy the week before all this was approved, and 4) Little Caesar’s Crazy Bread sucks. In fact, the majority of the development is not privately financed (it’s 58% public, even by the Detroit Free Press’s conservative math), and while city general funds aren’t being used, development funds that would otherwise go to other city projects are, as is a gift of free city land.

In short: Watch John Oliver’s show next week, because he just got handed a whole lot of new material. Thanks, funnyman Mike Ilitch!

Stadiums can be anchors for related development, say newspapers in search of cheap headlines

You know what I missed while I was away? Having the time to read long, misinformed articles about new stadium projects and how they’re just totally different from those old bad stadium projects of a couple of decades ago. Got anything like that for me, Google News?

With the era of standalone, isolated stadiums largely over, sports team owners increasingly are taking on the role of developer and using their stadiums as anchors for entertainment districts or retail and residential developments.

Oh, yeah, that’s the stuff.

The article in question is from the Tampa Tribune’s Christopher O’Donnell, and argues that this newfangled stadium-plus-other-development model being used by teams like the Atlanta Braves and Detroit Red Wings (or “Redwings,” as he calls them) could be used by the Tampa Bay Rays for a new stadium as well. It ignores the fact that these stadium-plus projects aren’t especially new, going back well over a decade (the St. Louis Cardinals‘ “ballpark village” was one of the earlier ones, but I’m sure I’m forgetting others), and mostly ignores, aside from a comment by stadium architecture consultant Philip Bess (who O’Donnell calls “Phillip” — fired all the copy editors, did you, Tampa Tribune?), the problem that if development around a stadium were profitable enough to pay off a stadium, teams would be able to pursue this strategy without public subsidies. Not to mention that if stadium-related development is profitable it could be pursued without the money suck of a new stadium attached, that it could just end up displacing development that otherwise would have taken place somewhere else in town, that development around stadiums has typically appeared years late when it shows up at all, etc., etc.

Anyway, good to see that these articles still pop up every once in a while for me to throw rocks at, and — whoa there!

The new Minnesota Vikings football stadium, to be completed a year from now, is helping draw nearby office towers, upscale housing and other developments, according to its supporters.

Guys! One article at a time, please! I’m still getting back up to speed here.

Red Wings almost ready to build new taxpayer-subsidized arena, are Pistons next in line?

The Detroit Historic District Commission is set to vote this afternoon on whether to allow Red Wings owner Mike Ilitch to demolish the historic (but long-vacant) Park Avenue Hotel to make way for his arena district construction project, which promises to draw to a close the city’s debates about sports arena construc — oh, come on now, seriously?

Pistons owner Tom Gores launched Project “Big Math,” a sweeping idea for change and economic growth for the city of Detroit and state of Michigan, when he hired agent Arn Tellem last week as vice chairman of Palace Sports and Entertainment.

One of Tellem’s first agenda items when he takes over Aug. 3 is to explore bringing the Pistons downtown from Auburn Hills. … The Pistons have two viable options. They can move into the new Red Wings arena, which is scheduled to open in 2017, and share it with Olympia Entertainment. There is also a Hail Mary option to tear down the half-built Wayne County Jail and build an arena in conjunction with Quicken Loans chairman Dan Gilbert.

This is still pretty much just at the rumor stage — and the Pistons say they have “no plans” to move from Auburn Hills, for what it’s worth — but still, there’s at least the chance that Detroit may end up talking about building not one but two downtown arenas. Not bad for a city that’s bankrupt. Or, looked at another way, not good.