Detroit — Just hours after the City Council approved key parts of a deal for the Detroit Pistons’ return to the city, a federal judge on Tuesday granted a hearing for a legal challenge that could delay the agreement and potentially get the council involved in the suit.
U.S. District Judge Mark Goldsmith set a June 19 hearing for the lawsuit that seeks to halt a scheduled June 20 vote at City Council regarding taxpayer-backed bonds of the Pistons’ deal.
The suit seeks to allow city and Wayne County voters, either in August or November, to decide whether tax money should be used to help pay for changes at Little Caesars Arena and the Pistons’ $83 million practice facility and corporate headquarters planned for the New Center area.
The suit, filed by Robert Davis and D. Etta Wilcoxon, contends Detroit residents have a right to vote on the bonds before councilmembers vote. Both Davis and Wilcoxon said at Tuesday’s hearing they aim to include City Council in the lawsuit.
Davis and Wilcoxon are suing two Detroit taxing authorities, contending they are illegally using tax revenues intended for the city’s public school students and Wayne County parks to finance construction of the facilities.
The federal lawsuit filed in U.S. District Court last week alleges the Detroit Downtown Development Authority and the Detroit Brownfield Redevelopment Authority have violated Wilcoxon’s right to vote by attempting to use tax revenue from an 18-mill DPS levy “for a different purpose” without first obtaining voter approval from registered voters.
The grab violates Michigan’s General Property Tax Act, the lawsuit alleges.
In the case of Detroit’s schools, the state reimburses the school district for any shortfalls that are the result of tax deals or other shortages. But other local entities that collect taxes do not get reimbursed.
Davis, a Highland Park resident and civil activist, alleges the two taxing authorities have violated his rights by attempting to use tax revenue generated from a Wayne County parks millage for the arena and headquarters.
Both Wilcoxon and Davis are asking the judge to block the Detroit Downtown Development Authority and the Detroit Brownfield Redevelopment Authority from individually and collectively using or capturing any tax revenue without first obtaining approval from registered voters of Detroit and Wayne County.
Detroit voters approved a 2012 millage renewal and restoration of the 18-mills.
In 2016, Wayne County voters approved the continuation of the county parks millage, dedicated to finance improvements to certain parks located within 43 communities in Wayne County.
So far, about 62 percent or nearly $539 million of the Little Caesars Arena project is from private financing and the rest — $324 million overall — is government financed.
The arena and other developments are estimated to cost a total of $862.9 million.