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Pistons' practice space to be announced in 2 weeks

Louis Aguilar
The Detroit News

The Detroit Pistons hope to announce in the two weeks the Detroit location of their potential new corporate headquarters and practice facility, city officials said Thursday.

The revelation came during a Detroit City Council committee meeting, which was the next step in getting the deal approved to have the Pistons play in Little Caesars Arena next season.

“We were supposed to announce the location yesterday,” Tom Lewand, a key member of Mayor Mike Duggan’s administration, told the council subcommittee. But it was delayed by the death of Mike Ilitch, co-founder of Little Caesars Pizza and owner of the Detroit Tigers and Detroit Red Wings.

Lewand didn’t identify the location of the potential new corporate headquarters and practice facility, but said that Pistons owner Palace Sports & Entertainment LLC will get a tax break to help build the facility. “The final deal hasn’t been signed,” for the location, he said, but that is expected to change soon.

In November, the team and city officials said one possible spot for the new facility was on top of a parking deck next to the arena. Another site was still under consideration, but team and city officials declined to identify the location.

The potential new facility is part of the larger plan for the Pistons to play their home games in downtown Detroit, moving from the Palace of Auburn Hills in Oakland County. The team’s corporate headquarters and practice facility are currently at the Palace. Palace Sports & Entertainment employs about 300, officials said Thursday.

The new Detroit practice facility/headquarters will be built only if the Pistons get the approval needed to play at Little Caesars Arena, the still-under-construction venue that also will be the home ice of the Detroit Red Wings next season.

The Pistons owners will invest an estimated $95 million for the move, and up to $34.5 million in taxpayer-backed bonds will be used for construction and design changes of the arena, according to the latest copy of the potential agreement given to City Council last week. The public funding will come from a refinancing of the existing bonds to build the arena or the issuance of additional tax-exempt bonds, according to the potential agreement.

The Pistons practice facility and headquarters was described in November by the team owners and city officials this way: “A first-class ... practice facility and training center with multiple basketball courts, training, performance and rehabilitation facilities for Pistons players, and will serve as corporate offices and headquarters.” The cost to build the practice facility/headquarters was estimated at $32 million to $55 million in November.

The Pistons owners will get tax breaks to help build the facility, Lewand said. That could be tax abatement for 50 percent for 12 years. A tax abatement reduces the amount of property tax that the Pistons owners would pay. Another option is a tax capture, or tax increment financing, to help pay for a potential parking deck, Lewand said. Tax increment financing is the ability to use increased local tax property revenues from a new development.

The Pistons deal still needs various approval, ranging from the National Basketball Association to several city and state government bodies. Lewand said he hopes the city and state government approvals could be within 90 days.

The Thursday meeting at City Council committee was the first step in getting the council’s approval for the deal. The full council will began discussing the agreement between the city and the Detroit Pistons next week. Much of the discussion on Thursday was about strengthening the language in the agreement that will spell out the percentage of Detroit residents who could get hired by the Pistons organization, as well as the percentage of Detroit-based contractors who get hired for construction work.