Deal to bring Pistons back to city takes another step

Jennifer Chambers, and Louis Aguilar
The Detroit News

Detroit — The complex deal that would bring the Detroit Pistons back to the city moved a bit forward Thursday when the City Council took steps to set up key votes in June that would help seal the agreement.

The Pistons aim to return to the city to play in the new Little Caesars Arena next season, which would be the first time the NBA team had its home court in Detroit in 35 years. It also plans to build a new corporate headquarters and practice facility in the New Center neighborhood.

On Thursday, the council’s Planning and Economic Development committee held a public hearing on the Pistons’ headquarters and practice facility. It will be a space jointly operated by Henry Ford Health. For now, the proposed new building is called Henry Ford Health System-Detroit Pistons Performance Center.

The committee voted Thursday to send the proposal to the full council, which will take the matter up at its June 6 meeting. A separate issue about tax incentives that are part of the deal will be discussed June 22.

Among the main concerns expressed by council members and some Detroit residents Thursday were jobs for city residents and the tax incentives involved in the deal.

Awenate Cobbina, director of business affairs for the Pistons’ owner, Palace Sports & Entertainment, told the committee that 120 temporary jobs and 150 permanent jobs would be part of the new practice facility/corporate headquarters.

Cobbina told the council the 150 full-time jobs were all occupied by current Palace employees who work in Auburn Hills now.

“When we move to Detroit, we intend ... to maximize the hiring of Detroiters,” Cobbina said.

Detroit City Council president Brenda Jones said she wanted something in writing about the Piston’s commitment to hiring Detroit residents.

“I’m committed to getting something that says a percentage of Detroiters should be hired. I’m asking for some type of percentage,” Jones said.

The cost to build the Henry Ford Health System-Detroit Pistons Performance Center is expected to be more than $83 million. The proposed 100,000-square-foot facility would be built between Second and Third avenues, north of Amsterdam and south of the railroad tracks.

The New Center facility will proceed only if the Pistons get the approval needed to play at Little Caesars Arena, which will be the home ice of the Detroit Red Wings. The city, state and National Basketball Association all must sign off on the deal.

Kevin Grigg, Pistons vice president of public relations, said in an email Thursday that the practice facility will be privately financed and “we continue to work through all the necessary approvals.”

Beyond the practice facility, several members of council raised concerns with how many public dollars have gone into the Little Caesars Arena project and what they would get in return. So far, about 62 percent or nearly $539 million of the 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.

City Councilwoman Raquel Castaneda-Lopez said she thinks Detroit should get a cut of the revenues expected to come out of the Pistons moving to Detroit.

She suggested the city seek a 1 percent revenue cut from concessions. Castaneda-Lopez said she is not speaking of a tax but a slice of revenues.

“Given the amount of public dollars going in, I still think we need to approach the conversation. The fact the Pistons would be the only team to do this and to say no one has done this before is a weak argument,” she said.

Pistons could get tax breaks to help build the new practice facility. A tax abatement reduces the amount of property tax that the Pistons owners would pay.

If approved, a commercial tax abatement would lock in property taxes for 10 years, said City Councilman Scott Benson. Two personal property tax abatements could save Palace Sports & Entertainment and the Pistons a total of $476,000 based on a $5 million investment.

Another option is a tax capture, or tax increment financing, to help pay for a potential parking deck, according to city officials. Tax increment financing is the ability to use increased local tax property revenues from a new development.

Linda Campbell, with the Community Benefits Agreement Coalition, was at the hearing and said she think the Pistons organization can offer a better deal to the city and its residents.

“It’s shameful what the Pistons are offering in exchange for a horrific amount of tax dollars,” Campbell said at the public hearing. “Our challenge to the Pistons is to negotiate a better deal.”

Diane McMillan with the Neighborhood Advisory Council, said more time is needed to negotiate a community benefits plan with the developer. .

“We are very concerned about jobs,” she said.

Little Caesars Arena, where the Pistons will play their games next season, is scheduled to open in September.

Staff writers Candice Williams and Christine Ferretti contributed.