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Detroit council OKs bonds for Pistons move

Christine Ferretti, and Jennifer Chambers
The Detroit News

Detroit — The City Council approved $34.5 million in taxpayer-funded bonds on Tuesday to make modifications to the Little Caesars Arena to allow the Detroit Pistons to play there this fall.

The measure was passed 7-2 with Council President Brenda Jones and council member Raquel Castaneda-Lopez voting no.

The council took up the matter after a federal judge late Monday declined to issue a preliminary injunction that would have blocked the Detroit Downtown Development Authority from capturing taxes to pay for the bonds.

Approval of the bonds have cleared the way for the NBA’s Board of Governors to vote on the team’s move from Auburn Hills to Detroit at its next quarterly meeting on July 11.

After the vote, Jones said she does support the Pistons coming to Detroit, but “there are things I do not support.”

“That is looking at what happens past the Pistons just coming to Detroit and looking for the future and what happens in the future with Detroit, with employment, with education and to me, there is not enough guarantee in writing to what the Pistons will do for Detroiters past the fact of building and relocating the facility in the days to come,” she said.

District 5 Councilwoman Mary Sheffield on Tuesday noted she had several negotiations with the Pistons over additional community benefits. Some were included, others were not, she said.

“Was it the best deal? No, I don’t believe that it was,” she said. “But I do believe that as we move forward I will have ongoing negotiations with the Pistons to make sure that the residents in District 5 truly benefit from this development in the city of Detroit.”

Earlier this month, the panel voted 7-2 in favor of several associated agreements including a $20 million brownfield tax incentive, development plan and community benefits for the Pistons planned practice facility and headquarters. Jones and Castaneda-Lopez also cast the lone no votes.

The head of the Detroit Economic Growth Corp. on Tuesday credited the council for being able to “honestly and openly consider the merits of the plan before them” and not distracted by what he contends has been “misinformation that has been circulated in the media.”

“Instead, they focused on the facts of the plan, and those facts speak for themselves — significant economic benefits with no new taxes and no impact on city or public school operating funds,” said Glen W. Long Jr., chief financial officer and interim president and CEO of the DEGC.

Mayor Mike Duggan added the passage of the DDA bonds for the Pistons was a “bigger win” than the earlier court ruling.

“It’s a remarkable day,” said Duggan during a Downtown Detroit Partnership stakeholder meeting in the city.

On Monday, U.S. District Judge Mark Goldsmith, in a written opinion, said the plaintiffs in a lawsuit — activist Robert Davis and city clerk candidate D. Etta Wilcoxon — failed to demonstrate the right to vote guaranteed by the U.S. Constitution is being violated by the team’s move.

The pair sued the DDA, seeking a temporary restraining order against the tax authority and voter approval before tax dollars could be used for the arena.

The two have alleged the DDA and the Detroit Brownfield Redevelopment Authority are illegally using tax revenues intended for the city’s public school students and Wayne County parks to finance construction of the facilities.

Last week, attorneys for the taxing entities asked Goldsmith to toss the suit, alleging it could derail the project, prevent the team’s move to Detroit and cause “massive harm” to the city.

Davis on Tuesday said the battle is far from over.

In a court filing, he and Wilcoxon contend any decision made Tuesday by council regarding the DDA bonds violates Michigan’s Open Meetings Act and will be subject to invalidation. He’s also referenced plans to file a separate action in Wayne County Circuit Court over the panel’s decision on the bonds and the Pistons.

They also intend to appeal Goldsmith’s ruling on the injunction with the U.S. 6th Circuit Court of Appeals in the coming days.

“What happened today means absolutely nothing,” Davis said Tuesday. “It’s far from over, and I’m very confident in the end, the citizens of the city of Detroit are going to have a right to vote on the question.”

LaMar Lemmons, a board member of the Detroit Public Schools Community District, said Tuesday he is among several board members seeking to convene a special meeting Thursday to consider whether to put the measure before voters in November.

Lemmons said he feels “disrespected” by the council’s action on Tuesday and the developer “needs to do something for our children.”

“It has never even been presented to the elected members of the (school) board by City Council,” he said. “They have not conveyed to us what their intentions were or that we should come before them to express our collective opinion.”

The majority of the seven-member school board would have to vote in favor of the ballot initiative for it to proceed, Lemmons said.

The state reimburses the district through the School Aid Fund for any shortfalls that are the result of tax deals or other shortages. But other local entities which collect taxes, such as the Detroit Public Library, do not get reimbursed.

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.

Members of the public who spoke at Tuesday’s formal session were divided over the bond approval.

Rick Mahorn, a former Detroit Piston, was among those who spoke at public comment, urging council to “do their due diligence” to get the team downtown.

“It’s very intriguing, the city is getting back to where it used to be,” Mahorn told council. “This move for the Pistons is just wholehearted.”

But John C. Mozena, vice present for marketing and communications for the Mackinac Center for Public Policy, told council the deal is a bad one for Detroit.

This proposed subsidy for the Pistons is not good public policy,” he said. “It will not improve the lives of people in Detroit. It should not be approved by this council. They can do this without your help.”