NBA, Piston owners targeted in lawsuit over arena bonds

Christine Ferretti
The Detroit News

Detroit — Activists challenging $34.5 million in taxpayer-backed bonds to help fund the Detroit Pistons’ move to the city broadened their lawsuit Monday to include the National Basketball Association, Olympia Entertainment and the company that owns the basketball team.

The federal complaint against Detroit’s school district was filed last month by activist Robert Davis and Detroit City Clerk candidate D. Etta Wilcoxon in an attempt to stop taxpayer aid for the new Detroit basketball and hockey arena.

The pair argues the school board has the authority to place the matter on the November ballot and let voters decide whether the bonds should be used to make changes to the Little Caesars Arena to accommodate the Detroit Pistons. The pair contend the tax revenues are intended for public school students and Wayne County parks.

The tax revenue generated by the levy of the 18-mills Detroit Public Schools’ Operating Millage, they contend, cannot be used for a different purpose without the consent of a majority of Detroiters voting on the question at a regular or special school election, in accordance with the state’s Revised School Code.

On Monday, the complaint was amended to also target the NBA, Palace Sports & Entertainment, which owns the team, and Olympia, the entity that manages and facilitates construction of the arena.

“The reason why it was necessary for them to be added is because in two of the counts it addresses whether they can be reimbursed with tax revenue generated from the levy of the 18-mill school operating millage,” Davis said.

An emergency hearing is slated for July 19, Davis said. Among the issues to be debated is whether the school board has the statutory authority to place it on the ballot, he said.

Separately, the case was transferred Monday from the federal court’s chief judge to U.S. District Judge Mark Goldsmith, who had been presiding over a separate lawsuit over the bonds. The plaintiffs sought a voluntarily dismissal of that case to instead focus on the Detroit schools litigation, which they said would resolve the right to vote question.

Goldsmith on Friday denied a request by the city and Detroit’s Downtown Development Authority and other entities targeted in that suit to block the dismissal. The defendants had argued it was a ploy to drag out the case and “short circuit” the court system.