The Pistons could move back to downtown Detroit as soon as next year

The details are still being sorted out, but the Detroit Pistons could reach a handshake agreement with Olympia Entertainment within a matter of days to return to downtown Detroit as early as the 2017-18 season, according to Bill Shea of Crain’s Detroit.

There have been whispers of the Pistons wanting to get back to Detroit proper and a big marketing push to associate the team with the city, but it wasn’t until late September that talks escalated. Quickly. Within the space of a month, the team moved into “serious talks” with Ilitch Holdings, the family that owns Olympia Entertainment, as well as both the Red Wings and Tigers. Although a deal could still fall through, an agreement looks increasingly likely.

This is, of course, fantastic news to city residents if the Pistons do come back to Detroit. They are the only franchise of the four major sports in Detroit to not be located in the city — rather, they’re at The Palace in Auburn Hills, about 45 minutes north of downtown. But even with a handshake agreement, Shea notes that any formal announcement will “take months to sort out.”

Why now?

Little Caesars Arena is set to open in the fall of 2017 in downtown Detroit. The arena, built to be the home of the Red Wings, will be the centerpiece of a development known as “The Detroit District.” It sits between the city’s main artery, Woodward Ave., and near the city’s football and baseball stadiums, as well as several of its hottest neighborhoods.

The vision for the development is a mixture of residential and commercial developments creating “50 blocks of thriving businesses, parks, restaurants, bars, and event destinations.” Investment in The District has already eclipsed more than a billion dollars, and downtown Detroit has seen several billion dollars of investment as it continues to bounce back from its decades-long economic woes.

For the Pistons, a return downtown makes sense. Former owner Bill Davidson moved them from the city to the suburb of Auburn Hills in 1978, three years after the Lions left for the nearby suburb of Pontiac. Since then, the Lions have returned downtown, which has again become a destination for the metro area.

Sharing a new arena downtown rather than attempting to build a second one is the logical step. For the Ilitch family and Olympia Entertainment, assuring thousands of fans are visiting your billion-dollar development at least another 41 times a year is good business sense.

At what cost?

The $627 million development is being funded through a mixture of private and public investment. Detroit’s Downtown Development Authority sold bonds worth $250 million backed by taxpayer money that will be paid off during a 30-year period. The rest of the project is being funded by private investment, including at least $200 million by Olympia Entertainment.

Ground broke on the project in Sept. 2014, and construction is now shifting from the larger structural pieces to the interior. If the Pistons intend to move downtown without building their own stadium — which seems likely given most cities with NHL and NBA teams have just one arena — now is a perfect time to do it while the stadium is still under construction and there is time to properly plan for two teams to call it home.

What happens next

Returning the Pistons to Detroit will take some doing. With construction of the Red Wings’ new arena less than a year removed from completion, both sides will need to reach an accord quickly to account for construction specifications befitting both sports.

For now, both franchises continue talks while Pistons owner Tom Gores will be on-site in Auburn Hills when the team opens its season at home — possibly for the last time, if the agreement goes through. Any modifications must be formally approved by the NBA and Detroit’s Downtown Development Authority.

The urgency to the talks has picked up because the new arena is less than a year from completion, and the Pistons’ needs for locker rooms and other facilities would be more cheaply addressed now rather than after the building is open.

Parking would also be a factor, and Detroit is already crowded for space as it is. The in-progress 3.3-mile M-1 Rail system (also known as the QLINE) should be completed by spring 2017. Even with that, though, most fans prefer to park downtown and that will clog up the streets from August through March. There is also construction underway to build a parking garage across the street from Comerica Park, home of the Tigers baseball team.

But the biggest addition will be a $24.4 million parking garage within walking distance of the hockey arena, which helped put Ilitch Holdings over the project’s $200 million minimum spending line. The garage will feature 500 parking spots with space for business offices in the future, as well as allow for 7,000 square feet of “ground-floor retail space.”

Gores is also attempting to find a land plot north of Little Caesars Arena to build the team’s new 60,000 sq.-ft. practice center and headquarters, according to Crain’s. Both sports would need to account for overlapping schedules, but that’s not an uncommon theme for NHL and NBA teams and shouldn’t be an issue. Lastly, there are possible broadcasting rights to work out.

... the talks are expected to address longer-term issues such as how longtime competitors Olympia and PS&E will co-exist — a joint venture overseeing all of their respective venues is an option — and possible cooperation on future local broadcast rights deals. In theory, the teams could jointly work out deals, along with the Ilitch-owned Detroit Tigers at nearby Comerica Park, or even form a new network.

What about the Palace?

There’s nothing stopping the Pistons from immediately leaving the arena, owned by Gores and featuring no corporate naming rights. In fact, Gores is already attempting to sell the arena, although he did recently sink $40 million into making improvements in it.

Crain’s Detroit reported on Monday that Oakland County, where the Palace is located, rejected an offer to buy The Palace for $370 million, a price higher than the $325 million the Pistons’ owner paid for the franchise, arena, and several concert venues combined. Gores hoped to sell the arena and lease it back. Beyond the Pistons, the arena frequently plays host to A-list concerts and could continue to be used for that purpose, although it’s expected much of that business will be lost when the better-located Little Caesars Arena remains. However, citing the disuse and decay of the former Pontiac Silverdome, the county did not believe it would be a wise investment to buy The Palace.

The Palace, which was privately funded by Davidson and opened in 1988 at the peak of the “Bad Boys” era, could also be torn down entirely. The North American headquarters for automotive maker Fiat Chrysler is located in Auburn Hills, and many automotive suppliers are located in the area, making the 103 acres a valuable piece of land to the city.

Manager of business development and community relations Stephanie Carroll told the Oakland Press that the area would generate more tax revenue used in a different manner:

“So if potentially there were redevelopment to happen at that site and just looking at the size of the land and the desire for companies to be next to their suppliers and in Auburn Hills, that site could generate about four times as much tax revenue than what we’re currently receiving,” Carroll said.