Detroit Update: On the Pistons Moving to Little Caesars Arena, and New Soccer Stadium

[Zacha341]

The announcement was held at Cass Technical high school this afternoon. It was a big event, indeed!

‘The right move’: Pistons returning to Detroit

http://www.detroitnews.com/story/spo...roit/94291544/

[michmina]

MMMM, I'm pretty sure the players will keep living in the 'burbs...

[ParisianLesion]

MMMM, I'm pretty sure the players will keep living in the 'burbs...

Not necessarily. If you're young with money and no kids, Detroit's the hottest place to be in the region right now.

[softailrider]

What a waste of money, if they follow thru and demolish the Palace, and sell the land to a auto supplier. I mean, Gores just spent millions on updating the suites and other improvements. If they were looking at moving back downtown the whole time, why invest the money?

Even with attendance way down from the glory days, I'm sure Gores got all his money back and then some from parking, nine dollar beers and lots of other stuff. I wouldn't feel too bad for him, he knows what he's doing.

[TTime]

Here's Deadspin's take http://deadspin.com/pistons-to-aband...h-r-1789280893

[canuck]

Here's Deadspin's take http://deadspin.com/pistons-to-aband...h-r-1789280893

Pistons Shafting Detroit. Engine Check light is on.

[royce]

Great news for Detroit and the Pistons. However, I'm not understanding why up to $40 million of taxpayer money is being used to accommodate the Pistons move. What adjustments to the new arena would be needed at this point? Or, is the cost of a new practice facility and corporate headquarters a part of the $40 million? Can someone shed some light on this for me? Thx.

[401don]

Great news for Detroit and the Pistons. However, I'm not understanding why up to $40 million of taxpayer money is being used to accommodate the Pistons move. What adjustments to the new arena would be needed at this point? Or, is the cost of a new practice facility and corporate headquarters a part of the $40 million? Can someone shed some light on this for me? Thx.

Facilities are so elaborate it seems it doesn't take much to spend 40 million these days. New locker rooms [[these things are palaces-no pun intended), weight rooms, new signage, slight changes to seating, etc. However the articles clearly state the practice facility will be separate bonds backed by the Pistons.

[Atticus]

Great news for Detroit and the Pistons. However, I'm not understanding why up to $40 million of taxpayer money is being used to accommodate the Pistons move. What adjustments to the new arena would be needed at this point? Or, is the cost of a new practice facility and corporate headquarters a part of the $40 million? Can someone shed some light on this for me? Thx.

Not justifying the "who" is paying for it part, but there are some arena changes needed as part of this deal. These changes include:

-New larger and fancier locker room for the Pistons [[and possibly for the visiting NBA team as well). Yes there was going to be some standard bland locker rooms for college basketball useage, but with an NBA team you need a large, posh locker room for the team that takes up a bigger footprint on the main floor. Par for the course in the NBA.

-Pretty much all NBA arenas have deluxe court side seating, with a VIP lounge and entrance to the court side seats separate from the "commoners" in the lower level. This is different from hockey in that row 1 for NHL is just seats along the glass, so there is some logistical reworkings needed for that as well.

-Both of the items above require reworking the arena level floor plan to make everything "fit", and it can get expensive because things like elevator shafts, plumbing and utilities, walls, and even a structural component or too need to get moved [[basically, things that have already been built have to be redone).

-Finally, there is also the decorative elements that have to be reworked. Imagine if half of the "Tiger" artwork, references, and history around Comerica park had to be moved or removed to split with another team. That is what is happening here, and while most of that aspect has not been built yet, most of the aesthetics that were RedWings only need to be redone. This includes the names of the concessions stands, to the embedded RedWings logos in the seats, to the banner placement in the ceiling, and on and on.

[401don]

Not a soccer fan myself, but I have to say I'm pretty impressed that Montreal packed 61,000 into crappy old Olympic stadium for an MLS playoff game against Toronto last night. Even though the players & fans hate artificial turf the league has accommodated it where necessary. You could see a high demand playoff game moved into Ford Field some day.

[EGrant]

Not a soccer fan myself, but I have to say I'm pretty impressed that Montreal packed 61,000 into crappy old Olympic stadium for an MLS playoff game against Toronto last night. Even though the players & fans hate artificial turf the league has accommodated it where necessary. You could see a high demand playoff game moved into Ford Field some day.

That was awesome to see. As a Sounders fan, I love when they open up the whole Century Link Field for big games. Correct me if I'm wrong, but I think the actual playing surface at Ford Field is too small. They can host exhibition games there [[USWNT), but not real games. Heck, the NYCFC plays in Yankee Stadium; maybe we could see a game or two in Comerica Park [[yuck).

[Cincinnati_Kid]

Even with attendance way down from the glory days, I'm sure Gores got all his money back and then some from parking, nine dollar beers and lots of other stuff. I wouldn't feel too bad for him, he knows what he's doing.

Oh, I agree. I don't feel sorry for a Billionaire. I was just stressing the point, that what seems wasteful to me, isn't looked upon that way to a businessman. I'm sure he's made more than his fair share of a return on his investments. You don't get rich, being a dummy.

[corktownyuppie]

We need to be really careful with the words "Taxpayer Funding".

Is the funding a gift? Or is it a loan to be repaid?
If the funding is not a loan, who will be the final owner of the asset?
Is it taxpayers from the general fund? Or is it taxpayers inside of downtown?

I'm not taking a side [[at least right here) regarding this specific project. What I can tell you is that a lot of people hear "taxpayer funding" and think that someone living over on 6 and Livernois is writing a check to a billionaire's pocket.

That may or may not be the case.

If the city uses X Million dollars to purchase a building that they will *own*, and then they turn around and rent that building to a company, that is *not* the same thing as writing a check to the company so that the company can own the building.

There are good [[generally hyper-conservative) arguments saying that the city shouldn't own or lend to projects. There are fair points to be made there. Just know that this isn't as simple as saying that Mike Duggan just wrote a million dollar check to Mike Illitch and Tom Gores using taxes collected from poor people. That's just straight up incorrect.

[Detroitdave]

Soooo, now that its official. It's a pretty sure bet that a new hotel WILL be built.
With the Pistons and the Red Wings and all the concerts .A new 4 or 5 star hotel is a must !
You can't have a brand new arena and no where to host the guest.
If I was a betting man I bet %99 sure that a nice new fancy hotel is coming soon.
Any one wanna take a bet ?

[hybridy]

We need to be really careful with the words "Taxpayer Funding".

Is the funding a gift? Or is it a loan to be repaid?
If the funding is not a loan, who will be the final owner of the asset?
Is it taxpayers from the general fund? Or is it taxpayers inside of downtown?

I'm not taking a side [[at least right here) regarding this specific project. What I can tell you is that a lot of people hear "taxpayer funding" and think that someone living over on 6 and Livernois is writing a check to a billionaire's pocket.

That may or may not be the case.

If the city uses X Million dollars to purchase a building that they will *own*, and then they turn around and rent that building to a company, that is *not* the same thing as writing a check to the company so that the company can own the building.

There are good [[generally hyper-conservative) arguments saying that the city shouldn't own or lend to projects. There are fair points to be made there. Just know that this isn't as simple as saying that Mike Duggan just wrote a million dollar check to Mike Illitch and Tom Gores using taxes collected from poor people. That's just straight up incorrect.

the palace was privately funded. why continue to soak Detroit taxpayers for the benefit of 60 courts and some free tickets? the pistons are not doing anything charitable by coming downtown...they're doing it because it makes financial sense for them to do so.

[corktownyuppie]

What exactly did you mean by below? And which Detroit taxpayers?

soak Detroit taxpayers

[hybridy]

What exactly did you mean by below? And which Detroit taxpayers?

just connecting the dots my friend:

http://deadspin.com/detroit-scam-cit...-fo-1534228789

In December 2012, the Michigan legislature restored Detroit's ability to levy school-tax funds from the downtown district for economic development purposes. If that $12.8 million annual gift weren't going to the Illitch empire, it would go to the state's School Aid Fund.

This is not to say that the arena will take money out of Detroit Public Schools [[DPS) general fund. "The state is making up the shortfalls," said Bob Rossbach, spokesperson for the DDA. "So there is no difference to a student in Detroit Public Schools whether this money is refunding bonds or goes directly into the DPS budget." But it is diminishing the state's School Aid Fund by diverting the taxes for "economic development" purposes. Something, somewhere, is taking a hit.

http://www.detroitnews.com/story/new...ized/87455048/

The $150 million loan will be used to transition Detroit Public Schools to the new Detroit Public Schools Community District created under the $617 million rescue package approved last month by state lawmakers.Of the total loan amount, $125 million will be used to pay obligations incurred by the old DPS, including June payroll, paychecks for teachers who spread their annual wages over 26 paychecks and vendor liabilities, the district said in a news release. The remaining $25 million will be transferred to the new DPS, with $8 million for academic initiatives, $10 million for facilities, $2 million for safety and $5 million to provided a minimum cash balance.
The interest rate for the loan is 1.3 percent, the district said. The loan will be paid back through the 18 mil nonhomestead property taxes, as authorized by the rescue legislation.

[Jason]

From my understanding the money is coming from the TIF zone, where the current amount of money from property taxes is noted, and the new additional property tax money in that area will go towards the arena. The presumption is that most of the land value increases in that area will be from the arena itself. If the arena is not built then the property values do not go up like they would have, so that extra tax money wouldn't exist. If the arena is built, then the new tax money goes toward the arena itself and after that's done then the city gets more property taxes than it would have without the arena. In the longterm the city makes more money.

And my understanding of the school money stuff is that they would need permission to have the property tax money go to the TIF instead of the schools. If you had two alternate realities, one where the arena/TIF didn't exist [[status quo, no change in property values), and one where it did [[property values increase but the new money is directed back to the arena), I believe the money the schools would be getting from that area's property taxes would be the same.

But that's just my understanding and I'd be happy to be corrected if I'm wrong.


Also I think $40 million to get the Pistons downtown is a good value. It won't take very long for the extra economic activity to cover that. It would have been better if they had figured this out before construction, but whatever.

[Cincinnati_Kid]

the palace was privately funded. why continue to soak Detroit taxpayers for the benefit of 60 courts and some free tickets? the pistons are not doing anything charitable by coming downtown...they're doing it because it makes financial sense for them to do so.

It makes financial sense for Gores and Illitch. They will be the only true benefactors. Illitch owns restaurants, bars and other properties that will also see more activity. What I'm wondering is what are they going to do about parking, which is already limited and overpriced? Are they going to build additional structures, or are they going to let individual vendors, continue to price gouge people? Instead of $20.00 to park, it might just double. Remains to be seen.

[corktownyuppie]

That's all wonderful, but "economic development" isn't a gift to rich people It's trading $1 in city money today for $2 in city money tomorrow. Who owns the arena? Not Illitch. Not Gores. It's the city. So they're converting city taxes into a city asset that generates more taxes.

Hey, if I can trade $100 in taxes today in exchange for $20/yr in new tax revenue every year going forward, you'd be dumb not to do it.

just connecting the dots my friend:

http://deadspin.com/detroit-scam-cit...-fo-1534228789



http://www.detroitnews.com/story/new...ized/87455048/

[EGrant]

That's all wonderful, but "economic development" isn't a gift to rich people It's trading $1 in city money today for $2 in city money tomorrow.

I get that and agree with you, but the argument is that the city shouldn't have to trade any dollars up front, when you have two billionaires involved. Yes, that ignores the nuances of the actual funding, but it's a point worth raising.

[emu steve]

From my understanding the money is coming from the TIF zone, where the current amount of money from property taxes is noted, and the new additional property tax money in that area will go towards the arena. The presumption is that most of the land value increases in that area will be from the arena itself. If the arena is not built then the property values do not go up like they would have, so that extra tax money wouldn't exist. If the arena is built, then the new tax money goes toward the arena itself and after that's done then the city gets more property taxes than it would have without the arena. In the longterm the city makes more money.

And my understanding of the school money stuff is that they would need permission to have the property tax money go to the TIF instead of the schools. If you had two alternate realities, one where the arena/TIF didn't exist [[status quo, no change in property values), and one where it did [[property values increase but the new money is directed back to the arena), I believe the money the schools would be getting from that area's property taxes would be the same.

But that's just my understanding and I'd be happy to be corrected if I'm wrong.


Also I think $40 million to get the Pistons downtown is a good value. It won't take very long for the extra economic activity to cover that. It would have been better if they had figured this out before construction, but whatever.

I like your post.

In D.C. the baseball stadium was paid for by a tax paid by businesses as well as a 'tax' on tickets, etc. sold at the stadium.

I remember reading that the revenue from these sources EXCEEDED the debt service and D.C. was making a 'profit' on the stadium [[so much for the councilmen who said it would cost the District's general fund money. Some, unbelievably, wanted to renovate RFK Stadium, a relic, with bad sight lines, etc. etc.).

As far as Detroit, anything which strengthens the District Detroit or downtown area is good for all in downtown. This is a case of a 'rising tide raises all boats.'

[emu steve]

I was in Detroit this week and had the opportunity to see all of the things happening around the arena*. I was impressed at how massive the development is, but also how well done. I loved seeing how the arena is 'encased' with other structures which negate the mass of the arena [[also the arena is much underground).

* Saw the Lions beat Vikings and EMU beat CMU to go 7 - 5 and part of the parade, etc. Great three days!!

[emu steve]

That's all wonderful, but "economic development" isn't a gift to rich people It's trading $1 in city money today for $2 in city money tomorrow. Who owns the arena? Not Illitch. Not Gores. It's the city. So they're converting city taxes into a city asset that generates more taxes.

Hey, if I can trade $100 in taxes today in exchange for $20/yr in new tax revenue every year going forward, you'd be dumb not to do it.

I was thinking of 'economic development' over the decades:

1). The Fox,

2). Comerica Park, home of the Tigers,

3). Ford Field, home of the DETROIT Lions,

4). Super Bowl,

5). Dan Gilbert goes big in Detroit,

6). LCA, home of the Red Wings,

7). LCA, home of the DETROIT Pistons

8). District Detroit, home of our four pro teams and maybe soccer, too.

I see a common thread in these seven or eight, namely, the economic development effects of pro sports in Detroit.

But, maybe more significantly, is the sequential nature of them and how the they all build on each other. Other than the Fox, all have/are happening within the last 20 years.

[stasu1213]

I like your post.

In D.C. the baseball stadium was paid for by a tax paid by businesses as well as a 'tax' on tickets, etc. sold at the stadium.

I remember reading that the revenue from these sources EXCEEDED the debt service and D.C. was making a 'profit' on the stadium [[so much for the councilmen who said it would cost the District's general fund money. Some, unbelievably, wanted to renovate RFK Stadium, a relic, with bad sight lines, etc. etc.).

As far as Detroit, anything which strengthens the District Detroit or downtown area is good for all in downtown. This is a case of a 'rising tide raises all boats.'

Maybe this will be the first time that council couldnt get their grubby hands on funding. End of play to pay