It appears as though the celebration of the Detroit Pistons relocating from Auburn Hills to downtown Detroit for the first time in decades could potentially be premature.
A federal lawsuit which aims to block public funding of a new Pistons headquarters downtown as well as Little Caesars Arena has moved forward. The ultimate result could force the Pistons to reverse their plans to play in the city of Detroit.
The lawsuit was originally filed by Robert Davis, a government transparency advocate along with D. Etta Wilcoxon, a Detroit City Council clerk. The pair say that the project shouldn’t be publicly funded without being first voted upon by residents of the city.
“It’s very important because you (the DDA) are using the tax dollars of the residents of the city of Detroit and the county of Wayne to finance two billionaires’ projects and you’re taking money from institutions that are in dire need of these resources,” Davis said regarding the lawsuit. “That simply does not make sense.”
On Thursday, a motion was filed by the city of Detroit, the Downtown Development Authority, City Council, and others to throw out the case. Needless to say, they warned of the damage that they believe would occur should the Pistons reverse their intentions to play in the city.
“Plaintiffs’ delay threatens to cause massive harm to Defendants and to the city of Detroit,” the attorneys wrote. “The loss of tax increment financing at this critical moment could upend the complex financial package supporting the Pistons’ move to Detroit, and the resulting changes could cause the Pistons to reverse their plans. The loss of the Pistons would cost Detroit millions of dollars in tax revenue and would threaten the burgeoning growth of the city’s entertainment district. Unrelated to the 2016 amendments to the project, an adverse ruling could cause a default on $250 million in outstanding DDA bonds.”
The attorneys continued:
“…The City of Detroit is writing a remarkable comeback story,” they wrote. “One of the most exciting chapters in the city’s rebirth is the imminent completion of a new state of the art arena for the Red Wings, with accompanying retail, office and residential development and the anticipation of the Pistons returning to Detroit after a 40 year hiatus.”
A new DDA amendment proposal that council will be voting for on June 20 would issue an additional $34.5 million in bonds in support of the Pistons move back downtown. The estimated cost of the project has increased from $450 million to $862 million, and is anticipated to be 62% privately funded and 38% publicly funded.
But according to the DDA Act, before council can vote on the amendments, notices should have been sent to all property taxpayers of record in the downtown district no less than 20 days before the May 25 hearing. Davis is arguing they weren’t properly mailed, and that because of that, the city council can’t move ahead with approving the proposed DDA amendments.
“… Upon a close examination of the certified mail receipts, it is clear that the notices were not properly sent to the governing bodies of the taxing jurisdictions as the statute requires,” Davis wrote. “Rather, the notices were sent to individuals other than the governing bodies of the taxing jurisdictions.”
Palace Sports and Entertainment Vice Chairman Arn Tellem is confident that the deal will get done, and that there is no chance of the team returning to Auburn Hills.
“There’s no chance of that happening,” he said. “Zero.”