The Detroit Pistons of the National Basketball Association (NBA) are set to relocate to downtown Detroit after agreeing memoranda of understanding that will see them move to the under-construction Little Caesars Arena from next season.
The move will see the Pistons share the US$627 million venue with the Detroit Red Wings National Hockey League (NHL) team, and also includes the construction of a new practice facility and corporate headquarters.
Pistons Owner Tom Gores, Detroit mayor Mike Duggan, NBA commissioner Adam Silver and Christopher Ilitch, president and chief executive of Ilitch Holdings Inc, owners of the Red Wings, held a news conference on Tuesday to confirm the relocation, which remains subject to NBA approval.
"This is a historic day for our franchise, and for the City of Detroit," said Gores. "We're moving to a beautiful new arena that will provide a state-of-the-art fan experience, and we're investing in the future of Detroit.”
The Pistons, who are currently playing their 29th and final season at The Palace of Auburn Hills, which is located around 30 miles from downtown Detroit, are due to present the agreement to the NBA's board of governors next spring. Before then, formal legal agreements and other elements of the move will need to be finalised between Palace Sports & Entertainment (PS&E), owners of the Pistons, and city authorities.
Under the agreement, the Pistons and the Red Wings will remain separate entities with separate business operations. However, PS&E and Ilitch Holdings plan to form a joint venture to run their sports and entertainment venues, including Little Caesars Arena, The Palace of Auburn Hills and Comerica Park, home of the Detroit Tigers baseball team.
Meanwhile, Detroit’s Downtown Development Authority (DDA) has agreed to contribute US$34.5 million to ensure Little Caesars Arena, which is slated to open next September, can accommodate NBA basketball.
According to the Pistons, at least 50 per cent of the DDA contribution will be generated through refinancing bonds issued by the state of Michigan to partially fund Little Caesars Arena. The remainder will come by extending the term of these bonds by an additional three years. Any cost overruns or additional expenses will not be covered by the DDA or taxpayers.