City of Auburn Hills ready to move on if Detroit Pistons move downtown

The City of Auburn Hills appears to be ready to move on from the Detroit Pistons.

In a press release issued by Mayor Kevin McDaniel’s office, it stated that “it does appear inevitable that the Detroit Pistons will be leaving (the Palace of) Auburn Hills.”

“While I am disappointed to hear (Pistons owner Tom) Gores talk in terms of a likely departure, I am proud of the fact that we have been their hometown since 1988,” said McDaniel, who has been mayor of Auburn Hills since 2013. “It has always been our position that the arena’s private ownership is a model that should be duplicated throughout the country. The private sector built it, and the private sector profited from its operation.”

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Gores told reporters Friday they were close to reaching a deal to move the team from the Palace to Little Caesars Arena at I-75 and Woodward Avenue.

He also noted the move to downtown Detroit could happen as soon as next season.

Former owner Bill Davidson had originally built the Palace for $90 million out of his own pocket. The 28-year-old arena has also had more than $40 million in upgrades made to it since Gores bought the franchise in 2011.

If the Pistons do in fact move, the city could be in a better financial situation without the team.

Per Crain’s Detroit Business:

"“We have estimated that depending upon what might get built at that location, and the potential is great, that the tax revenue generated could realistically be at least three times that of the revenue currently produced from the properties,” Auburn Hills City Manager Thomas Tanghe told Crain’s via email."

The Palace and its related properties brought in $1.1 million in tax revenue in 2015, according to Crain’s, $265,271 of which went to the city’s general fund. Auburn Hills’s overall budget is $56.1 million this year.

Tanghe told the news outlet the site’s tax revenues could increase to more than $3 million if they redeveloped the Palace site.

Auburn Hills will also not offer the Pistons any tax breaks or subsidies to stay in the city.

Feb 22, 2015; Auburn Hills, MI, USA; Detroit Pistons owner Tom Gores in attendance during the game against the Washington Wizards at The Palace of Auburn Hills. Mandatory Credit: Tim Fuller-USA TODAY Sports

The city noted that the municipality is a “sought-after address for many high-tech companies who choose to build U.S. and world headquarters in Michigan, and the location of the Palace along I-75 is excellent highway frontage for those companies seeking that kind of exposure.”

McDaniel also made it clear he and city council would work with Gores and his organization, Los Angeles-based Platinum Equity.

“To us, this is disappointing but it also provides us with new opportunities,” McDaniel said. “My colleagues on City Council and I have the utmost confidence in our leadership team to work with Palace ownership should they discontinue use of the Arena or elect to redevelop the site.”

Gores told the media last week he also wants the maintain their business relationships with the city and its fan base in Oakland County:

"“I think we have to be really mindful of this community, and Auburn Hills and their loyalty in showing up,” Gores said during Friday’s news conference. “I want to pay attention to them. I want to respect them for all the years of attending, and so on. This has been a real community. I feel the same wherever we’re playing.”"

While a growing number of people are expecting the Pistons to reach an agreement with Olympia Entertainment soon, any move would still have to be officially approved by both the NBA and by Detroit’s Downtown Development Authority.