Vince Ellis

Detroit Free Press

►Update: Detroit Pistons are coming downtown: 'We want to be all in on Detroit'

After years of speculation, the Detroit Pistons are ready to announce their return to downtown Detroit.

Talks between Pistons owner Tom Gores and his representatives and the Detroit Red Wings, the Ilitch family and Olympia Entertainment have progressed to the point that an official announcement will come Tuesday, people with firsthand knowledge of the situation told the Free Press on Monday.

The Detroit Downtown Development Authority has called a special meeting for 2:30 p.m. Tuesday at Detroit Cass Tech High School. The Pistons' news conference is set for 3 p.m., also at Cass. In attendance will be Gores, Christopher Ilitch, Ilitch Holdings president and CEO, and Detroit Mayor Mike Duggan.

​►Related: Everything we know about the Detroit Pistons moving downtown

►Related: Pistons' move downtown vindicates those who stuck it out

►Related: Pistons' move downtown could bring nearly $600M, 2,000 jobs, study says

The Free Press reported late last month that the sides were close to an agreement in which the Pistons would move into the still-being-built Little Caesars Arena next season, sharing the new building with the Red Wings. The building is scheduled to open next fall and the Pistons would begin play there in 2017-18.

That would bring the likely end to the Palace, which has housed the Pistons since 1988.

With the Red Wings scheduled to move into new digs, the Pistons join the Wings in creating the 11th arena that houses both an NHL and NBA team.

The agreement likely goes beyond where the Pistons will call home.

• The Pistons will eventually sign a lease to move downtown and play in Little Caesars Arena. Early speculation is the lease terms will be for 25 years, but that’s unclear.

• They will move corporate offices, basketball operations and build a practice facility downtown at a still-to-be-determined site.

• The entities will likely join forces and combine the concert businesses of Palace Sports & Entertainment and Olympia. PS&E is the umbrella organization over the Pistons, the Palace and other music venues.

• A future area of cooperation could come in the merger of the media rights of the Tigers, Red Wings and Pistons, which could eventually materialize into a regional sports network similar to the New York-based YES Network. The Major League Soccer franchise Gores and Quicken Loans founder and CEO Dan Gilbert are expected to lure downtown would likely go under any TV agreement.

►Related: Tom Gores confirms Pistons 'very close' to move downtown, and soon

►Owner Tom Gores: Finish line near if Pistons are moving downtown

Gores takes over

Almost immediately after Gores completed his $325-million purchase of the Pistons and PS&E from Karen Davidson in 2011, whispers began that the Los Angeles-based billionaire from the Flint area would look to get his team downtown.

Things took on an urgency when longtime sports agent Arn Tellem was hired in the summer of 2015 as PS&E vice chairman.

He was given a number of tasks, but chief among them was to explore ways to partner with the Ilitches — including the possibility of moving downtown.

Tellem also was tasked with engaging in talks with Oakland County officials to discuss avenues to remain at the Palace.

The county had engaged the Pistons several times over the years about a potential agreement under which the county would acquire the facility, the team would sign a long-term lease to stay, and the two sides would share in capital expenditures on the facility, a source told the Free Press. But Oakland County balked with indications there wasn’t the political capital nor will, according to the source.

So the Pistons looked downtown.

Ilitch Holdings vice president and general counsel Stanford P. Berenbaum represented the Wings, Tigers and Olympia owners Mike and Marian Ilitch in negotiations.

The arena is a natural area of cooperation.

Talks have been under way for most of the year, but things were expedited when Gores met informally with Chris Ilitch at a basketball game toward the end of last season.

Issues resolved

To get to this point, both sides had to resolve issues. The arena was designed with home and visiting basketball locker rooms and facilities for expected college basketball events, but will have to be modified for NBA specifications. The Detroit Downtown Development Authority has to approve any added expenditures for those modifications.

But there were other areas to work through.

The arena suites have already sold out so how does that affect incoming Palace suite customers? Are they an integrated buy, will they be upsold or will they be separate? How do you integrate season tickets, sponsorships and sales organizations? What will the locker room look like?

The talks had a heightened sense of urgency because the arena, located just north of downtown, is quickly nearing completion. The window for easier and less costly adjustments is quickly closing.

The Pistons have had talks with the city on a new practice facility, but that won’t be completed in time for the Pistons’ first season downtown.

The NBA Board of Governors finance committee will review the lease agreement and the entire board will vote on approval, but with a state-of-the-art arena as the destination and NBA commissioner Adam Silver’s approval, the move is expected to be rubber stamped.

The benefits

Once the home of a 259-straight sellout streak that ended in 2009, the Pistons have finished in the bottom six in NBA attendance for five straight seasons.

Even last year, which saw the franchise end a six-season playoff drought, attendance figures were only good for a 25th-place finish.

The fan experience at the Palace isn’t comparable to what you witness of game nights downtown when the Lions, Tigers and Wings games fill downtown restaurants and bars with patrons.

Gores has spent more than $50 million in Palace upgrades since purchasing the Pistons — including refurbishing locker rooms, investing in a new scoreboard, new seating and improving the wireless experience for patrons.

Although the Palace is still a great venue as a fan experience, upkeep costs will likely only rise in the future.

And there’s also the added competition of Little Caesars Arena, which is expected to significantly hurt the Palace’s concert business. Concerts are scheduled at the Palace through September.

The organization struggled to sign a naming rights deal for the Palace, with age of the venue cited as a stumbling block.

The bottom line is this: Gores would not be making this move if he didn’t expect revenues to rise substantially with the venue change.

For the Red Wings, they get the added strength of the Pistons in future TV negotiations.They also get an added 41-plus dates where the new arena will be occupied.

And there is the added incentive to remove the Palace as competition for the new arena when the newness wears off.

And the partnership keeps PS&E venue DTE Energy Music Theater for summer outdoor concerts. PS&E also operates Meadow Brook Music Festival on the Oakland University campus and manages Freedom Hill Amphitheatre in Sterling Heights.

Next steps

A fully completed deal is still weeks away. But the two parties have a comprehensive memorandum of understanding that covers all business terms that will be documented in the final agreement, one source said.

But it’s enough of an agreement to have a celebratory news conference.

Chris Ilitch and Gores will be remembered as the men who returned the Pistons to the city — an urban game being played in an urban area.

Duggan will be able to say he played a role in bringing the Pistons back downtown.

It’s being billed as a homecoming, but the Pistons are leaving Oakland County, their home since the late 70s.

The Palace faces the prospect of being shuttered and will likely face the wrecking ball.

Contact Vince Ellis: vellis@freepress.com. Follow him on Twitter @vincent_ellis56.

►Related: Pistons hammering out 2 key issues for downtown arena move

►Windsor:Pistons returning home healing for city, fans