Oakland University negotiating to buy The Palace
Last season, the Pistons moved to a new home but hadn’t found a buyer for their previous home, The Palace of Auburn Hills.
They might have one now.
Rochester’s Oakland University is negotiating with Pistons owner Tom Gores’ Platinum Equity to purchase The Palace, a source with knowledge of the negotiations told The Detroit News on Friday.
A Pistons spokesperson declined comment on the reported negotiations. And Brian Bierley, director of media relations for Oakland University, said he was unaware of any serious conversations on the subject.
Such a deal could save the building that otherwise likely would be demolished and perhaps boost the prominence of Oakland’s athletics program, located about 2½ miles from the arena. The city of Auburn Hills, however, could stand to lose hundreds of thousands in annual tax revenue because of the university’s nonprofit status.
The plan would be for the university to continue to use The Palace as an athletic facility. The Golden Grizzlies basketball teams currently play their games on campus at the O’rena, where the largest crowd has been just more than 4,000; the capacity at The Palace is more than 20,000.
The appeal for Oakland could be having a larger venue to host both the men’s and women’s basketball teams, in line with some of the other Division I teams. Calihan Hall, home of the University of Detroit, has a capacity of 8,295 and the University of Milwaukee’s Panther Arena is more than 8,900.
“Oakland University has been nothing but on a growth path for the past decade at least,” said Fred Liesveld, vice president of Newmark Knight Frank real estate in Farmington Hills. “It’s on the verge of being a very prominent university. It’s a pretty great homegrown solution for what was appearing to be an obsolete facility.”
The university already has ties to the Pistons. Meadow Brook Amphitheatre, an outdoor music venue located on Oakland’s campus, is owned by the university but is operated by Detroit-based 313 Presents, a joint venture between the Ilitch family’s Olympia Entertainment and Palace Sports & Entertainment.
Oakland, however, is a nonprofit university, exempting it from property taxes. According to county records obtained by The Detroit News, The Palace contributed $828,431.42 in taxes to the city in 2017.
The Pistons moved downtown to Little Caesars Arena last season after finishing the 2016-17 season at The Palace. The Pistons still practice at their facility near The Palace while they are completing construction in Midtown of their new practice facility, which is slated to be finished in September.
Since the Pistons left The Palace, the property’s value nearly has been cut in half. For the first six months of 2018, its owner has paid $346,671.56 in taxes, a 43 percent decrease from the previous year.
Auburn Hills Mayor Kevin McDaniel declined to comment, saying only that the city has not heard from the university or The Palace.
Liesveld said the tax revenue loss could be a factor in a deal but that Oakland University could provide other opportunities for the city.
“It is such a well-known and popular entity that would be there,” he said. “I think Auburn Hills ought to be pleased with that result.”
Platinum Equity purchased the Pistons and the Palace, along with concert venues in the previous Palace Sports & Entertainment entity for a reported $325 million in 2011. It’s unclear how much Oakland is offering for the land in Auburn Hills, which would include the practice facility.
The Palace opened in 1988 at a cost of $90 million — all privately funded by late owner William Davidson, who moved the team from Detroit to its temporary home at the now-demolished Pontiac Silverdome for a decade before settling in Auburn Hills for 29 years.
When it was built, The Palace was regarded as one of the best sports and concert venues in the country, with a wide array of luxury suites and amenities, which became a template for future complexes.
Posted By: The Detroit News on October 26, 2018. For more information, please click here to read the source article.
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