SBJ/January 30-February 5, 2012/Franchises

Palace revolution? Pistons look at cutting half of arena’s suites

The Detroit Pistons are eyeing the elimination of nearly half the 178 suites at the Palace of Auburn Hills as part of a major overhaul under new owner Tom Gores, who is working to put his own imprint on the franchise.

A plan under discussion calls for the team to convert 80 suites on the penthouse level, the arena’s highest point, into more profitable spaces with ideas of a restaurant, social media gathering sites, and a sports hall of fame all under consideration.

The skyboxes are now sold on a game-by-game basis and have proved to be a tough sell. The team wouldn’t disclose specific pricing on the suites.

The project is in the early stages of development, said Dennis Mannion, president of the Pistons and Palace Sports & Entertainment, the team’s parent firm. No decisions have been made on what could be
The recession left the Pistons with open suite inventory in the arena’s upper level.
Photo by: JOSEPH CRACHIOLA (2)
done and the costs associated with the project.

The Pistons have not hired an architect for the revamp. Rossetti designed the Palace and has been involved in the more than $200 million in renovations over the past 23 years.

“We just have too much [suite] inventory,” Mannion said. “Changing those suites will be rated against numerous capital-intense projects we are reviewing.”

Under Gores and a new top front office staff led by Mannion, the Pistons are starting to roll out new marketing strategies to rebuild a fan base in decline over the past few years after the death Bill Davidson, former owner of the team and the arena.

Through Jan. 25, the Pistons are drawing an average of 12,481 fans over 10 games at the 22,076-seat Palace, down 25 percent to date from last season and last in the 30-team NBA.

Mannion, former president of the Los Angeles Dodgers, was hired by Gores in September after Gores bought the team in April for a reported $325 million. It’s been an uphill climb for Mannion and the Pistons to breathe new life into the franchise.

Mannion
Mannion has restructured the team’s front office by hiring new staff in Charlie Metzger, executive vice president, chief marketing and communications officer; Lucinda Treat, executive vice president of business operations and strategy; and Jeff Ajluni, executive vice president and chief revenue officer.

“We all came a little late to the traffic plan,” Mannion said. “There are things you should be setting up in March but I came in mid-September and we didn’t set up our full [executive] team until the past few weeks.”

Changes already made at the arena under Gores include new locker rooms and player lounges, new lighting, a new playing floor and a rebranding of the arena’s west atrium to include a new video wall and color scheme.

“We are looking at everything,” Metzger said. “Our vision is to continue to lead the way not only in our marketing but in our in-arena facilities and fan experience.”

But finding better use of the arena’s upper reaches is a major priority. “The focus is on the third level with a full revisiting of the space,” Mannion said.

The Palace, viewed as a trendsetting building when it opened in 1988, was one of the first arenas to put suites midlevel in the seating bowl and its 178 suites are still the most in the NBA. Newer arenas have 60 to 70 suites due to shifts in the premium seat market over the past several years.

Ironically, about 25 years ago when the Pistons first developed the Palace, the team added those 80 skyboxes to the arena design after selling out about 100 midlevel units before the building opened. The suites on all levels were a hot commodity during the team’s championship years in the late 1980s and 2004.

When the recession hit in late 2007, the Pistons found themselves with open suite inventory at the arena’s highest level. With Detroit’s automakers devastated by the downturn, fewer long-term suite deals were renewed.

In late 2008, under the leadership of former Palace Sports and Pistons President Tom Wilson, the team considered building an all-inclusive club on the penthouse level. But the club project never moved forward, said Jeff Corey, Palace Sports’ vice president of public relations. The recession and Davidson’s death in 2009, which preceded massive turnover in the front office, most likely were factors, Corey said.

As the Pistons revisit the penthouse level with a renewed commitment under new ownership, they can look to other big league arenas for ideas, keeping in mind the space limitations up top for one of the few remaining single-concourse NBA facilities.

In New York, Madison Square Garden’s three-year transformation includes the elimination of 71 suites on the 10th floor at the top of the arena. MSG will fill that space with the Chase Bridges, two catwalk-style platforms suspended high above the floor with 500 premium seats on each bridge. The prices have not been determined for those seats, which will open in the fall of 2013, said Stacey Escudero, an MSG spokeswoman. They are sponsored by Chase Bank, one of MSG’s biggest partners.

At Staples Center in Los Angeles, AEG tore down the walls of eight single-game rental skyboxes on the upper suite level to build Hyde Lounge, a space modeled after a Sunset Strip club by the same name. Now in its third season, the 175-person lounge has proved to be a “home run” for the Lakers, Kings and Clippers now that all three tenants are competitive on the court and on the ice, said Lee Zeidman, the arena’s senior vice president and general manager. The revenue model is tied to $5,000 annual membership fees for the club, which is open until 2 a.m. on event nights.

The nightclub retrofit may not work in gritty Detroit, still recovering from the downturn, but closer to home, Chicago’s United Center consolidated skyboxes into 40- and 80-person super suites on the penthouse level at both ends of the facility six years after the arena opened in 1994. More than 10 years later, they continue to sell successfully. The joint venture operating the arena for the Bulls and Blackhawks later developed the Bud Light Legends Lounge, another super suite on the penthouse level.

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