The last time the Detroit Pistons were seeking a new home, the franchise was building a dynasty, the NBA enjoyed labor peace and a...

The last time the Detroit Pistons were seeking a new home, the franchise was building a dynasty, the NBA enjoyed labor peace and a suburban arena was built for the team with private funds for just $70 million. But the landscape will be considerably more challenging this time around if a prospective new owner tries to relocate the Pistons to downtown Detroit.

Talk of a possible move by the Pistons picked up this week, when Mike Ilitch—the Little Caesars pizza tycoon who also owns the Detroit Tigers and Detroit Red Wings—released a statement expressing his interest in buying the NBA team from Karen Davidson, who inherited the Pistons and the rest of Palace Sports & Entertainment’s holdings when her husband, Bill, died in March 2009. Davidson has said she hopes to sell the team—valued at $479 million by Forbes—by the start of the NBA season in late October.

While Ilitch did not mention in his statement a new arena for the Pistons—who have played at the Davidson-funded Palace At Auburn Hills since 1988, the season after the first of the Pistons’ back-to-back NBA titles—he has long wanted to build a new home for the Red Wings, which have played in city-owned Joe Louis Arena since 1979. In February, Ilitch hired Tom Wilson away from Palace Sports & Entertainment, where he was the president and CEO, to head the Red Wings’ arena efforts.

Reports out of Detroit indicate Ilitch would have an easier time securing the financing for a home shared by the Red Wings and Pistons than he would trying to build separate arenas for the teams. But plenty of challenges would await Ilitch even if he planned to bring the two teams under one roof.

A new arena would reportedly cost between $300 and $400 million and would almost certainly require public funds: Ilitich’s last stadium project, Comerica Park, opened in downtown Detroit for the Tigers in 2000 and cost $300 million to build, including $115 million in public funds.

Such efforts this time around would be particularly challenging in an area decimated by the recession and the demise of the auto industry. Michigan had the nation’s highest unemployment rate (15.3 percent) as of December 2009. The unemployment rate in metro Detroit as of June 2010 was 14.3 percent, third-highest among metropolitan areas with one million or more people. In the actual city of Detroit, the official unemployment rate was 24.3 percent in December 2009, though mayor Dave Bing—a former Pistons star whose retired uniform number hangs in the Palace At Auburn Hills—said in December 2009 the true unemployment rate was closer to 50 percent.

The Pistons reached the Eastern Conference finals six straight years from 2003 through 2008 and won the NBA championship in 2004, but they were knocked out of the playoffs in the first round in 2009 and stumbled to a 27-55 finish last year.

In addition, the Pistons, who enjoyed 259 straight sellouts at the Palace from January 2004 through February 2009, fell from first in the NBA in attendance in 2008-09 to eighth last year, ending a streak of eight straight seasons in which they finished first or second.

Further complicating matters is the likelihood that NBA owners will lock out players after the Collective Bargaining Agreement expires at the end of the upcoming season. NBA Commissioner David Stern said in July the league is expected to lose $370 million in 2010-11 and has already proposed drastic cuts to the veteran minimum as well as the type of “max free agent” superstars can sign. Add it all up and buying the Pistons may be the least challenging task for Ilitch or whomever ends up with the team.