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Sacramento City Council takes unanimous step toward key arena vote


One vote down to bring a new arena to Sacramento, one more critical vote to go.

Tuesday, the Sacramento City Council voted unanimously to continue finalizing proposals with private parking companies, who will in turn provide $200 million or more toward a new Entertainment and Sports Complex. For that money, the winning bidder will have the right to operate the city-owned parking assets for up to 50 years. This is a critical piece of mayor Kevin Johnson’s plan to keep the Kings in Sacramento, and a ‘no’ vote last night would have sent the team packing, though as I reported earlier Tuesday it wasn’t going to come to that.

That report also included a breakdown of the situation and news that the council will have the votes to approve an arena deal before the March 1 deadline, so long as a laundry list of achievable criteria is met.

That criteria, including safeguards on the parking deal and project cost overruns, is going to be worked out over the next two weeks as the city, the private parties, the NBA, and the Maloofs will come together to create a term sheet for the council to vote on. The vote is expected to be held on February 28, but it’s possible, even likely, that the NBA will allow for an extension on their deadline so they can review the terms at a reasonable pace. That announcement could come on All Star weekend.

Tuesday’s vote wasn’t expected to be contentious, but hundreds of Kings fans still showed up to make their case to the council. They wore white T-shirts with words such as growth, economic engine, events, downtown, nightlife, etc, and did their best not to recreate the acoustics in Power Balance Pavilion.

While there were eight speakers signed up make the opposition’s case, mayor Johnson was forced to limit public comment in support of the arena due to obvious time constraints.

After about 20 arena proponents were allowed to address the council, Johnson asked those in support of the arena that didn’t get a chance to speak to stand up and be recognized. Nearly everybody in the double-decker room stood up.

For well over five years Sacramento has been seen as impotent in its ability to get an arena deal done, but even council members that are in opposition of the current deal seemed resigned to their fate. Sandy Sheedy, the most vocal opponent of the deal, put up little to no fight on the issue and the other opponents chose not to speak. Surely they could be saving their breath for when the games count, but in doing so they lost a critical chance to curry favor with the anti-arena crowd, if it even exists.

The vote in 2006 to implement a sales tax for a new Kings arena lost by an 80-to-20 margin, but what most people don’t know is that it was an extremely flawed and eventually abandoned measure that never had a chance.

Tuesday night a strong message was sent to the NBA and competing cities that an arena deal is coming.  Staring into the sea of white T-shirts, with little to no opposition to be found, it was hard to understand how it took them so long in the first place.

Sacramento City Council has votes for arena if reachable criteria is met

Inside Kings Arena

The Sacramento Kings and their fans will hold their breath on Tuesday night, as the Sacramento City Council holds the first of at least two critical votes that will determine whether or not the team leaves town.

Let me be the first to tell you that tonight’s vote will pass.  Sources close to the situation report that the council is all but certain to have the votes necessary to move the process forward.

Specifically, the vote will allow the council to finalize proposals with ten competing private parking operators that will provide upwards of $200 million toward the cost of the estimated $387 million Entertainment and Sports Complex.

This will setup a vote on February 28 that will decide the Kings’ future.  It is at this time that the council, in cooperation with mayor Kevin Johnson’s Think Big Sacramento coalition, will vote to approve a term sheet that will signal to the NBA that Sacramento can indeed fund an arena.

I’m also told by sources with knowledge of the situation that as long as a laundry list of criteria is met, the council will have at least the four votes necessary (not counting Johnson’s tie-breaking vote) to approve the term sheet.

This laundry list includes guarantees that the city’s general fund will be replenished by the approximate $9 million annual revenue stream currently provided by city-owned parking operations, a plan for some or all of the city’s employees to be transferred into the new parking company’s operation, a mechanism to cap rate hikes for parking in the future, an option for an agreement shorter than 50 years, and a mechanism to provide kickbacks to the city if parking revenues exceed certain benchmarks.

It is believed that within that framework, the city can meet or exceed their $200 million target.

The last major item on the laundry list is who will be responsible for cost overruns if the $387 million project goes over its budget.  I’m told the city will approach the developer, David Taylor, to potentially provide that guarantee.  While it is unclear whether or not Taylor would shoulder such responsibility, he will likely be given incentive to do so by an offer of development rights near the arena.

Taylor has been working on the arena deal for years and has evaluated the project for Sacramento at a significant cost to himself, and it would be surprising if he told the council that he would not be responsible for cost overruns on a project he evaluated and promoted – particularly if there is further incentive in the form of development rights.

Adding the estimated $200 million or more from parking, an estimated $30 million from local hotels, an estimated $50 million from an arena operator (AEG), and an estimated $80 million from the NBA and the Maloofs — sources tell me that the city is well in the ballpark of securing the financing necessary for the arena.

In other words, the city of Sacramento has both the will and the way to secure a ‘yes’ vote for an arena.

As far as the timing goes, while February 28 is potentially the date for a deciding vote, it is likely that the NBA will allow for an extension on the March 1 deadline so they can properly evaluate Sacramento’s findings.  That announcement could come during All Star weekend.  The NBA and the Maloofs could theoretically act on the city’s proposal quickly and provide their terms in time for a February 28 vote, but sources stress the important part is that the city will have communicated that it is ready to vote on a deal.

From there it is on David Stern and the Maloofs to pull the trigger on the estimated $80 million price tag, which amounts to about $3 million per year in rental payments for 30 years, all paid up front.

As for any talk of selling the team, The Maloofs have been consistent with their message that it’s not an option, and their sale of the Palms can be seen as either a sign that the ship is sinking or a sign that they were moving money for the purposes of an arena.  In the unlikely event they do want to sell, Think Big Sacramento executive director Jeremiah Johnson told Seattle’s King 5 News that the city has “a number of ownership groups willing to keep the Kings in Sacramento.”

It’s not going to come to that.

The Maloofs and/or the NBA could try leverage the city of Anaheim against Sacramento, who recently made improvements on their NBA-ready facility, but after Jerry Buss and Donald Sterling just agreed to revenue sharing with small market clubs it’s less likely that the NBA will place another team in their backyard.

As for Seattle, despite their clear efforts to bring an NBA team back home, they are well behind Sacramento in their pursuit of an arena.  They too would have to approve public funds for a new building, and Stern and the Maloofs will have to weigh the $80 million cost of a sure thing given a ‘yes’ vote, and a nebulous offering in Seattle that is 1-2 years away while Key Arena is a stop-gap solution at best.

With all of the support David Stern and the NBA has given Sacramento in its fight to keep the Kings – from manpower in the front office to people on the ground helping make the arena deal a reality – it just doesn’t make sense for them to pass up a viable option for two that have problems.

This is a complex situation and it is not a done deal, but the once half-court shot turned 3-pointer doesn’t even seem like a free throw at this point – it seems like a layup.  The Party of Five that voted down a public vote that would have sent the Kings packing are interested in a deal that addresses the aforementioned criteria.  That criteria reportedly can be met and still provide the project with the money that it needs to be green-lighted, assuming the private parties each put in amounts that seem reasonable, achievable, and already written in pencil.

Kings fans will probably wait until the shovels hit the dirt before they celebrate.  Let this prediction be the first bottle of Dom Perignon.

The Kings aren’t going anywhere.

NBA doing the Maloofs’ talking for them

Los Angeles Lakers v Sacramento Kings
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The Maloofs’ relationship with Sacramento is decidedly love-hate. When the Kings were winning and Joe and Gavin were plastered on TV during games, Sacramentans were ready to propose.

But it’s funny how life works — the team started losing and (gulp) started asking the city of Sacramento for money, and everything has been downhill since. Their 2006 ill-fated measure to finance an arena was a PR disaster. Now the relationship they have with fans after a failed attempt to get out of Dodge in April is well, think Elin Nordegren and Tiger Woods having dinner at Thanksgiving with their children.

It’s all about the Kings, so I won’t throw this turkey leg at your head.

In all fairness, the Maloofs have dealt with a city that has acted like NBA franchises grow on trees and that people will gladly pay property taxes absent the consideration of amenities.  But let’s not get into details, because who cares about those?  After all, more than half of the basketball public believes the players are ‘on strike’ because Ron Artest and Stephen Jackson ran away with all of the dollar bills to make it rain with.

Nevertheless, it wasn’t surprising in the least to read Rob McAllister’s latest report on KFBK.com about the big meeting in Dallas between arena-related parties. McAllister reports that yesterday the city of Sacramento, NBA representative Clay Bennett, AEG, and others met to lay out parameters, timelines, etc. You know, arena stuff.

But is he forgetting somebody? I’ll let McAllister take it from here:

The Maloof family was not at the meeting in Dallas and there is no time table that currently details when the Kings’ owners will join the negotiations. (Sac City Councilman Rob) Fong said he expects the “Maloofs to be a part of the talks,” even though the city has been dealing directly with the NBA.

If you recall, the NBA kindly told the Maloofs to give Sacramento one more year to get an arena, after Kevin Johnson came up with $10 million in corporate sponsorships and an eleventh hour plan – while simultaneously fans pulled a ‘hell no, we won’t go.’

Make no mistake, it’s not typically the NBA’s protocol to block a team from moving, particularly if the old city has balked at building a new arena. As long as the supply for NBA teams is restricted, and the demand for teams remains high, then the NBA will always have that leverage (see antitrust: reasons why the NBA wants never to speak of it).

So telling the Maloofs to get back in the negotiating seat would normally mean that they, ya know, sit at the table, right? Wrong.

This time Ron Burkle and prospective buyers lurk in the background behind Kevin Johnson’s promise that Sacramento can be an NBA city. The Maloofs, hit hard by the economy, have sold all but two percent of the Palms, and what had once been rumors was finally put into print when NBA insider Jonathan Abrams wrote at Grantland that they “would have likely been forced to sell had they relocated to Anaheim, which remains a distinct possibility.”

Even at city council meetings, where opponents of the arena initiative would normally rail against giving money to rich people, they’re now talking about the various uses of public funds rather than making it about the Maloofs. And arena proponents barely even talk about the Kings these days. Instead, they talk about the A-list acts that will go to the Bay Area if an ‘Entertainment and Sports Complex’ isn’t built, and the millions being lost in Sacramento property tax revenue that a new ‘Entertainment and Sports Complex’ would address according to top economists.

The Maloofs have made just a handful of public comments regarding the process since it was decided that they would stay, and nothing that would make the 10 o’clock news.

For a family that doesn’t exactly lay low, it’s almost like they’re not there, complicit with the idea that their presence could somehow derail things in Sacramento.

It’s a pretty simple decision to hide the Maloofs, given their past history with arena initiatives, the threat of moving, and the like, but as Abrams alluded to there is more at play here.

As much as you would like to hide the Maloofs if you’re Sacramento and the NBA, any owner would be expected to be involved in a process like this, and their representatives would certainly be at meetings of this type. In this case, Bennett is there instead to keep things on track.

The NBA has invested a ton of time in getting an arena deal in Sacramento, and frankly, had they wanted to be in Anaheim they would have simply let the Kings go. But there were too many reasons not to go at the time.

Henry Samueli rolled out the red carpet for the Kings and really, really, really wants to take over for the Maloofs if they can’t afford to play with the other billionaires, but he has an image problem. Convicted of lying to regulators in a stock option scandal years ago, he was suspended as an owner in the NHL. He has a history of philanthropy and Donald Sterling is obviously tolerated, but still, it’s a blemish.

Compared to David Stern’s drooling over Ron Burkle, it’s quite clear who the NBA would prefer to pick up wherever the Maloofs leave off, assuming of course Burkle or the other suitors are still interested.

And then there’s the small issue of the lockout. Back in April the NBA was preparing to ask the Jerry Busses of the world to dish out some pie in the form of revenue sharing – not exactly the right time to plunk a team in his back yard. In fact, there may be no right time to do that if the NBA quadruples revenue sharing – at least not for a while. Don’t tell that to Sacramento, though, since Anaheim is still being dangled over their head (not like a carrot, like a guillotine).

Besides, can the NBA really uproot another franchise — after a lockout — when Sacramento has so publicly been supported by just about everybody in the NBA?  And financially, do they really want to abandon the 20th largest market in the United States, just to overlap what they already have in L.A.?

No. Not now. Not under these circumstances. Not if Kevin Johnson can deliver an arena.

So Clay Bennett will show up and lay out the parameters that have likely already been communicated to Kevin Johnson, AEG, and the rest of the team. Johnson and Sacramento city councilman Rob Fong will be there to discuss what they believe can and cannot pass in the council, which ultimately controls Sacramento’s checkbook. The NBA will negotiate on behalf of the Maloofs, but as long as a reasonable plan gets presented by Sacramento, they’ll turn to the Maloofs and say, ‘here it is.’

And they will take it.  Whatever they choose to do with it from there is anybody’s guess.

Jimmer fever in Sacramento might help bring new arena


Jimmer Fredette, the most talked about player in this year’s NBA draft, was selected No. 10 overall by the Sacramento Kings on Thursday.

30 minutes later, the Kings had a splash page with his likeness up ready to sell tickets on their website. Within another 30 minutes, Jimmer was trending worldwide on Twitter and was the 20th most searched term on all of Google.

By the time he arrived at the royal airport the next day, the Sacramento fans had gathered en masse to welcome him to his throne, conveniently forgetting the contention by many basketball types that he is a slow, white, geeky chump.

So as he descended down the airport escalator doing a poor man’s rendition of the Heatles’ introduction in Miami (not four times, not five times, not six times did he ride the escalator), even the most ardent Kings fan had to wonder if he is more Ringo than John.

None of this hullabaloo should be surprising, however, after Jimmer left college basketball with a formidable cult following, recognition from just about every corner of the basketball universe, and a music video to help explain how that all works (with a very white version, here).  And while he would have likely received significant attention wherever he landed, the honeymoon in Sacramento has been amplified due to the fans’ grassroots efforts to save their team.

As we’ve reported, the Here We Build coalition being quarterbacked by former Suns PG and current Mayor of Sacramento Kevin Johnson has brought together 70 regional leaders to try to deliver an arena, including heavy hitters from the world of money and politics to go with the Joe Lunchbuckets that refused to leave Power Balance Pavilion when everybody told them that their team was gone.

Without a new arena, the Kings will almost certainly pack up for Anaheim, who has rolled out the red carpet to become an NBA city.

And despite precise measurements available to anybody with an Internet connection showing how the public would benefit both economically and culturally by funding an Entertainment and Sports Complex (ESC) in Sacramento, the appetite to publicly fund sports arenas in California is decidedly bulimic. And because of that recent history, and the ease with which one can complain about any tax, politicians in the greater Sacramento region have balked at the very real threat of the Maloofs leaving Sacramento for over 10 years.

But this time around things are different, perhaps due to reality setting in when moving vans started circling Power Balance Pavilion. Or maybe it’s the 12.7% unemployment rate in Sacramento and the 4,000 jobs the proposed ESC will create, or the hundreds of millions of dollars the region would lose if the Kings leave and within just a handful of years – that word million graduates to the word billion.

The result is a creative set of funding proposals that will be considered over the coming months that will attempt to blend the perfect amount of public and private money to pay for the estimated $387 million price tag for a new ESC.

That’s right, public money. Now public money does not have to come through a direct sales tax. It can come from hotel fees, taxes on cigarettes, and just about anything a city or region would like – but it has to be approved (in this case) by a city council or regional authority that ultimately wants to get re-elected. Whereas prior arena funding efforts were largely unpopular, in conversations I’ve had with local politicians off the record, there is a palpable fear of the political fallout in future elections should they fail to deliver here.

As for the Maloofs, they liquidated nearly all of their ownership in the Palms Casino, eliminating $400 million of debt from the family’s balance sheet. For all intents and purposes they appear to be mobilizing to contribute to the private portion of the funding arrangement, though it’s unclear how much they’re able or willing to spend.

The question the Here We Build committee will seek to answer is what an operator would be willing to pay (and for what type of profits in return), what the Maloofs would be willing to pay as simple tenants (and what other profit-centers they would be willing to invest in), and then what funding the Sacramento region can get approved through its decision-making apparatus for the public piece – which naturally will happen when they compare the cost of their investment compared to the projected revenues and profits from audited reports.

And naturally, the investment will look better when the Kings are playing well, when they’re selling tickets and securing sponsorships, and when the Maloofs can kick in more money to the project with those higher projected revenues to lean back on.

Enter, the Jimmer.

Less than 24 hours after touching down on the tarmac, the Kings rolled Jimmer out with his two fellow draftees, Isaiah Thomas and Tyler Honeycutt, for a ‘Rookie Rally’ that begs the question of whether Justin Bieber grabbed Doc Brown’s DeLorean and kicked off his 80s mall tour. I’m only slightly sure that reports of grown men screaming and fainting were exaggerated by the press.

Despite the obvious marketing opportunity Jimmer brings to the table, the contention from Kings management is that he was drafted based purely on basketball ability, and whether the fans believe it or not — they don’t care.  It is a rare, if not unprecedented, example of a team’s fans and media knowingly and willingly taking the bait.

The fans in Sacramento know that his defense is an issue, they know the team’s defense is an issue, and they know that the team has at least five shooting guards and no true point guard. They know that the Kings could have addressed the gaping hole at small forward by drafting Kawhi Leonard, who is also known as the guy that the four-time NBA champion Spurs traded up-and-coming George Hill for.

They also know the move to trade Beno Udrih for John Salmons was made to accommodate Jimmer’s development, and while most of them believe that Salmons was not the right guy to bring in, only a muted few are screaming about not drafting Leonard.

When team president Geoff Petrie conveniently forgets the extra year on Salmons’ contract when he talks publicly about the trade leaving them in the same spot financially, nobody points out the $3-5 million per year that Leonard would have cost – compared to the 31-year old Salmons at about $8 million per year for three years (and a partially guaranteed fourth year at $7 million).

And no, the fact that the Kings may need five basketballs to be used during the game to keep everybody happy is not lost upon them. But while Kings fans recognize that there could be some chemistry issues, they’ll be quick to point out that Jimmer’s new teammates have all made statements that they’re excited to play with him.

Though Kings fans have watched their neighbors in Golden State crash and burn with it for years, they want to know what Don Nelson’s fun-and-gun offense would look like with Jimmer at the helm. After all, nobody in their right mind is expecting anything more than a No. 7 or 8 seed in the playoffs, so why not play a brand of basketball that’s exciting to watch.

And yes, they know that for every Steve Nash that there is an Adam Morrison, though if Morrison could have jumped like this then maybe he wouldn’t be out of the league.

Most importantly, Kings fans know that it doesn’t matter who the team drafts if they’re playing in Anaheim. And that’s where they’ll be if they don’t sell some tickets.

As for Jimmer-mania, the only thing that appears to have the ability to stop it would be the lockout.

Talking with vice president of tickets sales for the Kings, Phil Horn said “We are excited to welcome all of our rookies to the market,” adding, “As far as specific marketing initiatives, stay tuned.”

Horn could be playing coy because something big is coming down the pipeline or he could be in a holding pattern due to the lockout, and surely it should be a concern that any momentum for the arena effort get halted for any reason.

But judging by the estimated 5,000 people who showed up to see him at the mall, I’m guessing the Kings will have no problem marketing him with or without his presence on the team appearance circuit.

And whether or not he was a selected based solely on the merit of his play, it is inconsequential to Kings fans right now.

For them, Jimmer clearly gives them the best chance to win, and anything else that he can do on the basketball court right now is icing on the cake.

CSN Report: Kings to stay in Sacramento

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Monday both the NBA and the Maloof brothers will announced that the Kings will remain in Sacramento for another season, CSN California reports.

A source close to the discussions tells Comcast SportsNet that the NBA has told the Maloofs to expect the Kings to stay in Sacramento next year.

The NBA is expected to put out a press release on Monday and the Maloofs will follow with a release of their own, but an NBA press conference is not expected. The source also said Sacramento Mayor Kevin Johnson is expected to hold a press conference on Monday.

Expect the Maloofs (the owners of the Kings) to come out at their press conference talking about how they love Sacramento and never wanted to leave, how they want to make it work. Nobody in Sacramento will buy it. That family has a lot of work to do to repair their reputation in Sacramento

The Maloofs had planned to move their team to Anaheim starting next season. They had negotiated a lease agreement for the Honda Center and set up a personal loan from billionaire Henry Samueli, who operates the center. Even plans for a television deal had been set up. It seemed a month ago that this move could not be stopped.

But in the end staying seemed to be only option the Maloof brothers had. After Johnson spoke to the NBA owners — the Board of Governors — and talked about $10 million in new sponsorships and plans for a new building starting to take shape, other owners sounded like they were willing to give Sacramento one more chance.

It became clear in the past week or so the Maloof brothers did not have the majority vote of owners that would be required to approve the move. There became more and more of a feeling that this move was about the Maloof families personal financial issues — the Palms cansino, like all of Las Vegas, has been hard hit by the economy, and the brothers have taken on a lot of debt — than it was about the team.

Sacramento gets one more year. But if efforts for a new stadium do not take huge leaps in the next year, if money is not lined up to build it, the Kings will be gone next summer.

But for now, the Kings stay.