Tag: Kings to Anaheim


Sacramento City Council votes 7-2 to go forward with next step in arena process

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City council meetings can be dull, but the Sacramento City Council meeting on Tuesday to decide if the Kings should go forward with a key element of their plan to secure a new Entertainment and Sports Complex (ESC) was anything but.

Alright, it was still pretty boring, but Tuesday’s meeting had everything you could ask for in a five-hour local government showdown, including human PowerPoint presentations, #Occupy protestors, some normal people, the villain city council member, people whose sole purpose in life is to show up at every city council meeting and speak on every issue, people that sang during their two minutes to speak, the transvestite with a keen business acumen, and of course, the mayor that dunked on Hakeem Olajuwon like he was Timofey Mozgov.

On the docket was a vote to determine if the city should go forward with a Request for Qualification (RFQ) from parking lot operators that could end up providing $200 million or more toward the city’s stake in the estimated $400 million arena.  Once the vote passed, the city manager would then be authorized to have parking lot operators produce preliminary bids for the right to operate city-owned parking lots for terms up to 50 years.  This is said to be the funding nut that will push the Kings over the finish line, though it remains to be seen if it will be enough.

What made Tuesday’s meeting critical, aside from the unlikely scenario that the council would vote down this motion, was getting to see once again how each council member would act, as they will ultimately determine the project’s fate. During the last procedural vote in which $500,000 was requested to secure a qualified arena negotiations team, I wrote about how each council member discussed the arena project and said that things looked good for Kings fans.

They voted 7-2 on that day to authorize funding that would move the process to its next step, and on Tuesday they voted the same exact way to authorize this RFQ. Again, the main opposition to the arena plan has come from two council members, Sally Sheedy and Darrell Fong.  After Kevin McCarty talked extensively on Tuesday about how the parking funds could be used in other ways, he also joined my unofficial ‘no’ side of the ballot.  Meanwhile, Sheedy has taken a Judge Judy like role in proceedings, barking out commands to city staff and generally trying to muck up the process.  She is seeking re-election under an anti-arena campaign.

On the other side of the ballot I had identified four arena proponents prior to Tuesday that, as I see it right now, will vote yes when the vote matters in February (Rob Fong, Angelique Ashby, Bonnie Parnell, and Jay Schenirer).

Following Tuesday’s meeting I added Steve Cohn to that list after he offered up this tidbit following an exchange with ‘no’ voter McCarty. After Cohn cited a Green Bay Packers-like stock plan as a creative example of a funding mechanism, McCarty said “It probably helps that the Packers are 13-0.”

To that point, Cohn said “Yeah but they’re going to keep their team no matter what. So we need to keep ours.”

Kevin Johnson’s ‘yes’ vote would only be needed to break a tie, so essentially Kings fans need 4-of-8 members to vote ‘yes.’

All said, I’m predicting a 6-3 vote in favor of funding the arena, but like everything else having to do with Sacramento versus Los Angeles, this will come down to the wire. Assuming my word-parsing, eye-tests, and other voodoo analysis are correct, the deal still has to come to the city council’s desks without any major flaws. Then, it has to provide enough time for council members to vote on it without having any reservations about moving too fast.

As of now, Kevin Johnson has yet to make a mistake and has conducted the campaign to a presidential degree, with a former campaign manager to Bill Clinton, Chris Lehane, at his side co-chairing the Think Big coalition. Until Johnson screws something up, it’s wise to bet that he’ll continue to hit his deliverables.

Meanwhile, Kings fans continue to impress in their role of drumming up public support.  During Tuesday’s meeting, a diverse set of seven Kings fans spoke during the time for public comments, but the twist was that they scripted their comments to fit a theme. The theme was that the city’s need for an arena is “bigger than basketball,” so before each of them spoke they removed their Kings jerseys to reveal a white T-shirt with one of the words ‘Concerts, Regional $, Events, Revitalize, Nightlife, Jobs, and Pride.’

They live-tweeted each person’s talking point and along with the streaming video of the council meeting the entire Kings’ grassroots network trended on Twitter in Sacramento.  Small gestures, big impact.  I’ve said it before, but Save our Sonics needed Twitter to invent itself a few years earlier.

I asked the leader of the group that came up with the idea for the T-shirts why they did it, and Mike Taveres of #FANS (Fund Arena Now Sacramento) said, “We wanted to show this was more than just our Sacramento Kings. They’re a piece of the puzzle but not the only piece.”

What’s going on in Sacramento is much bigger than basketball, indeed. The region has 12 percent unemployment and lost $40 million in tax revenues in the last year alone due to falling property values. The city’s normally stable public sector has been hammered by budget cuts at the state level, and big businesses are leaving with regularity (for places like Anaheim that cater to business no less).

Should Sacramento not fund the arena and they lose their team, they will need to find an anchor tenant before they could entertain the idea of building a game-changing downtown anything district. Their citizens will continue to pour money into other regions when they travel outside of Sacramento for shows and events, property values will likely continue to struggle, and businesses will see the city’s inability to build an arena as a failure of leadership. They already are. The citizens, already slumping through bad economic times, will see their crown jewel going away as a sign that things aren’t working, and confidence will erode all the way around. These aren’t my words – they’re the words of the many citizens I’ve interviewed that desperately want to keep the tumbleweeds outside of city limits.

Yes, there is a discussion to be had about the public funding of sports arenas, but ironically that discussion is in a pending status within the academic community. As I reported back in August, the go-to economist on sports subsidies, Brad Humphreys, is in the middle of a study to address the hundreds of millions of dollars of increased property value a facility like the proposed Kings arena might bring. I spoke with Humphries in great detail, and he said that as long as the Maloofs and the NBA were throwing in the type of money that had been reported, that the Kings deal shaped up as a “good deal.” As for the study, that’s on pause until his co-author can catch a break from his two newborn kids. They’re in no hurry to finish the study and under no societal obligation to do so, but for anybody with so-called claims that they understand the economics behind this – they don’t. Simply put, the experts are still studying it. In the meantime, Humphries and others have noted that the previous approach of building a stadium or arena in the middle of nowhere was flawed, and building them in the middle of downtown hubs is the best way to monetize the value of a sports franchise. He wrote,

A new state of the art facility integrated in a comprehensive urban redevelopment program and located in the heart of a large city might be expected to generate increases in residential property values in the vicinity of hundreds of millions of dollars within a mile of the facility, if the location, planning, construction, and development are carried out carefully.

This is what the Kings fans and community leaders are fighting for. It’s not just the increase in tax revenues an extra ‘hundreds of millions of dollars’ of land value might bring, but rather the overall economic activity the arena will spur. It’s why these normal citizens have given all of their waking hours to a cause, it’s why a documentary is being made about the #HereWeStay guys, it’s why thousands of fans refused to leave after the team’s final game, and it’s why they continue to outpace their opposition at every turn.  Their community literally depends on it.

Kevin Johnson heads to New York on Friday to meet with the NBA and AEG to discuss how much private contribution the league and the Maloofs are going to make. All of this is going to come together in the next 60 days, and ultimately there will be a final vote.

Sure public opposition could pick up, and yes, unappealing deal-points could make the deal go bad, but with Kevin Johnson pitching a shutout and Kings fans handling the public education piece – it sure seems like they’re on track to finally get that win over Los Angeles.

Would lost season increase chances Kings move to Anaheim?


You want to know why NBA owners were willing to cut off the Maloof brothers at the knees, block a Kings move to Anaheim and give Sacramento one more shot to keep its only major league sports franchise?


The owners have understood from the start this was going to be a long and ugly NBA lockout. And even if this were a situation where the league and players had reached a deal this week, the ability of the Kings to win over fans in their new home was compromised. “Hey, we’d love you all to pay to come out and see us play, as soon as we are done arguing about how to split up your money.”

So Sacramento got one more chance — a real chance to get plans for a new arena moving forward enough to keep the team.

But can they pull that off in the wake of a lost season? Mayor Kevin Johnson worked hard to rally businesses and fans, to show the groundswell of support for the team. Now is that all being thrown out with the first months of the NBA season (at least)?

USC Sports Business Institute executive director David Carter told the Orange County Register things just got a lot tougher for Sacramento and look better for Anaheim.

“Missing a meaningful amount of the upcoming NBA season will certainly have an effect on Sacramento’s interest, willingness, and ability to keep the Kings,” Carter said. “Public sentiment about the lockout doesn’t help anyone, but it can really impact any franchises that are in flux.”

Sacramento’s chance to keep the Kings is real, but it already had a lot of challenges. Then this week Billy Hunter threw another big hurdle out there on the track. Like the whole lockout, it doesn’t seem fair, but it’s reality.

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.

Sac City Council members tip their hands on arena vote

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Sometimes you need to see the look in somebody’s eyes when they’re forced to make a decision before you truly know how they feel.

We got to see that on Tuesday night when the Sacramento City Council voted 7-2 to approve $550,000 to secure consultants, lawyers, and parking experts to start formalizing a funding proposal for the $387 million Entertainment and Sports Complex (ESC). Once the funding proposal is finalized, the council will eventually vote on it. The NBA and the Maloofs have given Sacramento until March 1, 2012 to get a funding plan in place.

Each council member was given ample time to wax poetic about the nature of this small request, and most of them gave some clues about how they view the larger $387 million question that will be coming.

Here, I am going to handicap their votes, based on what they said and how they said it. A total of five out of nine votes on the city council will yield a new Entertainment and Sports Complex for Kings fans.

And for the sake of brevity, I’m going to call mayor Kevin Johnson and known proponent, councilman Rob Fong both yes votes, and I’m going to call both Sally Sheedy and Darrell Fong no votes, though I have a slight suspicion that Darrell Fong could be turned to the purple side.

Onto the science of word-parsing:

Angelique Ashby:

We have a real opportunity here. AEG is at the table. That’s great news. That’s terrific news.

This, for me, is not about a decision for what we do this week. It’s long term. A lot of the things we decide at this council…is how to fix things right now. We have a public safety problem, right now. We have three browned out fire stations, right now. But this…is a half-million dollar investment in long-term solutions, so we don’t have the urgent ‘right now’ discussion every year. If we play our cards right and we invest wisely, and we make smart decisions, we can come out of this with multiple economic engines.

Me: Real opportunity, long-term solutions, we can come out of this with multiple economic engines. She’s a yes.

Steve Cohn:

Let me be real clear, this work has to be done. If we’re even going to consider an arena, this has to be done. If one has the point of view that we shouldn’t be doing an arena, obviously it’s a waste of money, and we should stop right here. But I think if we’re open to the idea that we might find the public-private partnership that works, then this work has to be done and it has to be objective information.

Me: He voted yes to authorize the spending, which presumably he wouldn’t do if he opposed the arena given his comments. And he hung out with Slamson and KJ at a district meeting in May, so if he’s not a ‘yes’ he’s on the fence and leaning hard that way.

Bonnie Pannell:

What I heard this week….is we need jobs. Seniors are talking about ‘we need jobs,’ and our young people are talking about ‘we need jobs.’ There are no jobs in Sacramento. So what do we do? Do we take a chance and invest $500,000 that could lead to billions of dollars, or many jobs?

We need jobs, many more jobs, so I have to take a chance. We can’t depend on the federal dollar…state dollars…our destiny is in our hands. So I have to support this next step.

Me: Jobs, jobs, jobs. Jobs. Billions of dollars? Many jobs? Almost like she was reading from the Think Big brochure. Yeah, she’s in.

Jay Schenirer:

I talked (in my campaign) about my opposition to the city giving away land. This is something very different here, which is a city owned property (an arena), and an asset we will have for a very long time. We saw Sacramento build the Crocker Art Museum, and put millions of dollars into it, and I think that it has become a jewel of the city. And I would look forward to this facility, this complex, being something similar. And what it can bring to the city will be incredibly important.

Me: Incredibly important, jewel of the city, that’s a yes.

Kevin McCarty:

I don’t want to be a naysayer, but this project is still a long-shot. It’s a shot, more than we had before, but it’s still a long road to hoe. With that, I’m thinking, if we can find some tools that we can invest in our downtown, whether it’s an arena or a California academy type thing in the railyards or anything else, we may not have an economic development tool anymore, such as redevelopment or the really limited opportunities to make sense of the investments.

Me: I don’t know what that means, either. That he thinks the project is a long-shot puts him on the fence for me, and probably leaning no.

First things first, none of these folks are going to sign off on something that they don’t agree with, so the Think Big Sacramento coalition still has to provide a viable proposal to them. But this issue didn’t just pop up overnight. These officials, for the most part, have a strong grasp of arena politics after 10-plus years of talking about this topic to no avail.

Looking at my ridiculously unscientific analysis I’d say that four of the five are either a yes or leaning that way. They only need three of the five to vote yes after counting K.J.’s and Rob Fong’s vote.

As always, the devil is in the details, but if you’re a Kings fan or a fan of teams staying put – then tonight’s meeting was an unqualified victory.

Maloofs give up part of casino to erase debt, is that good for Sacramento?

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The conventional wisdom has been that part of the reason the Maloof brothers worked so hard to move their Sacramento Kings to Anaheim was to deal with debt problems — they were so overrun with debt in other areas of their lives they needed to moved the Kings to a higher-revenue place.

That may not have been true — there were signs to the contrary — but it is all moot now. The Maloofs have wiped out their debt problems at the Palms in a deal with creditors, according to the Sacramento Bee.

The owners of the Sacramento Kings have surrendered controlling interest in their Las Vegas casino, in a deal that they say improves their finances considerably.

After months of negotiations, the Maloof family announced Tuesday that it has reached a “recapitalization” agreement with the Palms Casino’s main creditors, investment firms TPG Capital and Leonard Green & Partners.

Co-owner George Maloof said the deal erases the Palms’ debt but leaves the family, which built the trendy casino a decade ago, with less than 50 percent of the equity. That gives controlling interest to TPG and Green.

The Maloofs still have a share of and will operate the trendy casino.

What does that mean for the chances of the Kings staying in Sacramento? Hard to say, but if you believe that the Maloofs debt was the pressure forcing the move to Anaheim, then that pressure has been relieved. Which should give Sacramento a better chance. George Maloof told the Bee that the family is in a much better financial place now with this deal.

But it really all comes down to the plans and financing for a new arena. If that can get approved, in whatever form, the Kings will stay. If not, we’re all going to Disneyland.