Tag: Sacramento Arena

worried george

Report: All eyes on Board of Governors meeting in Kings arena dispute


In a story with many chapters, it’s fitting that the book on the Maloofs’ future in the NBA will be written on April 12-13 at the league’s Board of Governors meetings. After all, it’s where the tide turned for Kings fans last year, as Kevin Johnson came out of nowhere with both the will and the way to buy Sacramento time to get an arena deal done.

And it’s also fitting because a jury of one’s peers can be the most damning of all. It’s at those meetings that we’ll learn if David Stern and the other owners are going to allow their league and its fans to be subjected to reports like the one out of the L.A. Times last Thursday.

In that report, the writer was conveniently given access to letters from the Maloofs’ attorneys and pre-prepared comments from the family’s newly hired “crisis consultant” Eric Rose. Those letters disputed the Maloofs’ responsibility to pay pre-development costs of $3.26 million on the $391 million Entertainment and Sports Complex, or roughly one-fourth of the salary of free agent acquisition/albatross Travis Outlaw.

This, after the city agreed to fork over $256 million and AEG agreed to put in nearly $60 million to build a world-class arena with the Kings’ specific needs at the top of the list.

The most recent letter from Maloof attorney Scott Zolke doubles as a how-to manual on fighting the arena project, writing that the Maloofs are concerned about the project being completed on time while they simultaneously cause a delay by refusing to pay for pre-development costs they had already agreed to conceptually. The Maloofs backed it all up by sending pro-Anaheim brother George on a media blitz telling the world that Kevin Johnson, AEG, David Stern, and everybody that had been diligently working on a deal had it wrong – that nobody had talked about the cost structure of the agreement before barreling out of an Orlando hotel room with tears of joy.

Never mind that George Maloof said himself that the term sheet had been presented to them on February 17, a full 10 days before the handshake agreement took place, and never mind that the Maloofs still want to pay the full $73.5 million they agreed to pay. Never mind that every single source I’ve asked involved with negotiations has said unequivocally that the Maloofs agreed conceptually to the deal.

The reason the Maloofs’ move doesn’t make sense is that it doesn’t make sense. It’s like explaining JaVale McGee – it just is.

However you slice it, these are not the actions of an ownership group that wants to stay in Sacramento, and whether their motives are to get a concession now or down the road, or to jam up the deal so they can force a move down south – it’s time for the NBA to step up and mirror Sacramento’s efforts to clean up its own house.

The good news for Kings fans is that we’re already seeing indications of that happening. When news of the Maloofs backing out of their commitments hit last week, Stern immediately moved in to front $200,000 on the family’s behalf for pre-development costs. That was designed to keep the project moving until the BOG meetings when the matter will be discussed. And if Stern thought at all that the city should be held liable for those funds, he would have never showed a valued owner up over such a nominal dollar amount. Especially for guys who are viewed as having no money, paying $200,000 on their behalf just screams Natty Light (not that there’s anything wrong with that).

The other good news is that nobody in the city’s camp appears to be overly worried about the Maloofs’ most recent power play. The city council voted 7-2 to continue forward with the project, with the understanding that no city funds would be used until the matter is resolved at the BOG meetings. K.J. went on the offensive on Tuesday, calling the Maloofs’ recent actions “disingenuous,” adding:

We’re not going to be a city that sits on its hands. And we’ve gotten this far because we stood up and we’ve taken a stand on what we believe in. So do we need to look at contingency plans? Absolutely. What those are at this point, I’m not ready to share. But as I said, we don’t want to get caught flat footed. We need to make sure we’re protecting our community in all ways and we need to look at all of our options.

You can’t make public statements that say one thing and then privately be doing another. I don’t think that’s in the spirit of what we all thought and where we thought we’d be at this point.

He said much more than that, too, and none of what he said were the words of a man intimidated by the most recent developments. They were the words of a man that knows he has Keyser Soze in his back pocket. And whether Ron Burkle exists or not, the mere mention of his name and the fact that Johnson has an arena deal all-but done has stripped the Maloofs of nearly all the leverage that they once had.

They cannot complain that Sacramento hasn’t done their part, as the city has delivered on all of the promises it made to David Stern last year. According to Johnson, Stern admitted as much in a conversation they had:

In terms of that deadline, I was very clear. I talked to (the) commissioner a couple times this week and I told him that the New York meetings are critical for Sacramento. Because we can’t be in limbo – we can’t keep having the finish line moved on us. We all expected that we had an agreement, we thought we’d all be pushing in the same direction and there’s been countless tactics and antics that are just not becoming (of a) true partnership in my opinion. With that said, the commissioner said to me and insured me that the NBA governing board, the commissioner of the NBA, the relocation committee, the advisory financial committee – they all know what the facts are.

So it sounds like a couple days of reckoning are in the cards. I’ve got Aces Burkle over King Georges.

Stern says Sacramento arena deal comes down to paying up

NBA All-Star Weekend

It’s all about the money.

It’s always been about money when it comes down to getting a new arena built in Sacramento and keeping the team in that city. But now it has come down to pulling out the checkbooks and committing to dollars and the negotiations are intense.

When David Stern talked about issue he sounded like the Stern during the summer lockout press conferences — guarded, talking about “if” and not “when” there would be a deal, even though they would be close.

The issue is who ponies up how much — the city wants the Maloofs to put up $80 million or more.

“We’d like (Sacramento), on behalf of the Maloofs, to make the largest possible contribution,” Stern said. “The city would like the Maloofs to make the largest — both have come up with very substantial contributions. It’s really getting there. It’s just not there yet. And we’re looking for other ways, imaginative ways, to bridge the gap.”

Stern said he met with Kevin Johnson, and the NBA and Sacramento city staffs have met and spoken in detail Saturday, with another key meeting coming Sunday.

“We have several remaining points that will not necessarily be guaranteed to be bridged, but we’re going to give it our best shot tomorrow at a meeting that’s going to be attended by me and my colleagues from the NBA, by the mayor and his colleagues, by the Maloof family representatives, and by members of the Relocation Committee,” Stern said. “And we all consider ourselves to have a March 1 deadline to either come up with a financing plan and a critical path to the construction of the arena or not.”

Stern walked the line between optimistic and cautious with his words.

“The Maloofs have stepped up, the City has stepped up. We’re having very intense conversations,” Stern said. “Sometimes the best intentioned and most fervent workers don’t quite get to the finish line because there are things that separate them. But I’m most impressed by both sides….

“So we’re going to see whether we can bridge that gap. I think both sides deserve it, particularly the City of Sacramento.”

We’ll know a lot more in the next week.

Seattle fans, before you get too optimistic, Stern was not exactly selling your proposed new arena plan (which needs a lot of money, too) as an option.

“All I can say is that Chris (Hansen, the billionaire behind the Seattle arena plan), who I had met about a year ago, called us two weeks ago to tell us what was going to be announced that Thursday, about a letter laying out a plan, and we thought it was a — it sounded okay to us. Go for it. That’s all.”

Sacramento City Council takes unanimous step toward key arena vote

kings purple

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.

Kings Arena Update: Critical Sac City Council meeting postponed at last minute


It’s been a while since we checked into the Sacramento Kings’ arena situation, which almost faced another crucial moment on Tuesday when the Sac City Council meeting was set to turn into a shootout at the Cowbell Corral.

On one side, arena opponent and council member Sandy Sheedy was ready to force debate on whether or not the city should hold a public vote on the issue in June. On the other side sits a city council that I’ve profiled in the past as being receptive toward approving the approximate $400 million Entertainment and Sports Complex. Only one other council member, Darrell Fong, has joined Sheedy in voting against a handful of critical procedural issues so far. If a new arena deal is not finalized by March 1, the NBA and Maloofs are going to move the Kings to Anaheim.

By the way the city charter in Sacramento is set up, the elected representatives of the city council are supposed to vote on matters like these. Sheedy wants to depart from that history and bring the vote to the public, knowing full well that a vote in June would be pointless because the Kings would already be gone.

Why is she anti-arena?  It’s certainly not to save money for the city or to stand for economic principals. Sheedy is widely believed to be seeking political revenge against Kevin Johnson after she supported his run for mayor, but did not get a seat in his inner circle. Her seat is also up for grabs in the next council election, and with her district in economic chaos many of the city insiders I have spoken with don’t like her chances to repeat. This is her Hail Mary attempt at taking a position that is different from the pro-arena stance of her challengers, while trying to capitalize on an anti-arena sentiment that may or may not exist. It’s a gamble, but it’s also Sacramento politics at its finest.

More importantly to the reporting of whether or not it will be the Sacramento Kings or Anaheim Royals, Tuesday was going to force city council members to speak on the record about the arena once again. Specifically, they would have to either support or defend Sheedy’s obstructionist play. And just like the past meetings where council members were mostly transparent about their goals, we were going to get a real good read on where folks stood.

That is, until Ryan Lillis of the Sacramento Bee reported that Sheedy called a timeout.

Apparently known arena proponent and councilman Rob Fong couldn’t make Tuesday’s meeting and Sheedy wanted the entire council to be present. Maybe this is a simple coincidence, but with the clock ticking it also wouldn’t be surprising if the absence is related to her opposition. If we’re going down that road, it won’t be surprising to see her gain something in relation to the arena issue as well as her campaign, with the delay setting the stage for her to gracefully back off.

Then again, maybe Fong had business to attend to and Sheedy is going to both reschedule and show up dressed as a purple Grinch.

Either way, we’ll find out soon if Sacramento has the money and votes to pull off one of the bigger saves in modern civic history.