NBA, Maloofs Back Kings Arena Proposal Involving Land Swap

Proposal To Build New Kings Arena, Entertainment Complex Unveiled Thursday

The NBA Thursday said that it is "backing a dramatic land-swap proposal that would move the State Fair to the Arco Arena site" and build a new Kings arena and entertainment complex "next to the downtown train depot," according to Bizjak & Breton of the SACRAMENTO BEE. The proposal was unveiled Thursday night by Sacramento developer Gerry Kamilos, alongside "international financiers and NBA executives." The concept is the "most spectacular of seven arena concepts submitted in response to a request from Sacramento Mayor Kevin Johnson." Details of the other submissions were unveiled Thursday night at City Hall, but NBA officials said that they and Kings owner the Maloofs support the land-swap concept "because it has what other proposals don't -- private investors willing to put up money." The Maloofs in a statement said, "We're committed to help any way we can." Baltimore-based Moag & Co. CEO John Moag, a consultant working for the NBA on the arena project, noted that the land-swap plan "has been in the works for nine months." Moag said that the Kings have agreed in concept to put $300M into the project in the form of a 30-year lease with $10M annual rent payments. Part of the Arco site is owned by the city, and part by the Kings, and Moag indicated that a $70M "loan the Kings owe the city would be retired in the deal." The arena would be "owned during that time by a private development group" including Kamilos, Sacramento developer David Taylor and "private cash partners." That group would "front the initial costs of an arena -- an undetermined amount -- with cash from the two key" supporters: Australia-based Macquarie Capital and California-based Pacific Coast Capital Partners. Johnson's arena task force is "expected to review the seven proposals and submit an arena concept to the mayor in March" (SACRAMENTO BEE, 1/15).

OUT WITH THE OLD, IN WITH THE NEW: In Sacramento, Kelly Johnson noted the NBA and Cal Expo, which would be sold and "used for new development" under the land-swap proposal, have been "negotiating for three years over a proposal to develop a sports and entertainment complex there as part of a larger plan to revitalize the state fairgrounds." Kamilos Thursday said that his group will "provide details of its financing plan in mid February." Moag said that the project would "probably require two years for entitlements," with the goal to "break ground in October 2012 or early 2013, and open in 2014." Moag noted that "until a sports and entertainment complex would be designed, it is impossible to estimate a price tag." He suggested that the "initial phase of an arena, parking garage and the payment to Cal Expo could run" around $675-700M (BIZJOURNALS.com, 1/14). FANHOUSE.com's Tom Ziller wrote the NBA's "quick reversal on the Cal Expo project is surprising." The viability of the land-swap plan "depends on where the money comes from." Ziller noted "no one expects the Maloofs to contribute much, and public funding will likely be limited to land and tax breaks" (FANHOUSE.com, 1/14).