SBD/February 28, 2012/Facilities

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  • Sacramento, Kings Reach Agreement On Financing Plan For Downtown Stadium

    The city would shoulder more than half the cost of new arena and would own the facility

    Sacramento and the Kings have "agreed on the pieces of a" $387M arena financing puzzle that would keep the franchise in town another 30 years, according to a front-page piece by Lillis, Bizjak & Kasler of the SACRAMENTO BEE. Sacramento Mayor Kevin Johnson, NBA Commissioner David Stern and Kings Owners the Maloofs "emerged Monday to announce a handshake deal that even some of them had doubted could be done." Kings co-Owner George Maloof said that the deal would make the team "healthier financially, even in small-market Sacramento." He said, "I think it is a fair deal. We gave a lot. Everybody had to give. Sometimes you have to take chances, and we think this is worth taking." Under the agreement, the city would "shoulder more than half the cost of a new arena and would own the facility, with the Kings as tenants." The Maloofs said that they would put in $75M "upfront and provide the city with another" $75M in arena-related revenue over 30 years. A source said that yesterday morning, AEG, which operates the arena, "agreed to put in another" $10M to bridge a financing gap. AEG would pay $60M for the "right to operate the arena, up from its previous offer of" $50M. The new arena would be built in the downtown railyard. The agreement is "not formal." More negotiations "lie ahead, and officials say dozens of details must be worked out soon if they are to meet an accelerated construction schedule to open an arena for" the '15-16 NBA season. A source said that as arena owner, the city of Sacramento would "provide the lion's share of the project costs, somewhere between" $200M and $250M. Most of the city's share would come from a "still-evolving plan to wring millions in upfront cash from the city's parking operations" (SACRAMENTO BEE, 2/28). 

    FOLLOW THE MONEY: The Kings' share of the arena is "shrouded in uncertainty." The Maloofs said that they would "obtain financing to produce" $75M upfront. Some of that money would come from the "eventual sale of the old arena site." The team also agreed to "provide the city with about" $75M in game-night revenues. Much of that would "come from ticket surcharges." The Maloofs' financial commitment to the arena project "surprised some observers in light of their recent woes." But when asked how the family would get $75M, George Maloof said, "We can finance that." The NBA "may also assist in the deal, but the details aren't clear." Stern said, "(The owners) have authorized me to be as supportive as we could possibly be in this process so we could cement the future of the NBA in Sacramento." AEG is "expected to control a big share of the building's profits." A source said that the city would "share in the dollars if arena profits exceed a certain threshold" (SACRAMENTO BEE, 2/28). Though Stern on Saturday said that the NBA "would not be contributing money to the arena project, that stance apparently changed over the weekend" (ORANGE COUNTY REGISTER, 2/28).

    DECISIVE QUESTION: In Sacramento, Ryan Lillis notes the city's "decades-long fight for a new arena came down to a single question." Johnson on Sunday asked the Maloof brothers, "Are you committed to Sacramento?" Johnson yesterday said, "Each one of them, one after another, said, 'Yes, we want to be in Sacramento.' I knew at that point we had an excellent opportunity of making this deal happen" (SACRAMENTO BEE, 2/28). In Sacramento, Ailene Voisin writes the Kings -- and the community -- are on the "verge of writing one of the most improbable, memorable and sappiest stories in modern professional sports." Voisin: "Seriously, look around the NBA. These threatened relocation sagas rarely end happily for the home team" (SACRAMENTO BEE, 2/28). CSNBAYAREA.com's Ray Ratto said it was not Johnson keeping the Kings in Sacramento, although “he carried his end of the piano but mostly this is about the fact that the Maloof's holdings have been cratering for some time and they're really out of options. If Sacramento didn't happen there was really no place for them go because they were never getting into Anaheim, as desperately as they wanted it." They "had a better chance of going to San Diego and they didn't want do that and the Seattle arena is still a good four or five years away" (“Chronicle Live,” Comcast SportsNet Bay Area, 2/27).

    USEFUL PUSH: In L.A., Lance Pugmire notes the Kings' deal to stay in Sacramento is "likely a fatal blow to Anaheim's effort to bring an NBA team" to Honda Center next season. Had the Sacramento deal fallen apart, Anaheim was "standing by with arena operator and Ducks owner Henry Samueli willing to lend the Maloofs millions to help with the transition." George Maloof said that he and AEG officials "'never spoke' about the company's interest in assisting Sacramento as a way to keep a third NBA team out of the Southern California market." Maloof said, "Never part of the discussion." Meanwhile, the Honda Center "remains without an NBA team despite" a $20M upgrade that began this month to "help solidify its standing as a potential NBA home" (L.A. TIMES, 2/28). In California, Randy Youngman notes the Maloofs "reportedly had conversations with Honda Center officials recently" (ORANGE COUNTY REGISTER, 2/28). Also in California, Mark Whicker writes the "point is that Stern wanted the Kings to stay in Sacramento, and Johnson ... was dangling his political life over this ledge." Whicker: "So a franchise stays where it belongs. Bravo." Whicker added, "Without the Honda Center's push, Sacramento builds nothing for the Maloofs. ... The NBA will continue to find Anaheim useful. Its continued interest will be a useful option for other clubs" (ORANGE COUNTY REGISTER, 2/28).

    OFFER STILL ON THE TABLE: In Seattle, Bob Condotta writes, "Cheers from Sacramento on Monday don't necessarily silence Seattle's hopes of again hosting an NBA basketball team." That was the message from Seattle-area politicians and Seattle investor Chris Hansen, the "man behind the plan to build a new arena in the Sodo District that would potentially house NBA and NHL franchises." Hansen's group spokesperson Peter McCollum wrote in an e-mail, "The Sacramento announcement doesn't change Chris' proposal or his commitment to build an arena in Seattle. He has already purchased the land and put a serious offer in front of the City (of Seattle) and (King) County. It's up to the City and County now to evaluate that proposal and decide how they want to proceed" (SEATTLE TIMES, 2/28). CSNBAYAREA.com's Ratto said, “The reason why the NBA is happy about this is because they want to keep Seattle open for other teams that are looking to get out, including the team they own themselves, the New Orleans Hornets. So if Sacramento stays in place they can take New Orleans and move it to Seattle when something is ready up there” (“Chronicle Live,” Comcast SportsNet Bay Area, 2/27).

    Print | Tags: Facilities, Sacramento Kings, NBA
  • 49ers' Move To New Santa Clara Stadium Seen As A Done Deal

    Policy said a "disaster" is only thing possible to stop 49ers from moving Santa Clara

    Former 49ers President Carmen Policy said a "disaster is the only thing that can possibly stop the 49ers from going forward in Santa Clara," according to Tim Kawakami of the SAN JOSE MERCURY NEWS. Policy said, "I think that’s a fait accompli and they’re moving on." Asked when he thinks the Santa Clara situation "really solidified," Policy said, "Almost within days after the Collective Bargaining Agreement was finalized. It just seemed that everything turned with that." He said with the new CBA "not only enhancing the numbers for individual teams but also enhancing the kind of contributions the league can make to these new stadiums, it became apparent that if the Niners were willing to take the risk, that the stadium would get financed." Policy: "Make no mistake, the Niners are really putting a lot on the table here and ultimately they’re taking all the risk. I would venture to say that Santa Clara probably got the best deal any community’s ever gotten from an NFL franchise." Asked if he thinks the Raiders will be part of the move, Policy responded, "The only way I see the Raiders being any part of it is if there were just no other possible alternative and by that I mean any alternative, even moving." He added, "My understanding is that the league conditioned its support upon the fact that this would be a facility designed for two teams and that another team could be introduced as a co-tenant" (MERCURYNEWS.com, 2/27).

    Print | Tags: Facilities, San Francisco 49ers, Oakland Raiders, NFL
  • AT&T To Use Antenna At Chesapeake Energy Arena To Improve Wireless Service

    AT&T has become the third wireless provider “to use an antenna at Chesapeake Energy Arena in Oklahoma City that improves service during crowded events like Thunder games, and Sprint could be next,” according to Michael Kimball of the OKLAHOMAN. AT&T “went live on the arena's multicarrier distributed access system this month.” Some AT&T customers have “noticed improved service since the company began using the antenna, but there could be more changes in the future.” Wireless carriers pay about “$24,000 annually to access the $105,000 antenna.” Carriers also pay “a $6,000 startup fee.” Sprint and T-Mobile are “the only major wireless carriers who aren't yet using the antenna.” A T-Mobile spokesperson said that its customers “haven't reported problems with the signal in the arena and the company has no plans to hook up to the city's antenna.” But Sprint, an official NBA sponsor, is “kicking the tires.” Sprint Communications Manager Tom Cook said, “We are definitely looking at it. We have a site walk this week scheduled” (OKLAHOMAN, 2/28). SportsBusiness Journal this week looks at the connectivity challenges facing sports venues.

    Print | Tags: Facilities, Oklahoma City Thunder
  • New Jersey Horsemen Will Lease Monmouth Park For Up To 35 Years

    Horsemen’s association will pay $1 to lease the track for five years

    The New Jersey Sports & Exposition Authority board yesterday “authorized administrators to sign contracts to lease Monmouth Park for up to 35 years,” and the facility will now “be run by the New Jersey Thoroughbred Horsemen’s Association, with the handoff expected to occur May 1, 11 days before the start of the 2012 race meet,” according to Bob Jordan of the ASBURY PARK PRESS. A previous effort “to lease the track to real estate executive Morris Bailey fell apart in December.” But the thoroughbred horsemen “revived their earlier rejected bid, with rapid progress in negotiations in recent weeks.” NJSEA President & CEO Wayne Hasenbalg said that he hopes to “have all the lease documents signed by the end of the week.” The state “shed track management responsibilities at the Meadowlands in December,” but the tracks will “remain under state ownership.” The horsemen’s association “will pay $1 to lease the track for five years and will have the choice to continue operations over three consecutive 10-year options, through 2047, with rent increasing to minimums of $250,000 and then $500,000 during the options period.” The group also “will take over management of the Favorites at Woodbridge off-track wagering facility and be given an interest in the state’s telephone and Internet account wagering business.” Development of “future off-track wagering sites also is included in the package” (ASBURY PARK PRESS, 2/28). NJSEA VP/Legal & Government Affairs Ralph Marra said that the horsemen “were in discussions" with advisers to New Jersey Gov. Chris Christie "about finding ways to fund the purse for the $1 million Haskell, one of thoroughbred racing’s most important races each summer” (NORTHJERSEY.com, 2/27).

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  • Facility Notes

    Proposed bill would eliminate need for local contribution to stadium in Arden Hills

    In St. Paul, Doug Belden noted while the focus of Vikings stadium efforts "remains on trying to close a deal for a facility at the Metrodome site, alternative ideas keep coming." State Rep. Tom Hackbarth introduced a racino bill yesterday that would spend some of the estimated $132M in annual revenue on a stadium in Arden Hills, "eliminating the need for a local contribution." It would also "contribute to a St. Paul Saints baseball stadium proposed for Lowertown." Meanwhile, an announcement "on an agreement for a stadium at the Metrodome site is expected this week" (ST. PAUL PIONEER PRESS, 2/27).

    BUILDING IT SAFE: In Green Bay, Richard Ryman notes Miron Construction Co., the Packers and subcontractors, suppliers and labor union representatives yesterday "signed a strategic partnership agreement with OSHA and state regulators to reduce safety hazards during the Lambeau Field expansion project." OSHA said that the "voluntary program is focused on identifying and controlling safety hazards, improving safety and health programs, promoting a cooperative relationship between labor and management, and encouraging employee participation in safety" (GREEN BAY PRESS-GAZETTE, 2/28).

    FACILITY UPGRADE: In Tacoma, Don Ruiz notes CenturyLink Field in the coming seasons is getting a "new artificial turf on the field and new video boards in the end zones." MLS Sounders Senior VP/Business Operations Gary Wright said, "It’s an ongoing process of making sure we have a first-class stadium and all the latest enhancements. From a soccer side, it was important to upgrade the turf and get the best playable field possible." Work was "still being done on the video boards" yesterday, but players and coaches said that the new FieldTurf playing surface was a "major upgrade" (Tacoma NEW TRIBUNE, 2/28).

    CITY CLEAN UP: In Louisville, Marcus Green notes "hundreds of downtown property owners pay fees to help clean, maintain and promote the city’s business district," but KFC Yum! Center's owner has "resisted making its payment for more than a year, arguing that the city law establishing the fees doesn’t apply to the arena." Though an agreement "may be in the offing," the dispute "may yet result in an ordinance that would exempt the authority from an annual contribution, which was more than" $211,000 based on last year’s value of its property. Arena authority General Counsel Ed Glasscock said that he "hopes to resolve the matter in the next week" (Louisville COURIER-JOURNAL, 2/28).

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