SBD/April 2, 2012/Facilities

Sacramento Delays Payments On Kings Arena Until Dispute With Owners Is Resolved

Maloof family insists it never agreed to cover pre-development expenses
Facing a "major rift" with the NBA Kings over funding the new downtown sports arena, Sacramento city officials “are postponing the expenditure of any city money until the dispute is solved,” according to a front-page piece by Kasler & Bizjak of the SACRAMENTO BEE. City officials said Friday that the postponement “would not stall the project.” Instead, the city “would be able to move forward with environmental reviews and other crucial pre-development tasks over the next two weeks, spending up to $200,000 advanced by the NBA on an emergency basis late Thursday.” The City Council “is still expected to vote Tuesday whether to spend $6.5 million on the pre-development costs,” but none of the money “would be spent while the fight with the Kings persists.” Following hours of meetings Friday, the city “crafted a place-holder plan designed to keep the project on track for the time being while putting council members at ease.” With the league’s money in hand, the city “won't have to spend any of its own money for now.”  However, the council “will be asked to give city staff the authority to approve a funding agreement with the Kings and other parties to cover pre-development expenses, even though there's no signed agreement yet.” The approval would be contingent “on the agreement being signed.” Kasler & Bizjak noted the dispute with the Maloof family “clearly rattled officials at City Hall on Friday.” Council member Steve Cohn said, "We need some assurance that we really have a deal before we spend the city's money.” Cohn was “comfortable with the interim plan” and said, "If we're only spending the NBA's money, that's fine." Kings co-Owner George Maloof “continued to insist Friday that his family never agreed to cover the pre-development expenses.” But he also said that the Maloofs “remain committed to building the arena and staying in Sacramento” (SACRAMENTO BEE, 3/31).

IN HIS OWN WORDS: In a Q&A with George Maloof, SI.com’s Sam Amick asked how people should view these recent events. Maloof said, “There's still hope, a lot of hope. I think that we can get it done, but I think people have to realize that it's a process. But when you're dealing with the public and you're dealing with three parties, you don't always agree. That's part of negotiating a deal.” Amick pointed out the non-binding term sheet and said it seemed as if the family “had agreed to pay that portion of the pre-development fees.” Maloof said, “We've stretched ourselves on numerous occasions, but at the end of the day it's part of the process. I know it's a public deal, and I think the public should be informed. We're prepared to move forward and get it done at that site, but it's got to be under the right terms for everybody.” On the notion that the owners want to move the team, Maloof said, “We're not secretly talking to anybody else nor would we do that.” Amick asked, “No discussions in the background with Anaheim or anybody else?” Maloof: “No. Absolutely not. Absolutely not” (SI.com, 3/31).

THE PUBLIC OPINION: A SACRAMENTO BEE editorial stated, “The deal for a new Sacramento arena will only work if all the partners are committed to it and can trust each other.” It is “true that the ‘term sheet’ between the partners … was not legally binding.” But it was “a good-faith agreement.” If the Maloofs “insist on playing hardball over their initial payment, it renews doubts on whether they actually have the cash for their part of the arena deal, or the wherewithal to be NBA owners at all” (SACRAMENTO BEE, 3/31).
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Franchises, Sacramento Kings

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