NBA, City Of Sacramento Say Deal On New Downtown Kings Arena Within Reach
In a show of "unity and optimism, Sacramento and the NBA say a deal is within reach on a new downtown arena for the Kings," according to a front-page piece by Kasler & Bizjak of the SACRAMENTO BEE. Mayor Kevin Johnson and NBA Commissioner David Stern "issued an unusual joint statement Wednesday expressing confidence on" the $387M arena, while "outlining a hectic two-week calendar crammed with negotiations and other maneuverings." The parties will meet this weekend in Orlando at the NBA All-Star Game. Sacramento and the NBA said that they "hope to announce they have reached a financial 'term sheet' by the league's" March 1 deadline. The term sheet, "essentially a non-binding framework, would go to a City Council vote" March 6. That is a week "later than originally scheduled, but city officials said it's not a sign that negotiations are stalled." Rather, they said that it "gives the City Council five days to digest the plan." Johnson said, "We're really close to pulling this off. We're closer than we've ever been before." Kings Owners the Maloofs have "remained largely in the background as talks progressed the past few months, with Stern's top deputies negotiating on their behalf." The "bulk of the city's contribution would come from a plan to privatize city parking operations, which could generate as much as" $200M in upfront cash. Along with a TV interview late Tuesday, yesterday's statement "marked Stern's first extended comments about the Kings' future since last May." Stern's TV interview "created confusion about the Kings' share of the financial package." Without offering dollar figures, Stern said the Kings have "agreed to a substantial contribution." But he added that that would "include the sum contributed by arena operator" AEG. Johnson "wouldn't discuss specifics, but said he and Stern both understand that the Kings' contribution is separate from AEG's." Sources have said that AEG is "in line to put in" $50M, while the Maloofs "will be asked for" $85M. Both sums "would be upfront." Kasler & Bizjak note nothing would be "binding until the city actually signs a deal with a private investor for the parking assets." That "might not happen until summer, and could require another council vote" (SACRAMENTO BEE, 2/23).
STICKING POINT: The AP's Antonio Gonzalez noted the "major sticking point in negotiations remains how much the Kings will contribute." A source said that under the proposed agreement, the city of Sacramento will raise about $190-$230M by "leasing out parking garages to private investors." The source said that another $75-$100M is "expected from the Kings," and $40-$60M from AEG. The remaining gap will be "covered by some combination of a ticket surcharge, advertising around the arena, allocating a portion of the city's existing transient occupancy tax or a sale of three or four parcels of city land." The final price tag for AEG "depends largely on the team's contribution" (AP, 2/22). A SACRAMENTO BEE editorial states Stern's "latest statements may be mostly a negotiating tactic." But if he is "drawing a line in the sand, it threatens a deal to finance a new Sacramento arena." Stern is "suggesting that money put in by AEG, the presumed arena operator, should count toward the contribution of the Kings, who would be the anchor tenant." The editorial: "The city needs to stand firm against that idea. It would make a deal very difficult to do for city leaders and the taxpayers they represent" (SACRAMENTO BEE, 2/23).
NEED A COMMITMENT: In Seattle, Bob Condotta notes construction on a new arena in the city "won't begin until teams in the NBA and NHL agree to come to Seattle." The Kings and Coyotes had been "considered the two teams most able to relocate quickly." Should the Kings and Coyotes "stay put, however, it does not mean the Seattle arena proposal is dead" (SEATTLE TIMES, 2/23).