Sacramento, Kings Reach Agreement On Financing Plan For Downtown Stadium
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).