Sacramento Council Approves NBA Kings' Arena Negotiations With Local Investors
The Sacramento City Council yesterday gave its approval for the city to "begin negotiations with investors interested in building a new arena that would potentially keep the NBA Kings in town,” according to Bob Condotta of the SEATTLE TIMES. The measure, which “was approved 7-2, also called for $150,000 for attorneys and arena-financing experts.” The vote came “at the end of a roughly 90-minute discussion of the arena, which included comment from members of the public both for and against the project.” The vote “did not include any specifics concerning which investors the city will negotiate with, a location of the arena, or how much public money would be involved.” Sacramento City Manager John Shirey said that he “hoped to present a financing term sheet to the council by mid-April.” There were “several reports” that Sacramento Mayor Kevin Johnson “could unveil the ownership group during his annual State of the City address" tomorrow night. Johnson has a “self-imposed deadline of Friday to announce his ownership group and arena plan.” The vote last night “allows the city to begin officially negotiating with the team of investors, which is expected to include” Penguins co-Owner Ron Burkle and 24-Hour Fitness co-Founder Mark Mastrov (SEATTLE TIMES, 2/27). Shirey said, "Nothing gets approved until this City Council approves a preliminary term sheet and gives us the authority to proceed further." Most council members said that they were “comfortable allowing Shirey to work on that term sheet, knowing they will have final say over whether the plan is accepted” (SACBEE.com, 2/26).
DEAL DETAILS: In Sacramento, Lillis, Bizjak & Kasler in a front-page piece note Sacramento city officials “have acknowledged that while some of the deal points from last year's failed arena plan remain in place, the term sheet they will negotiate will likely be substantially different this time around.” The city will “negotiate with a potential new ownership group of the Kings and will explore building a facility at the site of Downtown Plaza after settling on the downtown railyard last year.” As it was in last year's “failed arena plan, the majority of the city's contribution is expected to be generated through the leveraging of downtown parking operations through either a city-operated finance authority or a lease agreement with a private operator.” That plan could "account for as much as" $250M. Land sales, ticket surcharges and assessments “paid by property owners near the arena are also on the table.” Assistant City Manager John Dangberg said that it was “the city's preference to own the arena and lease its use to the Kings and an operator.” Any arena agreement “must also come with a long-term commitment by the Kings to remain in Sacramento” (SACRAMENTO BEE, 2/27).
ENOUGH IS ENOUGH: In Sacramento, Marcos Breton writes, “Either the Kings stay or they go, but please -- no more limbo and time-wasting speculation beyond April when the NBA is poised to settle where the Kings will reside.” Breton writes, "A downtown arena to house the Kings and showcase premiere entertainment events could be a way to revitalize a sagging urban core, the primary reason I'd love for the team to stay here." Breton: "Should any of us be fans of subsidies for billionaires? No. Are many of us fans of downtown Sacramento? Yes. Absolutely.” If Johnson “follows through on his promise to recruit big-money equity partners to bid for the Kings as a downtown tenant, then great.” But if a Seattle bid to “steal the Kings proves too tempting for the NBA -- a strong possibility -- then let's move on as a community trying to position itself to flourish in the next economy” (SACRAMENTO BEE, 2/27).
DONE DEAL: Seattle City Council member Nick Licata said that it is “basically a ‘done deal’ that the proposed new Seattle arena will be located in Sodo, where investor Chris Hansen already owns a swath of land for developing his vision of a state-of-the-art basketball, hockey and concert venue.” In Seattle, Nick Eaton noted Licata’s comments came Monday morning “after the council got an update on the arena project.” The city and King County are “in the middle of a state-mandated environmental review for the proposed venue, including a study not just of the Sodo location south of Safeco Field but also the area" where KeyArena currently stands (SEATTLEPI.com, 2/26).