Sacramento Officials To Begin NBA Kings Arena Negotiations With Mastrov-Burkle Group
Sacramento officials said that they will "begin formal negotiations this week" with 24-Hour Fitness co-Founder Mark Mastrov and Penguins co-Owner Ron Burkle for a new NBA Kings arena, according to Bizjak, Lillis & Kasler of the SACRAMENTO BEE. They must "decide how much the massive redevelopment effort will cost, divvy up those expenses, come to an agreement on how to share future revenues -- and get it all to the City Council in the form of a preliminary 'term sheet' by early April." City staffers in a recent memo to the City Council "acknowledged that means most of last year's deal points may no longer be viable." But, the city and the developers are "benefiting from extensive research for last year's ill-fated deal." Sacramento City Manager John Shirey said that an "early April return to the council should give the public a couple of weeks for discussions before a council vote on whether to move forward on a project that would reform and redefine a key part of downtown." But a "major financing question for Sacramento has yet to be resolved: How much money will city officials feel comfortable putting into the mix?" In the arena deal last year with Kings Owner the Maloof family, the council agreed to $255M in city money, "most of it to come from a plan to leverage future downtown parking garage revenues." City Council member Kevin McCarty has "argued that is way too much money for the city to contribute." Other council members said that they are "waiting to hear more details from city staff before deciding." The Downtown Plaza location "creates a complicating factor for the city." City officials said that losing parking spots would "reduce the value of the city's overall downtown parking assets" (SACRAMENTO BEE, 3/5).
KEYS TO THE CITY: NBA.com's David Aldridge wrote the Maloofs still own the Kings, and that holds "significant sway among NBA owners." Owners "do not like to tell other owners to whom they should sell their teams." Sources said that they "believe the ultimate decision on where the Kings will play next season won't be made by the owners on the finance or relocation committees." Aldridge wrote, "The final call is, and remains, the Maloofs' to make." But that "doesn't mean the Maloofs couldn't ultimately decide to change their minds and swing their backing away" from the Seattle group led by hedge fund manager Chris Hansen and Microsoft CEO Steve Ballmer, if they are "blown away by the Mastrov/Burkle deal." Aldridge: "I believe the league, ultimately, wants to wash its hands of the Maloofs. And I think [NBA Commissioner David] Stern is genuine in his desire to give Sacramento a legitimate, fair shot at arguing its position to the Board of Governors." The Maloofs "aren't stupid," and they "know that selling to Mastrov means Burkle can make out big time, if the arena deal indeed is the economic catalyst for a revitalized downtown" (NBA.com, 3/4).