NBA Kings Arena Price Tag Goes Up, With Owners To Pay An Additional $30M
The price tag for the new NBA Kings arena set to open in '16 "just went up, and the team’s development deal with the city has undergone significant changes," according to a front-page piece by Kasler & Lillis of the SACRAMENTO BEE. Terms released by the city yesterday "shows its planned contribution to the project has actually been reduced" to $255M and the Kings’ owners will pay for the additional $30M for a total of $222M. The higher costs "reflect the Kings’ decision to move their practice facility out of the arena itself" and into an adjoining building at the east end of Downtown Plaza. The higher price tag brings the project's total cost to $477M. City officials said that the revised agreement "gives them a larger and more reliable share of the revenue generated by the arena." Kasler & Lillis note financing "won’t be in place for several months." City officials said that they will present City Council "with proposals for interim financing." Kings President Chris Granger said that team ownership would "put up the cash for the early months of construction to keep the arena on track." The city’s "contribution to the project was pegged at a maximum" of $258M, and the Kings "would be on the hook for additional costs." Among other changes, the Kings have now "committed to making lease payments" of at least $6.5M a year, with "the amount expected to grow." The team previously had "estimated it would pay" $4.7M annually, "depending on the arena’s profitability." The annual payment will jump to $7.5M in '21 and will "grow by at least" 3% per year after that, depending on inflation. City officials said that the team’s payments "could grow" to $18M or more (SACRAMENTO BEE, 4/22).