Sacramento Mayor Kevin Johnson on Thursday unveils his highly anticipated proposal on how to pay for a new downtown arena the latest and perhaps most critical step so far in his often dramatic two-year crusade to keep the Kings in town.
Representatives of the mayor's arena study group say they've identified enough public and private pots of money to build a $387 million sports and entertainment facility on city land in the railyard.
Johnson himself on Friday described the effort in epic terms. Saying his real focus is on jobs and economic development, not sports, Johnson called the project potentially "the city's greatest economic opportunity since the building of the Transcontinental Railroad."
But questions await. What exactly will the public be asked to pay? How will the Kings react to the plan? And, can the mayor meet the NBA's March 1 deadline to turn his "menu" of revenue options into a true financing plan, agreed to by all parties?
If not, the Kings owners have said they likely will petition the league for permission to move.
The team nearly bolted for Anaheim this spring, but agreed at the last minute to wait another year after Johnson flew to New York to make Sacramento's case to NBA owners.
Anaheim officials, meanwhile, plan an upgrade this fall of their Honda Center to help land an NBA team.
Thursday's unveiling is set for noon at the Sacramento Press Club.
There could be some new elements in the package, said Chris Lehane, a San Francisco-based political consultant serving as Johnson's Think Big Sacramento committee director.
But Lehane said the report mainly will contain details on the funding sources the group already has publicized.
Tens of millions of dollars in annual revenue would come from user fees, including ticket surcharges and added charges for parking in downtown garages.
Substantial amounts also could come from the sale of unused city parcels.
Private investors also have been solicited for what could be tens of millions of dollars in upfront financing in exchange for a share of arena revenue.
Lehane said he is confident the money plan works.
"It clearly will demonstrate there is a way that will fund an arena," he said. "We have identified funding options that are real, legal, and that the public should support."
Although the Kings opened their books to Johnson's group, the team has not participated in the work.
Kings co-owner George Maloof, who said he has not spoken with the mayor this summer, expressed eagerness last week to see the report, saying, "We're very optimistic it will be something we can work with."
Maloof has said the Kings only want to be tenants, not operators, of the new arena, and warned the team doesn't have much money for rent payments.
Once the team sees the proposal, Maloof said, "we will call the league and come up with a response."
Maloof said he is holding the city to the March 1 deadline. "They've got to deliver. Everything has to be in place, ironclad. No risk. No ifs."
Lehane said the deal has to make financial sense for the public, the Kings and other investors.
The team cannot expect the kind of sweetheart deal cities gave some NBA teams before the economic downturn.
"We all need to understand the economy has changed since 2008," Lehane said.
The plan will be presented to the City Council Sept. 13.
If the council decides to move forward, first steps are expected to include negotiations with private companies on partnerships to develop and operate the facility.
Johnson already has asked city staff to look into signing ICON Venue Group of Denver and its local partner, developer David Taylor, as project developer.
ICON and Taylor worked with the city earlier this year on a preliminary financing and site analysis, concluding that a project is doable.
ICON President Tim Romani said his company, which managed construction of Oklahoma City's arena, is interested in the job, but needs more details.
"We want to hear what kind of an arrangement" is being proposed, he said.
Lehane said the mayor's group also has talked with companies that operate arenas, including AEG of Los Angeles, about signing on as arena operator and investing private money in the facility.
AEG invested more than $50 million in construction of the Sprint Center arena in Kansas City, which it manages. It also is planning to build a $1.2 billion football stadium in downtown Los Angeles.
AEG officials could not be reached for comment.
The biggest question for many Thursday will be how much the public will be asked to pay.
The mayor's task force did not include any new broad-based taxes in its preliminary arena funding report this summer, nor any financial support from cities besides Sacramento.
However, the report identified 20 Sacramento city-owned properties that could be sold as part of the financing deal, raising $30 million to $60 million.
The mayor's team also has identified $2 million or more annually in hotel taxes that could be freed up for arena use next year when the Sacramento Community Center Theater debt is paid off. City officials, however, also are analyzing whether that money could be used instead to bolster the city general fund, which pays for basic city services.
The mayor's group also has talked with downtown business leaders, including hotel and restaurant officials, about setting up a self-taxing business district. Lehane said such a district would be made up of businesses that stand to gain financially from increased numbers of visitors drawn downtown by an arena.
Yet one leading local tourism official said he thinks the special district proposal is "still in the very early stages."
"I don't know that it's been fleshed out yet," said Steve Hammond, president of the Sacramento Convention & Visitors Bureau.