Sacramento has played its latest card. Now it wants to see what the NBA and the Kings can bring to the table in the effort to build a downtown arena.

With the City Council agreeing Tuesday to move forward with a key component of the arena financing plan, negotiators are scurrying to complete a "term sheet" in time for the March 1 deadline imposed by the NBA. The term sheet would be signed by all parties, including the league, the city and private developers, and would outline how the $387 million arena would be financed.

The city seeks a contribution of about $85 million from the Maloof family, which owns the Kings, multiple sources said. But it's not clear if the NBA – which is negotiating on the team's behalf – will agree, and negotiations are far from complete.

"I'm encouraged by all the things I'm hearing, out of all directions," said Sacramento developer David Taylor, who is part of the arena team. But he added, "There are lots of business points that need to be agreed to."

The term sheet, which city staff expects to present to the City Council on Feb. 28, would be nonbinding. But after a decade of false starts, the agreement would bring the city closer than ever to a new arena that would keep the Kings from leaving.

The city believes the financing plan would draw on a blend of sources, including the Kings' contribution, an expected $50 million from arena operator AEG and $40 million or so from the sale of public lands. Hotel taxes could play a role, too.

The city would provide the biggest piece of the puzzle by leasing out its parking garages and meters to private investors – a deal that could raise perhaps $200 million or more in upfront cash.

The City Council voted Tuesday to keep the parking process going, authorizing staffers to enter into deeper discussions with 11 potential bidders.

"I feel like the city can do its part, and then the negotiations will be between the Maloofs, the NBA and AEG to see if we can get a financing plan together," Mayor Kevin Johnson said last week. "But it won't be because we haven't done our part."

People involved in the project expect negotiations with the NBA and others to go down to the wire.

"Everyone is having to stretch here," said Assistant City Manager John Dangberg. "The city's going to have to stretch, the NBA's going to have to stretch. We're all going to have to go a little further than we're comfortable with."

The mayor's chief of staff, Kunal Merchant, said talks have been energized lately, due in part to the "impressive" number of companies ready to bid on the parking assets. "It's motivating us and other parties at the table," he said.

A source, who wasn't authorized to discuss the matter publicly, said NBA Commissioner David Stern's top lieutenants are involved in the talks. They include Joel Litvin, president of league operations, and Harvey Benjamin, executive counsel for business and finance.

The NBA declined comment Wednesday.

There's a possibility that the March 1 deadline – originally set by Stern last spring – could be extended. But with Anaheim upgrading its arena and eyeing another run at the Kings, Sacramento officials are pressing for a deal soon.

Seattle also may be readying a plan for a new arena, putting additional pressure on Sacramento. Citing city sources, the Seattle Times reported Wednesday that San Francisco hedge fund manager Christopher Hansen may unveil a proposal today for financing a new arena in that city, with the idea of luring an NBA team.

"We are all trying to make the deadline," Kevin Johnson said.

While the Kings would be tenants in the downtown arena, multiple sources said the city wants the team to make its contribution upfront – $60 million in cash and $25 million through the donation of land around Power Balance Pavilion.

Johnson declined to discuss the Kings' contribution, other than to say, "I think what we are asking (of) them is fair."

What's unclear is whether the Maloofs are willing or able to put in that much. The family has been hit hard by the economy and surrendered control of its Las Vegas casino to creditors. Co-owner George Maloof said last spring: "We are not going into this with a big checkbook."

But if the NBA likes the financial package, city officials expect the league could begin pressuring the Maloofs to bring in new investors or sell the team altogether.

A source familiar with the negotiations said Southern California billionaire Ron Burkle, who made overtures to the Maloofs last spring, is still interested in buying the team.

The Maloofs continue to insist the team isn't for sale.

The team, through a spokesman, declined comment on the situation Wednesday, except to say, "We are anxiously awaiting a detailed financing plan from the city."

Sacramento still hasn't laid out a plan for replacing the $9 million in annual revenue it would lose if it privatizes its parking assets. The City Council is sure to block the deal unless it's assured of replacement funds.

A source said the city is examining three revenue streams: advertising signs at the new arena, ticket fees and event-night revenue from a nearby parking lot owned by Sacramento County.

The city has asked about the lot, but the proposal hasn't yet "moved forward," said county spokeswoman Chris Andis. She said the lot has 650 spots that sit vacant at night.

City officials say they're confident they can make up the parking revenue somehow. "There's no arena deal without full protection of the general fund," said Merchant, the mayor's chief of staff.

The unanimous City Council vote Tuesday included the support of four members who just a week earlier had voted to place the parking proposal on the June ballot. Arena supporters said a ballot initiative might have crippled the deal or shown the NBA that there was little political will in Sacramento to build an arena.

Two of those council members – Sandy Sheedy and Kevin McCarty – now say they want to see an arena financing plan.

"I'm still out there hanging and waiting to see what the figures are," said Sheedy, who proposed the June vote.

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