NBA sets deadline for new Sacramento Kings owners to build arena

Published: Saturday, Jun. 1, 2013 - 12:00 am
Last Modified: Wednesday, Oct. 1, 2014 - 5:30 pm

Sacramento has kept its Kings but is facing strict deadlines, imposed by the NBA, for building the team a fancy new arena.

Hours after Vivek Ranadive and his partners completed the record-setting purchase of the franchise from the Maloof family, NBA Commissioner David Stern revealed that the Ranadive group must meet "a series of benchmarks" for a new arena - or risk losing the Kings to another city.

If deadlines are blown, Stern told The Sacramento Bee, the NBA has the option of pulling the Kings out of Sacramento and arranging for the team's sale to new owners.

The Ranadive group agreed to the deadlines in writing, Stern said.

Stern said he doesn't expect Sacramento to miss its deadlines, but league owners insisted on the doomsday option "in the unlikely event" Sacramento can't get the arena project rolling in a "reasonable" amount of time.

The NBA is insisting that the building at Downtown Plaza open no later than 2017 - one year later than city officials forecast. The rival investors who tried unsuccessfully to move the team to Seattle agreed to similar deadlines, Stern said.

The new Kings owners - the eighth in the franchise's history - expressed certainty that they can build the arena by the deadline. Ranadive spokesman Adam Mendelsohn said the team is "absolutely confident about the timeline with the NBA and the commitments that have been made" to construct a new arena.

Ranadive's group closed escrow on the team's purchase early Friday - putting the finishing touches on a comeback that surprised Stern, the Maloof family and the rival bidders from Seattle. Back in January, when the Maloofs made their deal to sell the team to investors from Seattle, few in the league gave Sacramento much of a chance to keep the Kings.

"I thought that there was a greater likelihood that they were going to Seattle," Stern said in a lengthy phone interview.

Instead, the Ranadive group moved quickly this week to take control of the team and solidify its standing in Sacramento. By midday Friday, the Maloof Sports & Entertainment signs had all but disappeared from Sleep Train Arena.

Soon, Ranadive's group will control 72 percent of the Kings - the 65 percent purchased from the Maloofs plus a 7 percent share it will buy in U.S. Bankruptcy Court.

The deal closes out the Maloof era - a 14-year stretch that started with great promise but evolved into crumbling fortunes, dwindling attendance and more than one threat of relocation as the family encountered financial setbacks.

"We just feel it's Vivek's time, and we want to move on," former Kings co-owner George Maloof said Friday.

But Stern's disclosure about arena deadlines was a stark reminder that - despite Kings fans' euphoria over the team's new ownership - the team's future in Sacramento will remain somewhat uncertain until a new NBA-worthy building replaces antiquated Sleep Train Arena.

League owners insisted on strict deadlines in response to "very rosy predictions by both Seattle and Sacramento about the ease with which this building could take place," Stern said.

The Ranadive group expects to open a $448 million arena at Downtown Plaza in time for the 2016-17 season. Stern said the league has given Ranadive an extra year of wiggle room, but also has imposed deadlines that must be met along the way, including completion of environmental reviews.

(subhed) Strong ticket sales

Stern said he is mindful of potential obstacles to arena construction, including a possible voter initiative that could block the proposed $258 million city subsidy.

Despite his tough words about arena deadlines, Stern had nothing but praise for Ranadive, chief executive of a Palo Alto software company, Mayor Kevin Johnson and others involved in the effort to keep the Kings in Sacramento.

"I think he's going to be good; I think he's going to be very good," Stern said of Ranadive.

Stern said the Kings have already secured renewals from 70 percent of their season-ticket holders, and he believes sales will get even stronger in the coming weeks.

Mendelsohn said the Ranadive group is already moving ahead on arena plans. Co-owners Mark Friedman, Mark Mastrov and Jeff Jacobs interviewed project-management firms this week.

Friedman, a Sacramento developer, toured Bankers Life Fieldhouse in Indianapolis last week with two other Kings co-owners, Chris Kelly and Arjun Gupta. Tours of NBA arenas in Denver, Los Angeles and Orlando, Fla., are scheduled in the next two weeks.

"Everybody is moving as quickly as possible while also being as thorough as possible," Mendelsohn said.

The Ranadive group agreed to terms late Thursday with a new head coach, well-regarded Golden State Warriors assistant Mike Malone, according to reports in The Bee and elsewhere. The new owners confirmed late Friday they had fired current head coach Keith Smart but haven't yet made a formal announcement on his replacement.

Stern's optimism about the Kings was in contrast to his demeanor a year ago, when the Maloofs walked away from a tentative arena deal at the Sacramento railyard. Stern had committed the NBA to loan $67 million to the project and make a $7 million cash contribution. He said the Maloofs, after several financial setbacks, had reservations about taking on more debt.

The new arrangement, with new ownership, "is probably a better outcome for the Maloofs and the NBA and Kings fans," Stern said.

The NBA doesn't have to put any of its own money into the new arena deal, the Kings sold for a record sum and Stern said the fans "know for sure what's going to be happening."

While his displeasure with the Maloofs a year ago was obvious, Stern credited the former owners with taking the Kings to new levels during their 14-year tenure. "They did an extraordinary job for a number of years," he said.

(subhed) Time to move on

The Maloofs sold the franchise in a deal that values the Kings at an NBA-record $535 million. The Maloofs and their business partner Bob Hernreich walked away with $206 million, plus a $30 million nonrefundable deposit they were given by Seattle's investors Chris Hansen and Steve Ballmer in February.

"The valuation was fair, the timing was right, it was time for us to move on," George Maloof told The Bee on Friday. "We all feel good about it - it worked out."

Maloof revealed that his family entertained offers from three investor groups in the past year - the Hansen-Ballmer team, as well as a group seeking to move the team to Las Vegas and a buyer who promised to keep the team in Sacramento. He wouldn't identify the suitors from Las Vegas or Sacramento.

He said only Hansen and Ballmer stepped up with a firm offer, and a deal was made in January.

Sacramento had succeeded in keeping the Kings from moving to Anaheim in 2011. Nevertheless, the Maloofs and the Seattle investors assumed the path to Seattle was open. They were taken aback by the effort mounted by the mayor and the Ranadive group, Maloof said.

"We were all surprised," he said. "I didn't think there was a buyer (to keep the team in Sacramento). They should be commended; the mayor should be commended."

Stern said he was approached months ago about the Kings by Ranadive, already a minority partner in the Golden State Warriors. The commissioner introduced Ranadive to Johnson, who was recruiting investors to put together a counteroffer to the Seattle deal.

"Lots of people called us," Stern said. "We directed everybody to the mayor. There were at least two or three others, very substantial investors. As they came in, we told them, 'Don't call us, call the mayor.' "

With the sale now finalized, the Seattle group has surrendered its toehold on the Kings - a 7 percent share that Hansen had purchased in a bankruptcy auction in March. Hansen is canceling that purchase, and the 7 percent stake is being purchased by Ranadive, according to court papers filed Friday.

Ranadive is paying the same amount Hansen was - $15.1 million. The stake was owned by developer and longtime Kings investor Bob Cook, who helped bring the team to Sacramento from Kansas City in 1985.

Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

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