Sacramento City Council faces another arena vote

04/03/2012 12:00 AM

04/03/2012 10:04 AM

The Sacramento City Council tonight faces another key vote on the funding of a $391 million downtown sports arena. This decision, however, comes with a new layer of uncertainty, and a rising level of frustration among council members.

So what happens tonight?

City staffers are asking to move forward with crucial pre-development tasks for the arena, some of which are scheduled to start Wednesday morning.

What's the uncertainty and frustration about?

According to a nonbinding term sheet, the city is supposed to commit $6.5 million for pre-development work, the Kings $3.2 million, and arena operator AEG another $3.2 million. The Kings balked, saying they never agreed to contribute to the pre-development work.

To keep the process moving, NBA Commissioner David Stern stepped in to front $200,000 of the Kings' share. That $200,000 is all that would be spent over the next two weeks. The council is not being asked to kick in city money until the dispute is settled.

What if the council doesn't like that arrangement?

Any "no" vote by the council at this point likely derails the arena project. Insiders at City Hall still think tonight's vote will pass, but not without some pointed comments aimed at the Maloofs.

Speaking of the Maloofs, why is the family that owns the Kings balking?

The Maloofs have pledged $73 million toward arena construction. But co-owner George Maloof said last week none of the team's money should go toward pre-development costs, because the team is a tenant, not the building's owner and developer. His family also opposes a requirement that it reimburse AEG its $3.2 million in pre-development expenses if the deal falls through for any reason other than the fault of AEG.

Are the Kings trying to back out of the deal?

Maloof said the family is still committed to getting an arena built. The dispute, however, has fueled concerns at City Hall about whether the Maloofs will have the financial capacity and willingness to see the project through to the end. It's started to conjure up memories of the failed sales tax Measures Q and R of 2006, when the Maloofs backed out of an arena financing plan.

Why has the NBA stepped in?

Despite past failed attempts, Stern says he wants a new arena in Sacramento that allows the Kings to stay. He was personally involved in the negotiations over the project's financial plan in Orlando, Fla., in February, when he helped seal the deal by saying the league was prepared to assist in the arena financing process. The fact that he quickly stepped in last week with the league's checkbook has eased some fears at City Hall.

How does this situation get resolved?

It's unclear, but next week will be interesting. Stern said he will take the matter up with the league owners at their annual meeting in New York. Will he ask owners for permission to cover the Maloofs' share of the pre-development costs? Will he solicit other owners' help in arm-twisting the Maloofs?

Stern's representatives aren't talking. City officials say they don't know what Stern has in mind.

Is it time for the mayor to reconnect with Ron Burkle, the billionaire who said he'd be willing to buy the team if the Maloofs want out?

The mayor continues to say he is trying to make a deal work now with the Maloofs, who have repeatedly said they are not interested in selling.

What are the next steps for the city?

Consultants are scheduled to gather in Sacramento on Wednesday for a tour of the railyard, then launch into engineering, design and environmental studies. The city also has an upcoming meeting with transit officials to discuss integrating the arena with a planned transit center on the railyard site.

All that assumes a council go-ahead tonight.


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