Ailene Voisin: What are the Maloofs up to on arena deal?

04/08/2012 12:00 AM

05/15/2013 6:22 AM

So here is the $3.26 million question: What are the Maloofs doing? Or better yet, what are they plotting?

This is a negotiation?

This mess?

Less than a month after the Kings' co-owners reached an informal agreement with the city of Sacramento, Anschutz Entertainment Group (AEG) and the NBA on construction of a $391 million sports and entertainment complex, the Maloofs have engaged in a series of public maneuvers that have their partners, long-suffering fans and even team officials shocked and embarrassed.

Among other things, the Maloofs are unwilling to pay $3.26 million in pre-arena development costs, saying major tenants never absorb such fees. They also have cited concerns about legislation designed to expedite the environmental process, never attempting to contact the author of the bill – Senate President Pro Tem Darrell Steinberg (D), a Sacramento native and one of the most powerful leaders in the state.

But here's the blow that has both baffled and infuriated Steinberg, Mayor Kevin Johnson, several City Council members and leaders of both political parties: team attorneys suddenly demanding access to documents and communications exchanged within the past year between Sacramento and NBA officials, including Commissioner David Stern.

In this city – in the capital of California – that's the political equivalent of extending the middle finger.

So I ask again. What are the Maloofs doing?

After the emotional public showing in Orlando, Fla., where the handshake agreement was announced in a televised news conference, Joe and Gavin Maloof were ecstatic and visibly emotional. Gavin Maloof later attended the City Council meeting and applauded the 7-2 vote moving the deal forward. Even the admittedly grumpy George Maloof seemed resigned and willing to abide by his older brothers' wishes.

But at some point these past several days – and for reasons that mystify many within the Maloofs' own inner circle – the dynamic changed dramatically. While only the family members and a few others have access to their financial portfolio, their recent actions have incited the following perceptions: They don't want a deal; they don't like this particular deal; they have resolvable issues but are negotiating in an terribly awkward, ill-advised manner; they can't get a decent loan for the deal and are panicking; or they are exploring their options, including filing for relocation.

Thus, the NBA board of governors meeting late this week figures to be fascinating, illuminative and very possibly decisive regarding the fate of the Kings. The Maloofs will address their peers and the commissioner, who advanced $200,000 when the family balked at paying the development fee.

If Steinberg is livid? If Johnson and the council members and other city officials feel betrayed? One can only imagine what Stern is thinking.

"My hope is to come out of the board of governors meeting with a confirmation that this is back on track," Stern told The Bee late last week. "Everyone involved deserves that."

He's right. The cost of the complex is an estimated $391 million. The cost to the region if this project fails? If prospects for jobs, hotels and parking around the transportation hub are squandered? The damage is incalculable, though, safe to say, economically devastating. (Visit the downtowns of Indianapolis, Los Angeles, Kansas City, then let's talk.)

Stern – who, by the way, was asked by the Maloofs to assume arena negotiations in 2006 – has expended enormous amounts of time, energy and expense in pursuit of an agreement. Besides putting together a coalition that includes league attorneys Harvey Benjamin and Joel Litvin, he sent out an entire marketing team to invigorate a depleted and demoralized sales staff when the Kings returned for 2011-12 at the board of governors' request.

The reasons for embracing Sacramento haven't changed. This is the 20th-largest television market and a one-team town. The history of fan support offers irrefutable evidence of the region's viability and sustainability; despite recent struggles that can be directly attributed to arena uncertainty and the only incrementally improving economy and on-court product, the Kings own two of the NBA's longest home-court sellout streaks.

Besides all of the above, the NBA has other problems, including ownership of the New Orleans Hornets and festering arena issues in Milwaukee, Minnesota, Oakland and Detroit.

Nor should we forget that Lt. Gov. Brian Krolicki – of Nevada – introduced Sacramento as a major player in the Reno-Tahoe bid for the 2022 Winter Olympics only hours after the City Council's March 6 vote.

Again, what are the Maloofs thinking?

They gave their word. They said none of the detail issues were "deal-breakers."

What are they doing?

The alternatives appear obvious. They can address their concerns in a shrewd, but respectful, manner. If they don't have the cash, they can bring in a major investor and redefine their role. If they don't want to do that, they can sell to someone with deeper pockets.

One NBA owner recently informed me that Ron Burkle isn't the only billionaire intrigued by the prospect of landing a plum in the politically rich Sacramento environment.


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