Sacramento arena battle travels to N.Y.
04/10/2012 12:00 AM
05/15/2013 6:22 AM
Sacramento's arena drama switches this week to Manhattan, where the Maloof family will ask their fellow NBA owners for support in forcing the city to negotiate a better deal with the team.
The Kings owners say they will bank on respect and understanding from the league's board of governors when they make their pitch behind the gilded doors of the St. Regis Hotel in midtown. They are likely to face opposition from David Stern, the NBA commissioner, who has a close relationship with Sacramento Mayor Kevin Johnson and was instrumental six weeks ago in crafting the deal the Maloofs are questioning.
Unlike last April, when Johnson and his entourage swept into the NBA board of governors meetings to make their case for Sacramento, Johnson said he doesn't plan to be in New York for the meetings Thursday and Friday.
City officials contend they have done what they needed to do. Now, they say, it is up to Stern and other NBA officials who helped negotiate the deal to persuade the Maloofs to get aboard.
"We've done everything we were asked to by the NBA," said Assistant City Manager John Dangberg, the city's point man on the arena. "We are hopeful the NBA and the team can bring back a solution."
For the Maloofs, the meetings could be pivotal. The family is expected to tell owners they never formally agreed to deal details, and that there are several elements in the tentative financing plan that need work before it gets their signature.
The Maloofs have declined to say publicly what their concerns are, other than their refusal two weeks ago to pay a $3.26 million share of the $13 million in pre-development costs the city says it needs to keep an arena project on track. The Kings also have objected to a proposal that they reimburse the would-be arena operator AEG its $3.26 million pre-development share if the deal falls apart without any fault from AEG.
Like the mayor, AEG representatives said Monday they won't go to New York and aren't interested in negotiating a new deal. "At this time, we've given as much as we can," said a company representative who wasn't authorized to speak publicly about the deal.
AEG has agreed to contribute $58.75 million to a downtown arena. The Kings agreed to put up $73.3 million. The city would shoulder the bulk of the cost: $255.5 million.
A source familiar with the issue said the Kings would like more decision-making authority at the arena. The team reportedly also has concerns about parking issues, wants more input on the design, and has issues with the proposed lease terms and revenue streams, among other sticking points. The current "term sheet" calls for the Kings to sign a 30-year lease.
NBA Commissioner Stern stepped in to temporarily patch over the first of those hurdles two weeks ago by agreeing to pay the first $200,000 of predevelopment costs, and said he would bring the issue before the board of governors. That $200,000 is enough to get work done through April 17, city officials said.
Speaking to the Bee Monday, team co-owner George Maloof said his goal in New York is to put the project "right back on track and start negotiating this thing again."
He said he expects a sympathetic hearing.
"I think the owners have a lot of respect for us, they always have, as we have for them," he said.
In recent days, Mayor Johnson and state Senate President Pro Tem Darrell Steinberg, D-Sacramento, among others, have said they suspect the Maloofs may be trying to undermine the deal.
Maloof said Monday that's not the case. "We have been upfront, we have been honest, we have been very truthful," he said.
This is the second successive April the Maloofs will have gone to New York to try to win their colleagues' support for major changes for the franchise. Last year, the league owners rebuffed their effort to move the team to Anaheim and gave the city of Sacramento a year to come up with an arena financing plan.
The Maloofs' more modest request this year – to negotiate more advantageous terms for them with the city – may face another tough audience if Stern is as committed to keeping the team in Sacramento as it seems.
Stern has shown his support for Sacramento in recent weeks, both in statements and in fronting the $200,000. Stern told the Salt Lake Tribune last week he was "hopeful" the process still would move forward, citing the city's $255 million contribution.
"I think the owners have an enormous respect for what Sacramento has done over the years in supporting an NBA franchise," Stern said. "And it's always been our first preference – particularly when government agencies or states are helpful – to keep a team where a team is if they're playing in a good facility."
A former NBA executive said Stern is unlikely to be open to re-negotiation after putting his weight behind the deal. "I don't think he would ever back out of something he agreed to do," the former executive said. "Once the boss is in, he's in."
Andy Dolich, a former executive with the NBA's Warriors, 76ers and Grizzlies, said the Maloofs could be boxed in. Owners of the Los Angeles Lakers and Clippers are likely still strongly opposed to having the Kings move to Anaheim. And, although the league is open to returning a team to Seattle, it doesn't want to do it at Sacramento's expense, Dolich said.
David Carter, director of the USC Sports Business Institute, said the dividing line in New York may be between the Maloofs' interest vs. that of league officials.
"An owner is attempting to craft a deal that is in his best interest short term," Carter said, "but that may not be in the NBA's best interest long term."
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