February 23, 2013

Seattle judge rejects lawsuit to block Kings arena

Seattle's attempt to grab the Sacramento Kings withstood a legal challenge Friday, putting the onus back on Mayor Kevin Johnson to develop a plan to prevent the team from leaving.

Seattle's attempt to grab the Sacramento Kings withstood a legal challenge Friday, putting the onus back on Mayor Kevin Johnson to develop a plan to prevent the team from leaving.

A judge tossed out a lawsuit that could have seriously disrupted Seattle's plan for a new NBA-ready arena.

Sacramento officials weren't putting much stock in the lawsuit and are relying instead on their own proposal to secure the Kings.

Hours after the judge's decision, Sacramento City Manager John Shirey said he was encouraged by preliminary talks last week on arena financing with a group of wealthy investors who want to keep the Kings in town.

In a potential stumbling block for Sacramento, the investors at first asked if the city could contribute more than the $255 million it pledged to an arena deal last spring, Shirey said. City officials didn't present a counteroffer but, at a second meeting two days later, explained the details of the arena package approved by the City Council in March.

That second meeting "went well," Shirey said. "They had a greater appreciation for what had been offered last year."

City officials have said for weeks they don't expect to go beyond the $255 million pledged last spring.

Shirey wouldn't identify the investors, but it's known that financiers Ron Burkle and Mark Mastrov are contemplating a bid for the team and a proposal for a new arena.

Burkle and Mastrov would have to wrestle the Kings back from Seattle investor Chris Hansen, who struck a deal in January to buy controlling interest in the team from the Maloof family. Hansen would move the team to Seattle next season.

The NBA expects to decide the issue in mid-April – and has given Sacramento until next Friday to present its counteroffer. That's the point when the mayor expects to publicly unveil Burkle and Mastrov as his investors.

The arena component – essential to persuading the NBA to leave the team in Sacramento – could take several more weeks. Shirey won't ask the City Council for permission to negotiate an arena subsidy until Burkle and Mastrov's names are revealed by the mayor.

Although the council tentatively approved a $255 million subsidy toward an arena at the downtown railyard last spring, the deal was killed by the Maloofs.

A new proposal could involve a new location – Downtown Plaza – and could include other differences. Johnson has acknowledged he needs the council to vote again.

The judge's decision in Seattle eliminated a potentially devastating roadblock for Hansen. The International Longshore and Warehouse Union was trying to nullify a tentative agreement for $200 million in public funding for a new arena, claiming the building would snarl traffic at the nearby port.

For the Seattle purchasers, the court decision "is a monkey wrench that didn't happen," said union lawyer Peter Goldman. "I think this is bad news for Sacramento, honestly."

Sacramento officials, though, weren't depending on the union's suit.

"We are not relying on folks in Washington (state) to hold up the Seattle deal," said Sacramento City Councilman Steve Cohn. "We have to assume that deal is viable and come up with a competing proposal, or we lose."

The Seattle union argued that the October agreement was illegal because it essentially bypasses a state-mandated environmental review while committing the city and county to a new arena.

But Hansen, the city and county said no commitments have been made. "We're going to do an (environmental impact statement) before we make a decision," Hansen's lawyer Jack McCullough said in court.

That assertion could make things interesting when Hansen makes his pitch to the NBA in April. League watchers say the NBA will be reluctant to move the Kings to Seattle if it's unsure that a new arena will be built.

But sports-law expert Michael McCann of the University of New Hampshire said most NBA owners will understand that Hansen and his government allies had to convince the judge that there isn't a concrete plan yet for an arena – even if they fully intend to build one.

"The NBA appreciates the necessity of making those statements to win a legal argument," he said.

Hansen's plan still faces another legal challenge in Seattle. A taxpayer suit says the financing violates a voter-approved city ordinance that requires the city to make a profit on any public financing of a sports venue.

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