Now that Mayor Kevin Johnson has bagged his "whales," the pressure is on Sacramento to make good on the second part of its over-time effort to keep the Kings basketball team.
City Manager John Shirey and his arena financing negotiators must come to an arrangement with the deep-pocketed private investors on how to demolish part of Downtown Plaza and replace it with an arena, at a price tag estimated at $400 million.
They have only three weeks to get the bulk of a deal done, but officials say they're confident.
Unlike last year, when the Kings' owners backed out of an arena deal with the city, both sides are said to be focused on making a deal work, and they already have agreed on basic concepts, said Assistant City Manager John Dangberg.
"All parties agree (this time)," Dangberg said. "We will be able to put together a substantial set of terms. We will get there."
City officials say they and their consultants and attorneys will begin formal negotiations this week with businessmen Mark Mastrov and Ron Burkle, the two so-called "whales" who last week went public with their hopes of buying the Kings and teaming with the city to build a downtown arena.
They must decide how much the massive redevelopment effort will cost, divvy up those expenses, come to an agreement on how to share future revenues – and get it all to the City Council in the form of a preliminary "term sheet" by early April.
In a recent memo to the council, city staffers acknowledged that means most of last year's deal points may no longer be viable. But, the city and the developers are benefiting from extensive research for last year's ill-fated deal.
Shirey said an early April return to the council should give the public a couple of weeks for discussions before a council vote on whether to move forward on a project that would reform and redefine a key part of downtown.
Sacramento officials say they want a solid arena financing framework submitted to the NBA by mid-April, before the league's board of governors convenes on April 18.
The Kings' majority owner, the Maloof family, has signed a tentative deal to sell the team to a Seattle group. That group has a preliminary agreement with local governments there to partner in building a new arena south of downtown. The NBA board of governors is expected to vote to approve or reject the Seattle sale at that April meeting in New York.
Sacramento Mayor Kevin Johnson announced Thursday night during his State of the City address that he is championing a local group led by 24 Hour Fitness founder Mastrov of the Bay Area and Southern California billionaire businessman Burkle to persuade the NBA to nullify the Seattle deal.
"With all due respect to Seattle, I absolutely do wish them well and I do hope they get a team someday," Johnson said. "But let me be perfectly, crystal clear. It is not going to be this team. Not our team. No way."
If the NBA nixes the Seattle deal, Johnson said he hopes the Maloofs would agree to sell instead to Mastrov and Burkle. Mastrov submitted his group's bid to the NBA on Friday. Sources say it will be forwarded to the Maloofs as a potential "backup" offer.
A source with knowledge of the Mastrov/Burkle bid said it is very close to and competitive with the Seattle offer, which values the franchise at $525 million. That implies a $341 million payout for the 65 percent controlled by the Maloofs.
But for Sacramento's offer to be taken seriously, the bid must include definitive plans for a new arena, NBA officials said.
A major financing question for Sacramento has yet to be resolved: How much money will city officials feel comfortable putting into the mix?
In the arena deal last year with the Maloof family, the council agreed to $255 million in city money, most of it to come from a plan to leverage future downtown parking garage revenues.
City Council member Kevin McCarty has argued that is way too much money for the city to contribute. Other council members say they are waiting to hear more details from city staff before deciding.
City officials say the value of the city's parking assets may be less now than last year's analysis showed. They expect a report back in the next couple of days from a parking consultant. Those results will then be forwarded to the city's financial advisers – Goldman Sachs and Morgan Stanley – which will develop estimates on how much the parking assets are worth.
City Treasurer Russ Fehr will also run a risk analysis on the numbers and report his findings and recommendations to the council.
The Downtown Plaza location creates a complicating factor for the city. An arena there likely would take out 1,000 of the 2,000 parking spots at the site, officials said, and might force reconstruction work to make the remaining spots usable. The loss of those spots would reduce the value of the city's overall downtown parking assets, officials have said.
Seattle officials, meanwhile, are experiencing some drama of their own.
An attorney for a longshore and warehouse union has said he will file a lawsuit-ruling appeal Tuesday, seeking to force that city and a private group to redo its environmental analysis for an arena. That group is challenging the choice of south of downtown as an arena site. A Seattle judge threw out the initial lawsuit in February. Union attorney Peter Goldman said he will contend the judge was mistaken.
Call The Bee's Tony Bizjak, (916) 321-1059. Follow him on Twitter @tonybizjak.