In a lawsuit challenging the downtown arena deal between the city and Kings basketball team, lawyers on both sides will present their closing arguments Wednesday morning in Sacramento Superior Court.
Three city residents – neighborhood activist Isaac Gonzalez, retired state consultant Jim Cathcart and Julian Camacho, also a state retiree – contend the city committed fraud by hiding the full value of its investment.
City officials counter that they didn’t hide anything and contend their accusers are trying to disrupt the project because they don’t like taxpayer funds being used.
Testimony in the 10-day trial concluded Tuesday. Judge Timothy Frawley said he will give each side 40 minutes Wednesday to sum up its case. He directed both sides to submit written arguments as well to the court on Friday.
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Frawley declined to say when he will rule, and he indicated he may not have time to review final arguments until the end of next week.
The city agreed in 2014 to put $255 million in cash and land value toward construction of a Fifth and K streets facility to replace outmoded Sleep Train Arena in Natomas. The new arena is under construction and expected to open in October 2016.
The city also gave the Kings control of 3,700 parking spaces at the former Downtown Plaza site and entitlements to build six digital signboards rent-free on city land next to freeways.
The Kings have demolished about 1,000 of those spaces to make room for the arena but have not yet begun building the billboards.
The plaintiffs, represented pro bono by local attorneys Patrick Soluri and Jeffrey Anderson, contend the parking and billboard rights represent a secret city subsidy to compensate the Kings investors for overpaying for the team in a bidding war against a group that wanted to move the team to Seattle.
Speaking outside of the courtroom, Soluri and Anderson said they will highlight city documents – that they introduced during the trial – during their closing argument. Those documents show the city knew those deal “sweeteners” had substantial value that the city chose not to reveal publicly, they said.
“We believe we put on evidence that shows there was a private agreement ... to convey a public subsidy for purchasing an overvalued franchise ... that was not disclosed to the public,” Soluri said.
The city is represented by Meyers Nave, a Bay Area-based law firm that specializes in helping local governments defend large development projects from legal challenges. City officials estimate the lawsuit is costing Sacramento $2 million or more.
Assistant City Attorney Matt Ruyak, also speaking outside of the courtroom, accused the plaintiffs of tossing unproven theories against the wall in hopes some will stick.
“They are constantly shifting their theory of the case,” Ruyak said. “All their theories are wrong.”