Vivek Ranadive talks Kings, DoCo and his new luxury condo
Five years ago, a group of out-of-town heavyweights – Sacramento called them The Whales – swooped in to buy the city’s beloved Sacramento Kings and keep them from leaving town.
They brought with them big money, big promises and dramatic plans to create something in the heart of Sacramento they said would be “bigger than basketball.” Oh, and they pledged to make one of the saddest franchises in professional basketball a winner again.
So, what’s the state of the kingdom, both on and off the court? Their report card reveals a mixed bag of successes and as-yet unfulfilled promises.
Five years ago, the Kings struck fast, tearing down the failing Downtown Plaza mall and building a modern Olympus downtown, the Golden 1 Center. The arena opened with a Paul McCartney concert in 2016 and has emerged as one of the nation’s top entertainment facilities.
That was followed by a 16-story luxury hotel and condo tower overlooking an emerging shopping and entertainment district called Downtown Commons. Those projects had some stumbles, but the DoCo site is now 80 percent filled, with eight new restaurants and shops opening since summer – including a champagne bar last week – and a half dozen more are scheduled to open in the weeks ahead.
But two blocks to the east, there’s still a hole in the ground on K Street where the Kings and a development partner have pledged for several years to build apartments. They were granted control of the land through a public subsidy deal with the city to build Golden 1 Center.
And, despite a pledge to move quickly to redevelop the team’s former home in North Natomas into a community-boosting redevelopment project, that site remains empty, with no plans on file.
At the same time, the Kings organization, both on the court and on the business side, has seen notable turnover.
The franchise ownership’s chairman, tech tycoon Vivek Ranadive, says he has “the best team” leading their business operation. But more than a dozen high-level employees have left in the past two years. And the team drew unwanted headlines this summer when it was revealed federal authorities were investigating a former executive for embezzlement. The team also found itself in court over a cost dispute involving the construction of its hotel and condo tower.
On the court, the new Kings’ group at first centered its hopes on a volatile star, DeMarcus Cousins, then switched gears by trading him and launching yet another rebuilding process focused on young and athletic players who can run, gun and hopefully bring excitement back to Sacramento basketball.
The team hasn’t made the playoffs in 12 seasons – the longest active streak in the National Basketball Association – and there is little talk of that happening anytime soon. Only four franchises have won fewer games over the past five seasons.
A little more than five years after taking control of the Kings, the Ranadive-led ownership group is facing what could be a pivotal year in its relationship with a loyal fan base. A season-opening loss to the Utah Jazz drew a sellout crowd, but some fans say the honeymoon period associated with the new arena will end if the team doesn’t improve.
Speaking to The Sacramento Bee before the Kings season opener last week, Ranadive was upbeat, laudatory of his executive team, and said the franchise is making good progress on and off the court. That includes partnering with African American community leaders to provide youth forums after the police shooting of Stephon Clark earlier this year and leading a coalition of nine professional sports franchises encouraging fans to register to vote.
But, he said, the job is not complete.
In particular, Downtown Commons, he said, was finally evolving into the “21st Century town square” he had imagined. Then, turning to look at his top two Kings executives seated at a conference table next to him, he added: “We’ve got a long ways to go.”
The Kings’ ambitious six-block DoCo project has gone slower than originally projected, but has picked up in recent weeks, and the district has taken on the feel of a daytime gathering spot.
Downtown workers pack restaurants during the lunch rush and play corn hole on the plaza in front of the arena doors. An artificial green space in the commons is home to free yoga, Zumba, silent discos and movie nights. A concert on the plaza by hip-hop artist B.o.B after Wednesday’s game drew 5,000 people, the team said.
And Kings fans were already at the Yard House sports bar four hours before Wednesday’s opening home game.
“It’s taking shape,” Ranadive said. “I want to light it up so it becomes a happening place every day of the week.”
The Kings development aspirations extend well beyond the borders of DoCo. The team was granted control of several key properties as part of the public subsidy they received from the city of Sacramento to aid in the construction of Golden 1 Center. So far, there’s been little progress made at those other sites.
The largest of those properties is the 185 acres surrounding Sleep Train Arena in North Natomas. Ranadive told The Bee in 2015 he hoped to have “chosen a path” for the site by the end of that year. That path appears to have been problematic. But, in an emailed statement this week, Ranadive hinted a development breakthrough may be near. “We continue to work on developing a flexible master entitlement plan that can respond to the evolving needs of Natomas, and that also supports the region. We expect to have a substantive update to share very soon.”
Councilwoman Angelique Ashby represents North Natomas and has longed pushed the Kings to land a major tenant at the site that would create jobs in her district.
“I look forward to working with the Kings and continuing the conversation about bringing a destination facility to Natomas,” she said.
The Kings, along with CFY Development, are also involved in the redevelopment of a cluster of parcels at Eighth and K streets. Nearly two years ago, Kings officials unveiled a plan to replace a huge hole at that intersection with a mid-rise apartment building. The adjacent Bel-Vue apartment building is expected to be converted into apartments for downtown workers earning mid-level incomes.
CFY officials have revealed little about that site. In an email this week, they said the apartment plans are “going through the last cycle of plan review with the City. We are expecting to receive our building permit in December.”
Top city officials, including the mayor, have repeatedly said they are pleased with what the new Kings’ ownership has accomplished by building the arena, the hotel, and DoCo. But some city officials have privately expressed concern that turnover within the team’s business operation has caused the Kings to show less focus on development projects outside DoCo.
Several top Kings executives have departed in the past year. Former team President Chris Granger left in June 2017 and is now with the company that oversees the Detroit Red Wings of the National Hockey League and Detroit Tigers of Major League Baseball.
Juan Rodriguez, a former senior vice president and the general manager of Golden 1 Center, departed last year for a job with Major League Soccer’s Houston Dynamo. Randy Koss, a senior vice president of real estate development, left earlier this year.
That’s left COO Matina Kolokotronis and John Rinehart, team president of business operations, as the key top-level holdovers, both with roots back to the former ownership, the Maloof family.
“I think we have the best team,” Ranadive said. “We probably have the longest-tenured business team in basketball.”
A ‘diabolical scheme’
Another top executive who left this year was Jeff David, the team’s former chief revenue officer. Weeks after he left for a job with the Miami Heat, federal authorities announced he was under investigation for allegedly diverting $9 million in team sponsorship money from Golden 1 Credit Union and another $4.4 million from Kaiser Permanente toward the purchase of beachfront property in Southern California.
Ranadive discussed the incident publicly for the first time in the interview with The Bee.
“It was such an incredibly diabolical scheme that we wouldn’t have discovered it for another eight years,” Ranadive said. David allegedly set up a side account and forged signatures to embezzle the money, Ranadive said. David has not been charged, although the FBI is still investigating the case.
David’s attorney Mark Reichel would not comment on legal challenges his client may face but said both properties purchased in the alleged scheme are currently in escrow for amounts that should return all funds to the Kings and the companies involved.
“We believe it may be at least the amount that was alleged to be taken,” Reichel said. “We truly hope and believe so. Every penny is going to be returned.”
Reichel would not comment on the forgery allegations, but internal Kings documents obtained by The Sacramento Bee in August describe the team’s own investigation that found suspicious signatures on some documents.
Ranadive said he has hired former Assistant United States Attorney William Portanova to conduct an internal investigation of the Kings to determine whether the alleged theft was isolated. So far, the investigation has not revealed any further thefts or the involvement of anyone else, team officials said.
Portanova said the Kings have improved their internal programs that track team finances, but that David’s alleged thefts could not have been prevented by any system.
“In my opinion, when people are in positions of trust, betrayal is always a possibility,” Portanova said. “And that’s what this was, this was a sophisticated betrayal that occurred outside the (team’s internal security) system.”
David’s possible crime went unnoticed for months. It wasn’t until a human resources executive opened a file called “Turbo Tax” belonging to David that team officials discovered the alleged misdeeds. By that time, David had already left the Kings for a job with the Miami Heat.
Despite the attention the David affair received, Ranadive, Kolokotronis and Rinehart said the franchise did not hear from other sponsors that they were concerned about the team’s safeguards toward preventing a possible theft.
“The way the team reacted, the way they brought in the FBI, the U.S. Attorney, I have nothing but the highest regard for my team here,” said Ranadive. While conducting its investigation, the FBI used the 14th-floor condo owned by Ranadive in the hotel and condo tower as its makeshift headquarters.
Those condos have also been the subject of legal troubles. The Kings and their development partner, JMA Ventures, are locked in a court fight with their construction contractor over unpaid bills.
Swinerton Builders, the San Francisco-based general contractor hired in 2014 to build the 16-story tower, has sued the Kings partnership group, saying it owes them and subcontractors $25.7 million. It contends the Kings and JMA made “radical” changes at the last minute to turn an ordinary hotel tower into a sculptural showpiece but failed to come to grips with the costs of doing so.
The Kings and JMA group have filed their own $36 million lawsuit against Swinerton, saying the contractor mismanaged the project and its budget and failed to deliver the hotel on time. The Kings initially said the tower would be open in time for Golden 1 Center to host NCAA men’s basketball tournament games in March 2017, but the hotel wasn’t ready until several months later.
“We have some lawsuits, but we feel confident we’ll put that behind us,” Ranadive said. “(The tower) has turned out great. I have full confidence in my team.”
Another ‘rough season’
For many Kings fans – among the most loyal in all of professional sports – the ownership group’s success is measured in wins and losses.
The Kings are predicted to have another losing season this year. General Manager Vlade Divac told reporters in June the Kings are “a superteam, just young.” And the young squad received positive reviews for its performance in an opening night loss to the Utah Jazz, a playoff contender in the Western Conference.
That game was a sellout. Attendance has not been an issue in recent years: The Kings reported Golden 1 Center was at 100.3 percent of capacity on average for their 41 home games last season, the second-highest attendance percentage in the NBA. Some fans purchase standing-room-only tickets offered by the team.
Greg Wissinger, an editor at Sactown Royalty, a website that covers the Kings from a fan’s perspective, said the fan outlook for this season is “a mixed bag.”
“It’s definitely less optimistic than it’s been in recent years,” he said. “The Kings are widely considered to be in for a rough season, another year of the rebuild. But we don’t have a draft pick to look forward to (because it was traded away). That’s kind of a staple of being a Kings fan, looking forward to next year’s draft.”
Wissinger predicted attendance could decline this season if the Kings not only lose, but aren’t fun to watch.
“I think fan enthusiasm is waning a little bit,” he said. “They could be bad and still be fun and it’s not a lost cause by any means. But the fact that the Kings are still here and we have Golden 1 Center, that bought leeway and I think that’s run out a little.”