The city of Sacramento Saturday unveiled a key piece of its efforts to keep the Kings from relocating to Seattle, announcing it has reached an agreement on a $447 million deal to build a new arena. The deal must still be approved by the Sacramento City Council on Tuesday, though initial reports indicate that is...
The city of Sacramento Saturday unveiled a key piece of its efforts to keep the Kings from relocating to Seattle, announcing it has reached an agreement on a $447 million deal to build a new arena.
“There is much work to be done, but this was a very important piece,” said Sacramento city manager John Shirey in an upbeat news conference announcing the deal Saturday night.
The deal struck with a private investment group that would also run the Kings must be approved by the Sacramento City Council on Tuesday, but initial reports indicate that is expected to happen.
Sacramento mayor Kevin Johnson announced the deal in a series of tweets Saturday afternoon.
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Johnson, a 12-year NBA veteran, has led the city’s efforts to keep the Kings since it was announced in January that the team had been sold by the current owners, the Maloof family, to a group from Seattle led by Chris Hansen. That sale, however, must be approved by the NBA Board of Governors when it meets in New York April 18-19.
Johnson has assembled an ownership group that is making a counteroffer on the team and will also lead the charge on the arena.
The city Saturday night released the 36-page term sheet with details of the financing plan. It includes $258 million in city funds, with $212.5 million of that coming from borrowing against downtown parking revenue and the other $45.5.million coming primarily from selling city land. The other $189.million will come from the ownership group led by Ron Burkle, a billionaire who also is a co-owner of the Pittsburg Penguins; Mark Mastrov, founder of 24 Hour Fitness; and Vivek Ranavide, a co-owner of the Golden State Warriors.
The presence of Ranavide, also a Silicon Valley entrepreneur, was revealed last week and Shirey said he will help bolster the city’s offer to buy the team because “he is a known quantity” who is “known to (NBA commissioner David Stern) and to other owners who will have to vote if this franchise stays right here.”
An initial offer was described by NBA commissioner David Stern as not comparable to that made by the Seattle group and that “unless it increases, it doesn’t get to the state of consideration.”
Hansen’s group reportedly paid $341 million to buy 65 percent of the team at a valuation of $525 million.
Johnson hinted that the Sacramento offer will increase substantially when he Tweeted that “the new ownership, historic in its reflection of our city’s diversity, will invest up to $1B (billion) in (Sacramento).” It is thought that the Seattle group may also have the ability to increase its offer.
The ownership group would agree to keep the team in Sacramento for 35 years. The Bee reported that the Sacramento arena deal, which initially had been scheduled to be revealed on Thursday, came together in a series of calls between the city and Burkle on Friday and Saturday.
Sacramento had also agreed to a deal last year with the Maloofs before the Maloofs walked away from it, eventually deciding to sell the franchise. Shirey said he “liked this deal a lot better.”
The city needed to get an arena deal completed before a critical April 3 meeting with NBA owners in New York. Representatives of the Sacramento and Seattle groups will state the case for their offers and arena deals at that meeting. The full board will then vote later in the month. The hope in Sacramento is its offer will be enough to compel the NBA to not approve the sale of the Kings to the Hansen group, forcing a sale to the Sacramento group.
Seattle and Hansen assembled a deal for a new $490 million arena in the Sodo district last fall. That price tag includes $200 million in public bonds that would be repaid with taxes and rents generated by the arena.
Construction would not begin until an NBA team is secured. If the Kings came to Seattle, they would play at KeyArena beginning next season for at least two years while the arena is constructed.
Hansen and the Seattle group have not commented on events out of Sacramento since the sale with the Maloofs was announced, sticking to an NBA media gag order, and had no comment Saturday.
Bob Condotta: 206-515-5699 or email@example.com.
On Twitter @bcondotta