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Sacramento City Council has votes for arena if reachable criteria is met

Feb 14, 2012, 10:45 AM EDT

Inside Kings Arena

The Sacramento Kings and their fans will hold their breath on Tuesday night, as the Sacramento City Council holds the first of at least two critical votes that will determine whether or not the team leaves town.

Let me be the first to tell you that tonight’s vote will pass.  Sources close to the situation report that the council is all but certain to have the votes necessary to move the process forward.

Specifically, the vote will allow the council to finalize proposals with ten competing private parking operators that will provide upwards of $200 million toward the cost of the estimated $387 million Entertainment and Sports Complex.

This will setup a vote on February 28 that will decide the Kings’ future.  It is at this time that the council, in cooperation with mayor Kevin Johnson’s Think Big Sacramento coalition, will vote to approve a term sheet that will signal to the NBA that Sacramento can indeed fund an arena.

I’m also told by sources with knowledge of the situation that as long as a laundry list of criteria is met, the council will have at least the four votes necessary (not counting Johnson’s tie-breaking vote) to approve the term sheet.

This laundry list includes guarantees that the city’s general fund will be replenished by the approximate $9 million annual revenue stream currently provided by city-owned parking operations, a plan for some or all of the city’s employees to be transferred into the new parking company’s operation, a mechanism to cap rate hikes for parking in the future, an option for an agreement shorter than 50 years, and a mechanism to provide kickbacks to the city if parking revenues exceed certain benchmarks.

It is believed that within that framework, the city can meet or exceed their $200 million target.

The last major item on the laundry list is who will be responsible for cost overruns if the $387 million project goes over its budget.  I’m told the city will approach the developer, David Taylor, to potentially provide that guarantee.  While it is unclear whether or not Taylor would shoulder such responsibility, he will likely be given incentive to do so by an offer of development rights near the arena.

Taylor has been working on the arena deal for years and has evaluated the project for Sacramento at a significant cost to himself, and it would be surprising if he told the council that he would not be responsible for cost overruns on a project he evaluated and promoted – particularly if there is further incentive in the form of development rights.

Adding the estimated $200 million or more from parking, an estimated $30 million from local hotels, an estimated $50 million from an arena operator (AEG), and an estimated $80 million from the NBA and the Maloofs — sources tell me that the city is well in the ballpark of securing the financing necessary for the arena.

In other words, the city of Sacramento has both the will and the way to secure a ‘yes’ vote for an arena.

As far as the timing goes, while February 28 is potentially the date for a deciding vote, it is likely that the NBA will allow for an extension on the March 1 deadline so they can properly evaluate Sacramento’s findings.  That announcement could come during All Star weekend.  The NBA and the Maloofs could theoretically act on the city’s proposal quickly and provide their terms in time for a February 28 vote, but sources stress the important part is that the city will have communicated that it is ready to vote on a deal.

From there it is on David Stern and the Maloofs to pull the trigger on the estimated $80 million price tag, which amounts to about $3 million per year in rental payments for 30 years, all paid up front.

As for any talk of selling the team, The Maloofs have been consistent with their message that it’s not an option, and their sale of the Palms can be seen as either a sign that the ship is sinking or a sign that they were moving money for the purposes of an arena.  In the unlikely event they do want to sell, Think Big Sacramento executive director Jeremiah Johnson told Seattle’s King 5 News that the city has “a number of ownership groups willing to keep the Kings in Sacramento.”

It’s not going to come to that.

The Maloofs and/or the NBA could try leverage the city of Anaheim against Sacramento, who recently made improvements on their NBA-ready facility, but after Jerry Buss and Donald Sterling just agreed to revenue sharing with small market clubs it’s less likely that the NBA will place another team in their backyard.

As for Seattle, despite their clear efforts to bring an NBA team back home, they are well behind Sacramento in their pursuit of an arena.  They too would have to approve public funds for a new building, and Stern and the Maloofs will have to weigh the $80 million cost of a sure thing given a ‘yes’ vote, and a nebulous offering in Seattle that is 1-2 years away while Key Arena is a stop-gap solution at best.

With all of the support David Stern and the NBA has given Sacramento in its fight to keep the Kings – from manpower in the front office to people on the ground helping make the arena deal a reality – it just doesn’t make sense for them to pass up a viable option for two that have problems.

This is a complex situation and it is not a done deal, but the once half-court shot turned 3-pointer doesn’t even seem like a free throw at this point – it seems like a layup.  The Party of Five that voted down a public vote that would have sent the Kings packing are interested in a deal that addresses the aforementioned criteria.  That criteria reportedly can be met and still provide the project with the money that it needs to be green-lighted, assuming the private parties each put in amounts that seem reasonable, achievable, and already written in pencil.

Kings fans will probably wait until the shovels hit the dirt before they celebrate.  Let this prediction be the first bottle of Dom Perignon.

The Kings aren’t going anywhere.

  1. AlohaMrHand - Feb 14, 2012 at 1:55 PM

    Well good for Sactown.I still say even if they do wind up staying there despite a new arena they’ll be hard pressed to attract big free agents and keep the ones they have.And before you ask”have you even been to Sacramento?”Yes I have a few times and if you’re trying to compare Sacramento to an LA ,New York or even Miami you’re sadly mistaken.

  2. sergio408 - Feb 14, 2012 at 3:04 PM

    That Obviously didn’t stop Chris Webber & Mike Bibby from resigning in 2002,Winning cures all, besides this team has plenty of good young talent that it won’t need to sign any big free agents, Oklahoma City isn’t a hotbed for nightlife or big market but they have Durant,Westbrook,Harden all locked up for year to come!

  3. latrops - Feb 14, 2012 at 5:11 PM

    While I agree that the majority of young, single, wealthy men (most NBA stars) would prefer a city like Miami, LA, or New York to Sacramento, it is foolish to think that would be every player’s preference. Some guys get married and like to spend time with their families and aren’t much into clubs and bling. San Antonio was able to keep Tim Duncan. KG spent 12 years in Minnesota. It is tougher to win in a place like Sacramento, Oklahoma City, Charlotte, or Minneapolis than it is in New York and LA, but it is possible. The Kings were neck and neck with the Lakers a few years back, when Chris Webber was in his prime. They were maybe one lucky bounce, one shot (Robert Horry three) from beating the Lakers and likely winning an NBA title. They are able to bring in solid complementary pieces (Marcus Thornton), but need to land that one special super star that you build around. DeMarcus Cousins might be that, but we don’t yet know what he will become.

  4. dallascowboysfan101 - Feb 14, 2012 at 7:55 PM

    THE KINGS R HERE 2 STAY! This is our team & nobody’s gonna take it away from us! If Anaheim was 2 take away the kings, I’d call the Anacrime Kings! THIS IS OUR TEAM AND NOBODY’S TAKING THEM AWAY FROM US!

  5. AlohaMrHand - Feb 14, 2012 at 11:05 PM

    Well it passed 9-0.

  6. nwsportsexpert - Feb 16, 2012 at 3:02 AM

    You Kings fans need to back off, we in Seattle don’t care about your arena, nor do we care to take your team from you like OKC did us 4 years ago. But I’ll tell you this NBA is a business and the business model sucks!! Don’t let Stern pimp your city out for millions of dollars in money just for entertainment. Seattle has done just fine without the NBA, and honestly it puts a sour taste in my mouth to even think about how it felt to get our team snatched from us. We feel your pain, and glad that the NBA granted you the extra year to secure funding, in fact I hope you guys can keep your team. But seriously, no one in Seattle wants to take a team like Hayton Bennet the loser from OKC!! At least you have a Mayor like KJ who is workin hard to keep the NBA in California’s capital!! We never got that opportunity, and thats the NBA for you, nothing is fair. So, if by chance this deal falls through, and Seattle is picked as a destination, I will cheer for them, and will not turn them away just because they came from your city. Christopher Hansen just wants NBA back in Seattle so he is looking at all available options. We had our team for 40 years!! And poof!!, Gone!! So Mr. Hansen is out to build an arena, and lure a team here, not buy a team, promise to keep team in your city than, make threats to build an arena or lose your team. Not happening!! We are out to bring a team from a market that the NBA sees as a failing market and bring it to the largest market in NBA to not have an NBA franchise. If its the Kings, Hornets, Wizards, Bobcats, or whoever we welcome them here as the Second Seattle Supersonics franchise!! And for the record Aaron Bruski, Seattle is making an announcement this week on their new arena plans, and is as close if not closer than Sacramento on a new arena, so stop thinking we don’t have things rolling. Good luck to Kings fans and their city I hope you get to keep your team. Now, lay off Mr. Hansen and our new affiliates for reporting the news of your arena.

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