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Report: Maloofs pitching against Sacramento at NBA Board of Governors meeting

Apr 12, 2012, 3:46 PM EDT

team maloof with stern

Here we go all over again.

It was around this time last year that the Maloofs stormed angrily out of the NBA’s Board of Governor’s meetings, rejected and dejected after they were told they couldn’t go to Disneyland. Today, they returned to New York to pitch the idea that they were somehow wronged during the past month’s negotiations with the city of Sacramento over a new arena.

Specifically, they’re expected to ask their fellow NBA owners to support the nebulous concept that they’re unhappy with the deal.  They’re also expected to ask owners to support their decision to move to Anaheim if they don’t get what they want out of Sacramento.

The only problem is that the NBA, and specifically David Stern, ran point on a negotiation conducted during All Star weekend that brought the Maloofs, the NBA, AEG, and the city of Sacramento into an agreement in principle on a $391 million Entertainment and Sports Complex similar to L.A. Live.

Hanging in the balance is a fan base that is roundly cited as one of the best in sports.  Also hanging in the balance is a city beset by 12 percent unemployment — that is banking on leading economists’ predictions that a downtown arena can raise property values by hundreds of millions of dollars and kick-start a broken economy.

The Maloofs themselves called the non-binding deal fair when it was struck over All Star weekend, and since that weekend nothing about the deal has changed. The only thing that has changed has been the Maloofs’ public position regarding the deal, which has been duplicitous in its approach.

On one hand, the family has said that they remain committed to Sacramento, and on the other they have unleashed a full-court legal press designed to disrupt the arena funding process.

The family’s newly hired ‘crisis consultant’ Eric Rose started feeding the family’s narrative to the press a few weeks ago, saying they don’t believe the city can deliver on a new arena in time for the 2015-16 season, and that Anaheim was still an option on the table.

Of course, if the city of Sacramento has any holes in its plans to build an arena by 2015-16, we now know that they will be cited by the Maloofs in today’s meetings as a reason the league should allow them to move to Anaheim, where they could make more money whether they keep the team or not.

The Maloofs’ attorney, Scott Zolke, followed Rose’s statements by issuing a letter to Sacramento assistant city manager John Dangberg, providing specific legal notice to the city about issues the family had with anything and everything. In fact, if you wanted to derail an arena project you would want to start a checklist using the items on that list. From the timing of environmental reviews to the ability of arena opposition groups to delay the process or stop it in its tracks – items that could have been discussed behind closed doors were now floating around in an increasingly hostile public domain.

The city responded to this first initial red flag, explaining to the lawyer that he had compiled information for his complaint from six-month old estimates from the city manager’s office that had since been publicly updated.  The 88-page letter went on to address the numerous issues raised by the Maloofs, but made one key point: “It is critical that all parties are pulling in the same direction.”

If it wasn’t clear after Rose’s newspaper run, it became abundantly clear where the Maloofs stood following their April 2 response to the 88-page letter, when they admonished the city for not responding to its concerns over an arena opposition group.

“An important new issue (casts) a giant shadow over the feasibility of the project,” wrote Zolke about a group called STOP (Sacramento Taxpayers Opposed to Pork).  The letter went on to set legal markers designed to threaten liability upon the city:

“All of your assumptions and projections are based on a premise that the Kings will be playing in a new arena for the 2015-16 NBA season. However, the issues we have identified likely will prevent the City from meeting its timeline, and thus pose imminent obstacles to the new arena being ready for the 2015-16 season. Such a failure will result in irreparable harm to the Kings, not to mention the losses the City will suffer.”

This is where things get wacky and border on bad faith.

While one would think that in a near $400 million transaction that the Maloofs’ attorney would have vetted this STOP group, it appears that no such vetting has taken place.

The group did indeed file a petition with the city to try to get the 30,000 signatures needed by May 22 in order to bring the Kings arena issue to a public vote.  If the group were to somehow get the signatures, a vote would occur in November and the project’s delay would almost certainly give the Maloofs a green light to move out of town.

The problem? The petition the group filed to authorize its signature drive might have been written on a napkin and handed to the city clerk with ketchup stains on it. It was recently removed from consideration at the request of the group, and amended to include basic, proper punctuation and simple legal terminology required of such requests.

So the organization the Maloofs’ attorneys are citing as a “giant shadow” doesn’t have an attorney, and it submitted a legal document without putting periods and commas where they legally need to be.

I followed up with the group to determine for myself what kind of organization it was and how seriously it should be taken. They had a public meeting on April 7 at a local park in Sacramento. At this meeting was a group of 10 people, with leader Julian Camacho flipping some hamburgers. Their Facebook page is up to 43 ‘likes,’ and they’re still waiting on the Sacramento City Clerk to review their most recent ballot initiative language, assuming they spelled everything correctly.

Since the April 2 letter to the city the Maloofs have also made a massive public records request – 53 separate requests total. They have requested all communications between the city and the NBA, AEG, and politicians of all levels, and nothing says trust and partnership like a public records request.

So in summary, the project is on a tight deadline, needs all the public support it can muster, and the Maloofs are refusing to pay $3.26 million in pre-development costs, or one year of Travis Outlaw’s salary. They’re saying that the handshake agreement David Stern helped to cultivate didn’t go down how every other stakeholder said it did. They’re delaying the project by not paying those minimal costs, but saying that they’re also not sure the project can be done on time. They’ve rang the bell for an opposition group of 10 people that apparently can’t punctuate nor afford an attorney — that can’t start collecting the 30,000 signatures they need because they botched the original paperwork request. Meanwhile, the Maloofs’ attorneys are deposing the city like defendants and a crisis consultant has been brought on board to manage the media.

Elsewhere, 25 prominent Sacramento business leaders sent a letter to David Stern today asking that the Maloofs be removed as owners of the Kings. The Maloofs’ crisis consultant responded by criticizing the business leaders, pointing out that they didn’t want to get behind a deal like the failed arena project from a few cities over in Stockton.  Never mind the fact that the two deals are like pineapples and oranges — simply mentioning the two deals in the same breath is akin to doing an ad about how rich you are before asking the public for money.  You just don’t do it, and you certainly don’t go on the offensive against the same businesses that you’ll be partnering with for the next 30 years.

So at 2 p.m. ET representatives for the Maloof family, presumably led by brother George, started to make the case that Sacramento has screwed them yet again.  They’ll be pandering to owners that want to maintain their leverage in their future dealings with municipalities. But if the NBA wants to get another publicly subsidized arena without every city citing Sacramento as a cautionary tale, they’ll send the Maloofs out the side door once again, angry and dejected.

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