Sacramento approves NBA arena deal

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Source : Yahoo Sports

SACRAMENTO, Calif. (AP) -- With the clock clicking down, the Sacramento City Council took its last shot at keeping the NBA Kings in California's capital by approving a public-private deal Tuesday to build a new 18,500-seat arena and retail center downtown.


Approval of the arena was the last step in what has been a full court press by Mayor Kevin Johnson to keep the city's only major league sports team from bolting to Seattle, where a new ownership group and arena deal awaits. He now must convince NBA owners to block the Maloof family from initiating the move, a deal made public in January.
Since then, the mayor, himself a former NBA All-Star, has scrambled to assemble a group to buy the team, convince Commissioner David Stern to consider a counter offer, and get approval for the financial deal that would build a $448 million arena on the site of a shopping mall - a development many say will revitalize a problem area in its bustling city core.
Next week, Johnson will present the arena plan and purchase offer to an NBA committee. The following week, the NBA Board of Governors will vote on whether the team can be sold, and whether it will stay or move.
''We want the folks of Seattle to get a team, we wish them well, but we want to keep what's ours,'' Johnson said after the 7-2 vote to approve the arena. ''We're going to New York to talk about the viability of this market and the love affair we've had with our team.''
The Sacramento investment group includes Silicon Valley software tycoon Vivek Ranadive, 24 Hour Fitness founder Mark Mastrov and billionaire Ron Burkle, co-owner of the NHL's Pittsburgh Penguins. Johnson announced late Monday that Paul Jacobs, CEO of the international technology company Qualcomm, also agreed to become part of the Sacramento bid.
''We have four billionaires who have said that Sacramento is worthy. It's been a long time since people have validated us in this way,'' said city councilmember Steve Hansen, who voted in favor of the deal.
The NBA has said the aging Sleep Train Arena in the suburbs four miles north of downtown no longer is adequate.
''We're in competition to keep the Sacramento Kings from being taken away from us,'' said City Manager John Shirley as he began outlining the arena plan for council members. ''We've known all along that we need to present the NBA a first-rate, quality place for them to play.''
The Seattle group, led by hedge-fund manager Chris Hansen and Microsoft Chief Executive Steve Ballmer, has had a deal to acquire a 65 percent stake in the team for $341 million.
The Chamber of Commerce, labor groups and fans lined up to speak in favor of the arena deal, stretching the meeting late into the night. They said keeping the Kings saves 800 jobs and creates 6,500 more during the construction and downtown revitalization process.
The plan was opposed by several groups and speakers, some of whom asked the council to take more time to study whether the deal is good for the city. City officials reached a preliminary arena agreement Saturday with the investment group, but the late negotiations left little time for community members to study the proposal before the vote.
''Mr. Mayor, your attempts to pull off an upset win could adversely affect this community for decades,'' said attorney and professed Kings fan Jeffrey Anderson, who asked the council to put the plan before voters or he would file a lawsuit to stop it.
Other speakers said the timing of the deal is ironic given that nearby Stockton is in bankruptcy court after over-extending itself with debt, including a minor-league hockey arena.
Development partners compared their vision of a downtown arena to other projects that have revitalized urban areas such as the Staples Center in Los Angeles and the new Barclays Center where the Nets began play in Brooklyn this season. Architect AECOM, tapped to build a new Kings arena, recently completed the Barclays venue.
''I have a lot of faith in this site. It's nothing short of world class,'' said AECOM's Bill Crockett.
The arena will be built on the west end of city center on the site of the Downtown Plaza, an aging mall that has lost more than half of its sales revenue in the last 10 years as stores have moved to the suburbs. It's just blocks from Interstate 5, a short walk from Amtrak and sits at a gateway to downtown and the city of 475,000.
The city's share is $258 million, the bulk of which would come from event parking collections and ticket surcharges. Nearly all of the city's parking lots are used by government workers who vacate downtown after 5 p.m. The city would own the arena.
The investment group will contribute $189 million to the arena construction and would be responsible for all capital improvements.
The 18,500-seat downtown arena also could host hockey, concerts and family entertainment. The development would include 475,000 in office space, 300,000 in retail space, 250 hotel rooms and 600 housing units.
The arena term sheet includes a 35-year non-relocation agreement with two five-year extensions that would keep the Kings in the city until the last quarter of the century.