Mayor: Sacramento will not renegotiate arena deal

Posted Apr 12 2012 7:30PM - Updated Apr 13 2012 2:26AM

Sacramento Mayor Kevin Johnson is ready to meet with Kings owners at the NBA Board of Governors' gathering under one stipulation: the city will not renegotiate the proposed arena deal.

In a letter to the Maloof family released late Thursday night, Johnson put pressure on the team - and the league - to follow through with its commitment. He said Sacramento has "done our part" and now it's up to the team to do the same, setting the stage for a critical gathering after taking the city's hardest stance yet.
"Your handshake is your handshake. Your promise is your promise," Johnson said.
The two sides reached a tentative deal last month to fund the estimated $391 million arena, which would keep the team from relocating, as it almost did last year to Anaheim. The Sacramento City Council already passed its end of the deal, brokered by the league and tentatively agreed to by the Kings.
The team has to sign off so all parties can enter into binding contracts.
Kings owners Joe, Gavin and George Maloof have since taken issue with some of the terms - particularly environmental and pre-development costs. Under the agreement, the Kings and arena operator AEG each agreed to pay about $3.25 million in pre-development costs with the city paying the remaining $6.5 million.
George Maloof has since said that he does not believe the team should pay $3.25 million in pre-development costs because they're "playing the role of the tenant." All are expected to meet Friday with NBA Commissioner David Stern - who helped negotiate the original deal - and other league representatives in New York.
"We are 100% committed to moving forward under the framework laid out in the term sheet," Johnson said. "And there should be no expectation in (Friday's) conversation that this deal is subject to further negotiation. In light of these facts, the ball is in your court."
The strongly worded letter followed a day of tension from California's capital to the Big Apple.
In another letter signed by about two dozen of Sacramento's most powerful businesses leaders sent to Stern, the group asked the league to "strongly encourage" the Maloofs to sell. It also accused the Maloofs of not negotiating in good faith and questioned whether the owners have the finances - and motivation - to keep the team in Sacramento.
"We feel it is time for the Maloofs to sell their ownership of the franchise, for the good of the city and in the interest of advancing Sacramento's effort to build a downtown arena," a portion of the letter reads.
The timing of the letter was no accident.
The Maloofs were giving an update on the project to the NBA Board of Governors during its annual spring meeting in New York. It was exactly a year ago when Johnson and the city's business leaders convinced owners - along with presenting more than $10 million of new sponsorship and ticket sales for this season to the team - at the same Manhattan hotel to keep the Kings from moving to Anaheim, Calif.
Sacramento city officials were not in attendance Thursday. Johnson, who was taken an overnight flight to New York, had said the city had done its part and it's up to the Kings and the NBA to resolve the issue.
Family spokesman Eric Rose said the Maloofs were "saddened and disappointed" by the letter from the business leaders. He said the Maloofs are not selling the team and are committed to help fund million arena, which would open for the 2015-16 season in the downtown Sacramento rail yards.
"We share in the community's frustration on forging a workable agreement on what is ultimately a $400 million transaction that will impact the region for many years to come," Rose said in a statement. "However, we must all remember what is at stake in the development of a new arena in Sacramento, and must insure the agreement works for all parties involved, and most importantly, the residents of the City."
Sacramento's place on the NBA map seemed secured only a few weeks ago.
Under the non-binding term sheet, Sacramento will contribute $255.5 million, mostly by leasing out parking garages around the facility. The Kings agreed to pay $73.25 million and arena operator AEG will contribute $58.75 million. The remaining gap will be covered by a ticket surcharge, advertising around the facility, the sale of public lands and a sponsorship campaign to sell bricks and plaques around the complex.
The NBA agreed to pay about $200,000 to cover the initial pre-developmental costs and keep the project on schedule. Whether the rest will be covered - and who will cover it - was among the items expected to be discussed this week in New York during two days of meetings, which end Friday.
The league said it will refrain from comment until after the board meeting ends.
"Given all that the people of Sacramento have endured and achieved on your behalf," Johnson said, "we deserve nothing less than a partner who will work with the city in good faith and as a true partner."