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Sacramento Mayor Kevin Johnson's checklist to keeping the Kings

12:25 AM, Apr 3, 2013   |    comments
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This all started - again - when reports surfaced about the Sacramento Kings majority owners, the Maloof Family, and Bob Hernriech, 5 percent Kings owner, finalizing a deal to sell the franchise to a Seattle ownership group.

The news meant Sacramento was in danger to losing the Kings. However, in response Mayor Kevin Johnson said in early January this is good news for Sacramento because it means the Maloofs, are willing to sell the team.

STORY: Maloofs finalizing deal to sell Kings according to Yahoo Sports

In the months following the announcement of a Seattle ownership group, Johnson, city leaders and Think BIG worked on a two-prong plan that would allow the Kings to stay in Sacramento - organizing a ownership group to buy the Kings from the Maloofs and putting together a plan to build an arena.

Here is Johnson's checklist:

Ownership group: CHECK

Bringing together a Sacramento group to make an offer that was comparable to the Seattle ownership group took time and a lot of negotiating. In the end, the group consists of four major equity investors and at least 25 people contributing $1 million toward buying the Kings.

The four whales are:

  • Vivek Ranadive, founder of software company Tibco and Golden State Warriors minority owner
  • The Jacobs Family, owners of Qualcomm
  • Mark Mastrov, founder of 24-hour Fitness
  • Ron Burkle, part owner of the Pittsburg Penguins and supermarket mogul

The amount of their offer is unclear; however, the Seattle ownership group, headed by Microsoft CEO Steve Ballmer and hedge fund manager Chris Hansen, offered to buy 65 percent of the team from the Maloofs for $525 million.

STORIES:

Entertainment and Sports Complex Plan: CHECK

The city of Sacramento, owners of Downtown Plaza JMA Ventures, Inc. and Burkle put together a plan to build and operate an arena in downtown Sacramento. The construction of the arena on the Downtown Plaza site will cost $448 million.

STORY: Mayor: Sacramento arena deal reached

The city is contributing 57.6 percent of the money needed to build the arena. The $258 million contribution from the city includes:

  • $212.5 million from public parking finance model
  • $5 million from MOPA (Sheraton Proceeds)
  • $1.5 million from parking infrastructure fund
  • $1 million from construction sales tax rebate
  • $38 million from Land Contribution

The investor group will contribute $189.7 million to the construction of the arena and up to $1 billion in total downtown revitalization. Their contribution will cover:

  • Predevelopment expenses
  • Providing completion guarantee
  • All cost overruns
  • Responsible for 5 percent surcharge
  • Responsible for all operating risks
  • Oversee arena capital repair overages
  • Share profits with city

Sacramento City Council Approval: CHECK

At Sacramento City Council meeting on Tuesday March 26, members voted to approve the non-binding ESC term sheet. The term sheet outlined the city's and the private investors' contribution to building and operating the arena. 

STORY: Sacramento City Council approves arena term sheet

The term sheet is dependent upon the Maloofs agreeing to sell the Kings to the Sacramento ownership group.

Once the sale is finalized, the city can move ahead with voting on the bond measure to lease out future revenues from the city's parking assets, and then move forward with building the arena.

Present plan to NBA: April 3

Johnson, Think BIG's Kunal Merchant, California Senate President Darrell Steinberg and members of the ownership group,  Ranadive, Burkle and Mastrov, all headed to New York City to pitch to the NBA Board of Governors relocation subcommittee why Sacramento deserves to keep the Kings.

The presentation is the city's last chance to make its plea to the NBA before a decision is made on whether or not the Maloofs can sell the team to the Seattle ownership group.

FACEBOOK: What would you say in a pitch to the NBA?

NBA Decision: April 18 - 19

At the annual NBA Board of Governors in New York City, the NBA will announce whether or not it will allow the Maloofs to sell the team to the Seattle ownership group. The NBA cannot force the Maloofs to sell to the Sacramento ownership group.

If the NBA allows the sale of the Kings to the Seattle ownership group to go through, the team will be in Seattle next season and Sleep Train Arena will be vacant.

If the NBA blocks the sale to Seattle ownership group, the Maloofs will have to decide on whether or not to sell the team to the Sacramento ownership group.

News10/KXTV

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