City Beat

News, insight and discussion on Sacramento and its neighborhoods

February 26, 2012
Sacramento arena update: Maloofs say they want to stay

ORLANDO, Fla. - So far, the headline from the ongoing arena talks might be that the Maloof family, who own the Kings, have expressed a desire to stay in Sacramento.

"They said they want to be in Sacramento," Mayor Kevin Johnson said, emerging for a quick break from the talks. "That was a question I just had to ask for our community because I don't want us to be just coming up with excuses of why this deal won't work if somebody doesn't want to be here. They said clearly they want to be in Sacramento.

Negotiations over a new downtown sports arena could go late into the night.

NBA Commissioner David Stern emerged from the talks around 4:45 p.m. Eastern Time and said he expected the talks to continue. Stern left the talks to attend the All-Star Game, which is scheduled to tip-off at 7 p.m. Eastern Time, but said he planned to return later.

"The bad news is the meeting is continuing and the good news is the meeting is continuing," Stern told reporters. "Where there's talk there's hope."

Asked if he was pleased with the progress of the talks, Stern said "I feel good that we're still talking."

"I agreed not to lock the door, but it was tempting," he said.

Joe, Gavin and George Maloof, whose family owns the Kings, briefly emerged from the meeting to buy soda and snacks.

"We're going to discuss some more issues," Joe Maloof said, being interviewed in a small gift shop inside the Waldorf Astoria in what became an intense scrum of media. "Things are positive."

As the negotiations continue, the focus remains the contribution being asked of the Kings owners.

In an attempt to help the Maloof family, the city has discussed refinancing a loan the Kings have with the city dating back to the team's prior ownership, according to a source briefed on the negotiations who was not permitted to speak because the talks are ongoing.

That loan is structured much like a "balloon mortgage," meaning the payments are scheduled to greatly increase, the source said. Refinancing the loan over a longer term would cut those future payments.

City officials said the Maloofs have never been late on a loan payment.

A source briefed on the negotiations told The Bee on Saturday that the city has requested an upfront payment of between $70 million and $90 million from the Maloofs for the arena project. Most of that would be in the form of upfront lease payments, but the total would also include the sale of land around Power Balance Pavilion.

A big part of today's talks will be on figuring out how the help the Maloofs come up with the $60 million in lease payments.

George Maloof told me his family saw the terms of the arena deal for the first time four days ago.

"We'll see what they have," he said. "It's a hard deal."

Also at the table is the mayor, City Manager John Shirey and high-ranking officials from both the NBA and the city.

Oklahoma City Thunder owner Clay Bennett, chair of the NBA's relocation committee, was involved in the talks. Emerging a few minutes before Stern were the owners of the Minnesota Timberwolves, Miami Heat and Utah Jazz.

"We want (the Kings) here, that will be my message," the mayor said.

Johnson cautioned that "if a deal does not happen today, we still have three or four days until March 1," an NBA-imposed deadline to have a financing term sheet for the arena.

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About City Beat

Ryan Lillis has covered the city of Sacramento, its 108 neighborhoods and its politicians since 2008. Prior to that, he covered crime at The Bee. A native of upstate New York, Lillis has a journalism degree from the University of California, Berkeley.

Contact reporter Ryan Lillis at rlillis@sacbee.com

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