By Ryan Lillis, Tony Bizjak and Dale Kasler
The Sacramento City Council will be asked to spend $150,000 on Tuesday to support the city's negotiations with an investment team interested in buying the Kings and partnering with the city on the financing of a new arena.
In a city staff report released this afternoon, Assistant City Manager John Dangberg told the council that $90,000 of that money would go to Barrett Sports Group, which served as an arena consultant to the city during last year's failed arena quest. Another $50,000 would be spent on "transaction counsel" and $10,000 placed into a contingency fund.
City officials are seeking the council's approval to enter in formal negotiations with a still unnamed investment team on the arena plan. While city officials have declined to name those investors, sources have for weeks said Southern California billionaire Ron Burkle and 24-Hour Fitness Mark Mastrov are in serious talks over partnering on a bid.
Talks with Burkle and Mastrov over an arena financing plan could start as early as Wednesday.
Notably, the staff report indicates that the city would need to start over on its arena planning - even with a plan that was blessed by the City Council less than a year ago. That deal - for a facility in the downtown railyard - fell apart when the Maloofs, owners of the Kings, backed out.
"It should be recognized that the 2012 structure, and all its detail, will likely change in this scenario," the staff report reads. "New owners of the team will likely expect different business arrangements and terms to account for potential differences in proposed approach. Potential differences could include: a) a project location other than the Railyards; b) less development risk exposure to the City for design, construction and cost control as a result of the new owners potentially taking the lead in development; and c) ancillary real estate development opportunities in addition to an arena or other elements that bring measurable economic benefits and returns to the City General Fund and the developer. These are just a few examples of the many possible differences, none of which can be quantified until we engage in formal discussions."
While much of last year's arena plan would likely need to be reworked, the city's key contribution to an arena would likely remain a proposal to leverage downtown parking operations.
The staff report said "the City has begun the reevaluation of its parking assets. A contract with Walker Parking Consultants has been executed and their due diligence work is underway. In addition, the City Treasurer is conferring with investment bankers in the City investment banking pool that have specific expertise in the area of parking asset monetization."