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March 28, 2011
City directs Anaheim to stop talks with Kings; Maloof fires back

By Tony Bizjak

Sacramento city officials Monday fired off a terse letter to the city of Anaheim warning it to cease negotiations with the Sacramento Kings. The city went on to say it will seek state legislation to block Anaheim from issuing any inducements to lure the Kings -- unless Sacramento is first assured that the Kings will pay off the estimated $77 million they owe Sacramento.

In a phone conversation Monday night, Kings co-owner George Maloof told The Bee he was angry at the city's letter.

"It is interfering with our business," he said. "We're going to take every measure possible to protect ourselves. We have no intention of leaving that town without paying our debt. For someone to imply that we are not going to pay our debts, it's wrong, it's ridiculous."

The dramatic turn of events comes hours before the Anaheim City Council is scheduled to vote on issuing $75 million in bonds. The bonds would include $25 million to make upgrades to the Honda Center arena and $50 million for a loan to the Kings to cover moving costs.

The Sacramento letter, emailed Monday afternoon to Anaheim City Manager Thomas Wood, warns that Anaheim's actions could cause "irreparable harm" financially to the City of Sacramento. In the two-page letter, Sacramento Assistant City Manager John Dangberg asks the Anaheim City Council not to vote on the bonds Tuesday or take any other actions aimed at attracting the Kings.

Sacramento officials have hired a law firm to guide them on how to assure they are repaid $77 million they say the Kings are obligated to pay in full if the team should leave Sacramento.

Team owners have been in negotiations for months with officials at the Honda Center, owned by the city of Anaheim. On Friday, Anaheim published a tentative contract for a Kings' move to that city.

Anaheim officials had no immediate comment Monday. Dangberg's letter says if Anaheim insists on continuing negotiations with the Kings, Sacramento "must contractually require" the Kings to pay off the estimated $77 million the team owns the city of Sacramento.

Dangberg ends the letter to Anaheim City Manager Thomas Wood by saying Anaheim's environmental review of the impacts of the Honda Center improvment project is "woefully inadequate." An environmental impact challenge is a typical precursor to a lawsuit.

"You certainly understand the financial and budgetary implications for Sacramento were the Kings to relocate without satisfying their approximately $77 million obligation to pay off the city's bonds," Dangberg wrote.

Dangberg said Monday the city will immediately reach out to state Senate President Pro Tem Darrell Steinberg, D-Sacramento, seeking legislation to halt any move by Anaheim to entice the Kings to leave without first paying the city of Sacramento loan.

City officials say the terms of the local loan requires the Kings to pay the debt if they leave Power Balance Pavilion, but officials have been privately concerned the team may not pay. NBA officials on Monday said they have no comment. Kings officials also have declined comment on the potential move.

Read more:
Orange County Register: Maloof: Sacramento's plea to Anaheim 'below the belt'

Sacramento's letter to Anaheim: "Cease negotiating with the Kings"

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