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April 7, 2011
NBA says Kings will 'act appropriately' regarding debt to city

By Tony Bizjak

The National Basketball Association has sent a letter to the city of Sacramento saying it expects the Sacramento Kings to make good on the team's $77 million loan from the city, if the team decides to relocate to a new city.

The two-sentence letter from the NBA's lead attorney was delivered this week in response to a demand by city officials that the Kings be required to pay the local debt in full before the team leaves town.

The Kings are believed to be in the final stages of negotiating a deal with the city of Anaheim to play next year in the Honda Center there.

In a letter dated April 4 to Assistant City Manager John Dangberg, NBA attorney Richard Buchanan writes: "As of this time, the NBA has not received an application from the Kings to relocate. If the Kings submit an application to relocate, we expect that the team will act appropriately with respect to any remaining financial obligations it may have to the City of Sacramento."

Dangberg declined comment Thursday morning. Sacramento Kings officials previously sent the city a letter saying they will address the loan "at the appropriate time."

Should the Kings leave, city officials say they want the team to pay the remaining balance of the loan in full. It is unclear, however, under terms of the contract, whether the Kings might instead pay off the loan partially in cash, and partially by leaving Power Balance Pavilion, formerly Arco Arena, in city ownership.

The value of the arena is likely to be disputed. In that scenario, city officials could be faced with deciding whether to try to sell the facility, or to repair it and hire a company to company to run it as an enterprise operation for the city.

The Kings have until April 18 to file a request for relocation with the NBA. Kings team owners will meet next week in New York with the league's board of governors to brief them on the status of the Anaheim arrangement. Sacramento Mayor Kevin Johnson is scheduled also to go to New York to plead his case with league officials to keep the Kings in Sacramento.

Call The Bee's Tony Bizjak, (916) 321-1059.

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