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January 07, 2011
New Kings arena plans even vaguer than last batch
So it looks like Sacramento's arena task force didn't like the city's four new Kings arena proposals any better than I did:
Of the four teams looking to develop a new Kings arena and entertainment complex in Sacramento, two don't have concrete finance plans while the other two must leap significant financial hurdles to bring their projects to fruition.
That's the rundown of a public hearing Thursday hosted by the task force reviewing the proposals — reconvened by Sacramento Mayor Kevin Johnson after a team led by developer Gerry Kamilos failed to deliver after being selected last year to exclusively work on a new arena deal.
Fireworks flew when panel member Mark Harris, a professor and infrastructure finance expert, grilled Kamilos. Harris had previously compared Kamilos' three-party land swap proposal — between Cal Expo, property in the Railyards and Natomas land that houses Arco Arena &mdash to a game of three-card monte. This time, he said that statement was an insult to those practicing the three-card monte scam.
Yowsah! The "hurdles" facing the two plans that actually have plans include the need for approval from Cal Expo in the case of the Kamilos plan (the same thing that deep-sixed his previous arena proposal last year), and the reliance on selling 10,000 seat licenses plus $70 million in PILOT bonds in another, despite the fact that, as the Sacramento Business Journal notes, "representatives from the Natomas team couldn't answer the panel's questions on how those bonds would work." At this rate, I could become the frontrunner tomorrow with my plan to fund an arena with elfin magic.
And this is all made even worse by the Maloofs being forced out of the Palms, as noted by Bloomberg News yesterday. That moves begs the question: Are the Maloofs already effectively bankrupt?
In 2010, it was revealed that former Sacramento employee Tom Friery quietly moved the Maloofs back into second position, behind the NBA, in order for the NBA to lend money to the Kings. So if the Maloofs can't make all their payments, Sacramento loses.
I'm sure they could foreclose, but to what end? To collect on the collateral? That's $25M + the arena.
Sorry, but this is just bad news. It could be as bad as it can get for Sacramento.
Posted by MikeM on January 7, 2011 03:46 PM
I think it's fairly obvious given the ownership's obvious financial problems and the situation with the arena where it's not likely a new arena will be forthcoming in Sacramento that the Kings days there are numbered. Particularly since unlike baseball teams there are several temporary and at least one permanent option that the NBA might consider for relocation. And contraction is not off the table either if it can be working into their new CBA given that the league already owns one struggling franchise.
Posted by Dan on January 7, 2011 11:39 PM