Project Arena, Part II: How much will the Kings and NBA pay?
This is a three-part series on the entertainment and sports complex effort in Sacramento. Disclaimer: These are my observations on how the arena project is progressing based on recent and past events, as well as my discussions with various figures in Sacramento business, sports and politics.
If the city successfully leases its parking assets, hotels chip in on funding and an arena operator agrees to terms, the NBA may be ready to cover the balance.
According to two executive level employees within the Kings organization, who are not allowed to publicly discuss the arena project, there is strong belief that the league will come up with the rest if the numbers are close. NBA spokesman Tim Frank would not comment on the terms.
That’s partly why we have not seen an exact financial figure of what the league and franchise might pay in construction costs. The other reason? The parking sale is not finalized.
Leasing parking hopes to net the city more than $200-million. But if it falls short, one of the parties will need to step up for Sacramento to help pay the entire $406-million bill.
Hotels will pay roughly $30-million at best. So, if we take the city’s $200-million, that leaves $170-million between the NBA and potential arena operator AEG.
While the NBA is not as rich as the NFL, just look west to see how a league will step in when it believes in a market. The National Football League is giving the San Francisco 49ers a $200-million dollar loan to help construct a new stadium in Santa Clara.
“I expect an official ground-breaking ceremony very soon,” said Jed York, CEO of the 49ers. “Get your hard hats ready; we are embarking on the path to the next generation of 49ers football.”
The loan is the final financial piece that allows the five-time Super Bowl Champs to begin construction of a $1-billion stadium along Great America Parkway.
Expect a similar gesture by the NBA if the league is serious about staying in Sacramento.
Which brings me to the next point…
Is Seattle a threat?
If the entire financing plan falls apart, a San Francisco hedge fund manager is ready to swoop in. However his plan is not take the Kings to the Bay Area, but rather to the Pacific Northwest.
44-year-old Seattle native Christopher Hansen has acquired property just south of Safeco Field to construct a home suitable for an NBA and NHL franchise. And while nothing has been stated publicly, the Seattle Times reports that city officials have been following the arena efforts in Sacramento in hopes that the Kings may become available for relocation.
Also under their watch is the Phoenix Coyotes, but NHL Commissioner Gary Bettman wants to keep them in Arizona. He added that Seattle does not have a building yet, alluding to the difficulty of moving a franchise to a location with no venue.
While land is being gobbled up by Hansen, some public money will be needed – something residents in Seattle wanted no part of when the SuperSonics prepared to leave for Oklahoma City. Not to mention there is a 2006 voter approved measure that mandates any publicly-financed arena be profitable.
Seattle is waiting, but they are not quite ready. The Emerald City is likely a year-plus behind Sacramento in its own efforts.
Expect NBA Commissioner David Stern to make a few remarks about Sacramento’s arena progress during NBA All-Star weekend February 24th-26th. If granted, an extension to the relocation deadline would likely be announced then as well.
Last year during All-Star break in Los Angeles, Stern confirmed the Maloofs were indeed discussing a move to Anaheim. The statement was overshadowed by the pre-lockout chatter, but the weekend historically tends to end with Stern revealing major news regardless of how casually he says it.
Weekly contributor/columnist Rob McAllister is a reporter for KFBK Radio in Sacramento. You can follow him on Twitter.