If you’ve been wondering how the city of Sacramento was going to come up with a viable arena plan for the Kings before the NBA meetings in mid-April, you can stop wondering that now, and instead wonder how it’ll come up with a viable arena plan by March 26. That’s when city manager John Shirey says he hopes to have a term sheet for the city council to vote on, because his original planned date, April 2, “might be cutting it a little close for meetings with the NBA.” It’s still not clear how much time the council will have to read the thing and discuss it or vote — let alone whether it’ll actually have a concrete funding plan or just the kind of hand-waviness they voted on last year — at least we have a date now when we’ll know what we still don’t know.
Up in Seattle, meanwhile — if it okay with you, I’m going to treat Sacramento and Seattle events as all part of the same story for the moment — the longshore workers union has decided that it is going to appeal the ruling against its arena lawsuit after all, and this time it will challenge the economic impact study for the project, not just the environmental impact study. I still don’t see this as a likely major stumbling block — even if they find a judge willing to overturn the first judge’s ruling just on the grounds that said first judge “was wearing blinders” (actual public argument from the union’s lawyer), the remedy with these things is usually just to order a new impact study, not to throw out the whole project, so it’s more likely to cause a delay and/or require tweaks to the plan than to stop it. I guess there’s some slim possibility that fear of the mighty International Longshore and Warehouse Union Local 19 legal department will spook the NBA and cause them to reject the Kings sale, but I wouldn’t hold my breath.
I’m thinking last year’s hand-waviness will be what the City Council get’s to vote on. The NBA BOG will submit to the power of KJ and the fact that the NBA is the only game in town and we have no entertainment options but the NBA and we have parking “assets.” And our biggest superfan, does an online podcast out of his garage. #Let’sDoThis #HereWeStay #PlayingToWin
They can’t really vote on last year’s hand-waviness because of the change in location. This introduces a whole host of new variables, such as what you do with the current tenants (ironically, 24 Hour Fitness is one of them), what impact this has on the parking asset (it reduces the number of spots), who pays for demolition, the EIR…
Not to mention the news reports that now say the relocation fee will be $75M, and Hansen-Ballmer-Nordstrom are willing to pay it.
And let’s just throw in the lead Seattle has.
April 2 was a huge problem. They haven’t even started negotiating the term sheets; the reports I’ve read say they’ll start them next week. This is because they don’t have an estimate for the parking any more, and we cannot negotiate term sheets if we don’t know what our contribution can be.
Could this be going any worse, Neil?
What the Council will get on March 26th will be last year’s hand-waviness except with a different location and a lower city contribution. But it’ll be like last year’s hand-waviness in the sense that it would be a “term sheet” with “some details to be worked out later” but the powers that be will be touting it as we have billionaire owners, a strong market, and we could come up with the city contribution from parking, land sales, and change found from KJ’s couch. Same BS, slightly different flavor.
That sounds like a pretty good guess.
MikeM, it would be going worse if Jeffrey Loria had been named as one of the whales. Or if the North Carolina legislature had switched bodies with the Sacramento city council.
Jason, we’d have to compare that with what Seattle is offering. Their arena deal is far more well-formed at this point. If we hand them a “concrete” offer that’s full of hyperbole, they’ll see right through that.
I note, too, that these impressively-optimistic reports are coming from Think Big, which is an entity that was funded almost entirely by the Maloofs. Nice little irony for you right there.
News is that the dollar amount of Mastrov’s offer might be leaked later today or tomorrow. I’m not sure how real this will be.
“we cannot negotiate term sheets if we don’t know what our contribution can be.”
Hey, why not? I bet the NBA would love that. It’s kind of like signing your name on a blank check.
Royals are staying, Arena will be done this summer. You will bow down to me and you will be down to Sacramento’s basketball team. This successful and championship team is more important than humans. It is more important you pay the Kings then put food on your table. P
The NBA could have fatigue with giving Sacramento extra time the past few go-rounds on deadlines, but as this is being put together in response to Hansen’s purchase of the “not for sale” team a little bit of hand wavy might be fine. If they want to give a few more weeks to let all the Sac details get hammered out the NBA can certainly do that again.
It was also reported last night from the Sacramento Council meeting that they had a report made in 2004 on the Mall site. It reportedly was too expensive and too complicated to be a viable site. Unfortunately, the report is “lost” somewhere.
Yeah, I suspect the April deadline isn’t as solid as one might expect.
How is Sacramento going to get more time? We’ve had back and forth on this downtown project for the last decade or so. Many of us in Sacramento would like to this issue go away once and for all. It’s not like we have problems with crime or getting hit hard by the real estate market collapse.
Is there any reason why they’re resorting to this parking lease-out plan (where it doesn’t sound like they really know how much money they could get for it, or how that general fund money would be replaced) rather than raising taxes? It seems like that route could actually be less iffy/risky than this one, though obviously not ideal.
The answer, Jared, is pretty simple: Been there, done that.
When the voters were asked to raise sales taxes 1/4% for “quality of life” issues, they rejected it 4-1. That was Q&R.
KJ knows it wouldn’t fly with the voters, so, fine, he’s willing to find ways to do this where he won’t be required to ask for a voter okay.
I think they should just sell bonds to be backed by future parking revenue — or, at least propose that. If the Council did that, you then open the possibility of a petition to block it.
With a downtown arena, it’s clear that would increase demand for parking on event nights. I just don’t think it would increase demand enough to raise enough revenue to pay off bond debt and continue to provide a $9M/year revenue stream, that’s all.
I wonder if they’ll try to keep the old term of “luxury suites at Kings games will not be subject to ticket/admissions tax” . Always a hoot that the places renovated for more/nicer luxury suites usually exempt those luxury suites from paying admissions taxes… in most pro sports. Is that not something businesses can deduct (like they can for the “entertaining clients” part of a luxury suite price) ?
ChefJoe, there are no State taxes on sports and entertainment events inside California. There are obviously local surcharges that are designated to pay off bonds, but there is no State sales tax on any of the seats in Sleep Train.
That’s right MikeM, usually sales taxes only apply to tangible goods. Seattle has a similar deal with an Admissions Tax being imposed by the City (or sometimes the County) on events with an admission charge. Much of our past stadium funds (and most of Hansen’s proposed bond payments) are derived from Admissions Taxes, but it always strikes me as odd how many team/stadium owners negotiate that the luxury boxes not pay admissions taxes.
20 days is for wimps. Sacramento is going to have an arena plan in 15 days. http://www.news10.net/news/article/234057/2/Sacramentos-new-arena-plan-should-be-unveiled-March-21
Jason beat me to it.
So, they unveil the plan on March 21, then vote on it on March 26.
Wow, that gives the public plenty of time to examine the details. What could possibly go wrong?
I know exactly how KJ will rationalize this extremely-short timeline, though:
“This is just like the plan we approved last year, with a couple minor differences. We only need to talk about those minor differences, and we’re good!”.
Those won’t be his exact words, but it’ll be about right.
He may even go for the “We’ll just forgive the current bond debt!”-home run.
King county actually permits the admissions tax to be as high as 10% at the seahawks and mariners stadia. They currently collect less due to the dedicated taxes but Hansen could have let king county collect and then pay his direct business taxes.
I think I read that ticket taxes and surcharges could be part of the deal. It’s only fair to let Carmichael Dave and the other white shirts who go to city council meetings to pay for the damn thing since they will use it more. If they went that route, I would support this more but a deal like that could be easier to unravel for the antitax folks- a very strong movement in an otherwise fairly liberal state.
If you had the arena in use 150 days a year, and sold an average of 15,000 tickets an event, that’s 2.25 million tickets a year. To pay off an arena debt of $400 million, you’d need about $25 million a year. So that would work perfectly so long as you had an $11 per ticket surcharge, on everything from Kings games to concerts to high-school basketball tournaments. Hands up everybody who thinks that’s going to happen.
I cannot see how Sacramento keeps the Kings past this NBA season. If the owners of the other 29 teams reject the sale and relocation to Seattle by Hansen, Ballmer and Nordstrom, it will be a miracle for those in Sacramento. Then they will find new proposals to build a new arena and if those plans fall apart, we will be discussing a potential move of the Kings to Seattle or another location once again before this year is finished and the speculation will intensify going into 2014.
Oh, math-schmath. Think Big said $7B over 30 years, and that’s $233M/year.
That’s PLENTY of money to repay the bonds!
Furthermore, it’s excellent motivation to forgive the current bond debt. With revenues like that, we’d be very foolish to not do this.
What? You think I’m being sarcastic? I’m not! Really!
What kind of makes me sick is videos like this, where KJ is leading a school rally, exhorting the kids to cheer.
http://www.news10.net/video/default.aspx?bctid=2210304744001&odyssey=mod%7Cnewswell%7Ctext%7CFRONTPAGE%7Cfeatured
$11 per person might not be impossible if it were parsed out (and expensive suites shared in the admissions tax)
$3 per vehicle plus $1 per head parking surcharge, $1 surcharge on any sugary beverage in a container larger than 16 oz/$2 surcharge on any beverage containing alcohol…..
plus they can always structure it so that the payments escalate and don’t really hit max until 5 years down the road… once Hansen isn’t in the picture.
You could probably get away with some taxes and fees at a Sacramento Kings game but not as much with Ice Capades. Also, those taxes would eat into the Burklestrov profits. #HereWeDrink$20Beer
Just read Sterns comments. Im honestly wondering what the bid was considering they knew they had to match/surpass the Hansen bid. If they actually bid “significantly” lower as Stern claimed than they must be smoking something strong if they think they could get the Kings.
This is what Ryan’s talking about:
www.sacbee.com/2013/03/08/5248370/stern-sacramento-groups-bid-to.html
Seriously, Hansen overbid. So if you try to underbid when another guy is overbidding, what result should you expect?
Done deal, Ryan. Sorry, Grunt.
Yeah, barring their initial bid somehow being less than the amount of money they’ve got because they wanted to be cheap (“Hey, they want the team to stay, so if we at least come within a country mile, they gotta accept! We won’t have to spend anywhere near as much as we think we do!”), and their next bid being the bid they should have originally made, they are screwed.
It seems that first bid was a lowball, negotiating price, see what happens bid; now Hansen’s original bid will be matched. Then, I guess it is up to Ballmer if he wishes to have Hansen increase his bid.
jhande, that’s about the most positive spin I can imagine being placed on this.
Let me spell it out for you: Hansen is willing to bid *whatever it takes!!* to get an NBA team (he’s already into this to the tune of about $90M), and Mastrov is a “bargain hunter” — if he gets the team, fine, but he’s hoping and praying for BOG mercy. Stern indicated last night that there will be no BOG mercy.
I don’t believe Mastrov can increase his bid. I think he already had the throttle floored. And Burkle, since he wants AEG, can’t really involve himself in a Kings purchase until he’s rejected — they own the Lakers.
Mike M, Unless, you are Hansen, you can not “spell out” what Hansen will do. You are not Mastrov, so you have no idea what Mastrov will do, or what Mastrov is “hoping and praying for”. You have no idea what Burkle will do. Stern “indicates” a lot of things, like the Seattle arena proposal is really not that far along. Stern spends a lot of time making ambiguous statements that offend no one, and are interpretable as good for all sides. Stern is decent at the non-committal statement.
As for Burkle; Where is the rule that Burkle cannot own a percentage of AEG, which owns a percentage of the Lakers? So, if Hansen’s fund is invested in any business interest which owns a portion of an NBA team, Hansen cannot own interest in an NBA team?
Let me spell it out for you, Mike M, you know no more about this, than anyone else. Your conjecture is merely your conjecture. You have no access to the inner workings of the minds of any of the individuals involved in this Kings issue. You have no idea what the BOG will do, and you do not have any great insight into what will happen in the end.
@jhande
What MikeM is saying is that Burkle can’t own a percentage of 2 different NBA teams at once. That would be a conflict of interest. Since AEG owns 27% of the Lakers, he wouldn’t be able to buy a % of the Kings without selling a % of the Lakers first.
You are right in that we don’t know what is going on with these guys. We don’t know their priorities and what not. But there are tons of angles to maneuver around and it has to be done quickly.
Right, NBA rules prevent owners from having shares in two teams at once. Though that only becomes an issue if Burkle buys into AEG, and AEG holds on to the Lakers.
Well, would that include any of the investments Hansen’s funds make? Or if any of the interests that invest with Hansen own a percentage of an NBA team? Say that x corporation is invested in a business that owns a percentage of some team; and Hansen invests in x corporation; wouldn’t the same rule apply to Hansen? The same for Ballmer, or the Nordstroms, are their investments being investigated by the NBA to see if any of their invested in interests own a percentage of a team?
Hansen is widely invested. It would seem that among the different funds would be interests that own, directly or indirectly, percentages of an NBA team. The same goes for Ballmer and the Nordstroms.
Odd, first it was Ellison was going to try to get AEG, then Burkle… and both these characters have been wanting to get an NBA team at some point in the past. Considering AEG is only a minor owner of the Lakers too, how strong is that prohibition ? Potential majority owners of a new team can’t even own shares in another company that has a minor interest in another ? What if I (or a retirement plan) owned Comcast shares which owns Comcast-Spectacor, which once owned the 76ers ? How about Cablevision or Time Warner (which have owned NBA teams) ? Something tells me the degree of separation required isn’t absolute and is instead something that the BoG weighs/judges individually.
AEG has a 27% share of the Lakers; that’s not a minor amount.
Contrast that with how much Comcast stock does Burkle/Mastrov/Ballmer (yes, I include all three here) even have? Probably quite a bit, but nowhere near enough to influence decisions on the 76ers. I feel very certain that the NBA has thresholds here, and it’s probably way less than a 27% ownership stake. Heck, it’s probably less than a 1% ownership stake.
If Burkle is part of the winning bid for AEG, that probably gives him 5-10% of the Lakers. The NBA will deem that is way too much, and force him to sell one thing or another.
Could all be moot anyway, if Anschutz changes his mind on the sale or if someone else wins. I kinda think that might be the winning bid now — “no sale.”
That would free up Burkle to bid on the Kings. Kings fans should be rooting for that.
Well yeah, jhande, no one has any “great insight” or inside information, but at least they are using rationale and logic to make their points. Whatever makes you feel good, but anyone with even a goat’s brain would have to bet that April 18 is going to be the last call for the Kings. Adios.
Mike M, Where is my logic, or rationale, based upon incomplete information (just as your’s is) incorrect? The difference between us, Mike M, is that I realize that I do not have all of the information, and that I realize that I do not know what will happen as regards the Kings issue.
Okay, this is edging very close to personal attacks. Everybody take a deep breath and find a way to debate this issue without casting aspersions on the individuals making the arguments. Otherwise, next person who even comes close to that line gets a week in the penalty box.