Arena deal's off

Arena deal's off
The downtown project is dead, team owners say after council caps city
share at $175 million.

By Terri Hardy and Ed Fletcher -- Sacramento Bee Staff Writer
Published 10:55 pm PDT Thursday, August 5, 2004


Sacramento Kings officials walked away from plans for a new downtown
arena Thursday night after the City Council capped the city's
investment at $175 million.

As soon as the 8-1 vote was complete, John Thomas, the president of
Maloof Sports and Entertainment, walked out of the meeting and handed
out a statement indicating the arena plan is dead: "Unfortunately,
after four years of exhaustive work on this, it is now apparent that
neither the city nor our business can produce the revenues necessary
to make that dream come true."

The letter left open to interpretation whether arena talks are off
altogether or a downtown arena wasn't feasible.

Left unsaid was whether the Kings would stay in the city if a new
arena is not built. Kings owners Joe and Gavin Maloof have repeatedly
said they are not interested in relocating.

Some city leaders said despite those assurances, they believe the
Kings will leave.

"Without a new facility, the Kings can't stay in this community for
more than the next five or six years," said Tony Giannoni, a business
leader who led a task force looking into arena sites and funding.

"I think the chances are that they will go."

Mayor Heather Fargo, who for years has pushed a plan for a downtown
arena to spur development, said after the meeting she was disappointed
that the Maloofs aren't interested in pursuing negotiations.

"Will they leave? I haven't thought that far ahead," Fargo said. "It
does appear they made their decision prior to the meeting. I'm not
sure the council action led to this conclusion. But in no way does
this deter this mayor and this City Council from pursuing improvements
in downtown Sacramento."

City Councilman Dave Jones, the most vocal critic of public funding
for an arena, said the Maloofs' letter suggests they've stopped
negotiating, but said talk that the team might leave is "pure
speculation."

The council's vote also put in place an arena question on the March
2005 ballot, and set a timeline for the identification of a specific
arena site and a financing plan before a vote.

The council approved launching a renewed search for arena sites in
several parts of the city: downtown, Cal Expo and next to Arco Arena
in North Natomas.

City Manager Bob Thomas said earlier in the evening that he would hire
several consultants today to begin negotiations with the Kings. But
now, Fargo said she and Thomas instead will confer to discuss the next
steps.

Last month, the council signaled it would go forward with a ballot
measure and begin talks with Maloof Sports and Entertainment as soon
as possible. Then it shocked Kings officials when it agreed to enter
negotiations with a price cap of $350 million and a provision that
costs must be split 50-50.

This week, Thomas warned that beginning talks that way would be a
"mistake" and would not ensure a successful outcome.

When he stepped before the council Thursday, Thomas urged the group to
drop those specific numbers, saying he wanted to start with a clean
slate. He also expressed concerns that relations between the city and
his organization recently had deteriorated.

"Let's go back (to) working together and see if we have the combined
resources to do this," Thomas said.

Fargo urged that specifics be scrapped altogether and that decisions
be allowed to evolve during arena talks.

However, some members of the council were insistent that guidelines be
in place before talks begin.

"It's time that the city thinks about what it can afford and puts that
down," said City Councilman Steve Cohn, who authored the cost-specific
motion. Cohn said City Manager Thomas had recommended the strategy and
supplied the numbers.

After the vote, Cohn said he was happy with the compromise that would
cap an arena project at $350 million unless other private funds were
supplied to cover additional costs. Then he received a copy of the
Maloofs' statement.

"I'm not sure what to make of it,"Cohn said. "It appears they believe
that with a $350 million cap and $175 million in city participation,
they don't think it's possible to do a downtown arena."

Cohn added that while he doesn't think the Maloofs have immediate
plans to leave Sacramento, that could change.

"If we don't end up coming together for an arena at some point, they
will leave," Cohn said.

For Giannoni, whose task force of four business leaders has worked
relentlessly over the last months to bring an arena deal to life,
Thursday's vote was as disappointing as it was perplexing."

Said Giannoni: "It's just one of those things that just went
sideways."

---
Regards,
Paul Kekai Manansala

How quickly the whole thing falls apart. Kings will be in a different city
within 2 years.


"Paul Kekai Manansala" <a.manansala.TakeThisOut@attbi.com> wrote in message
news:a704ff38.0408060851.4bf5e576@posting.google.com...
> Arena deal's off
> The downtown project is dead, team owners say after council caps city
> share at $175 million.
>
> By Terri Hardy and Ed Fletcher -- Sacramento Bee Staff Writer
> Published 10:55 pm PDT Thursday, August 5, 2004
>
>
> Sacramento Kings officials walked away from plans for a new downtown
> arena Thursday night after the City Council capped the city's
> investment at $175 million.
>
> As soon as the 8-1 vote was complete, John Thomas, the president of
> Maloof Sports and Entertainment, walked out of the meeting and handed
> out a statement indicating the arena plan is dead: "Unfortunately,
> after four years of exhaustive work on this, it is now apparent that
> neither the city nor our business can produce the revenues necessary
> to make that dream come true."
>
> The letter left open to interpretation whether arena talks are off
> altogether or a downtown arena wasn't feasible.
>
> Left unsaid was whether the Kings would stay in the city if a new
> arena is not built. Kings owners Joe and Gavin Maloof have repeatedly
> said they are not interested in relocating.
>
> Some city leaders said despite those assurances, they believe the
> Kings will leave.
>
> "Without a new facility, the Kings can't stay in this community for
> more than the next five or six years," said Tony Giannoni, a business
> leader who led a task force looking into arena sites and funding.
>
> "I think the chances are that they will go."
>
> Mayor Heather Fargo, who for years has pushed a plan for a downtown
> arena to spur development, said after the meeting she was disappointed
> that the Maloofs aren't interested in pursuing negotiations.
>
> "Will they leave? I haven't thought that far ahead," Fargo said. "It
> does appear they made their decision prior to the meeting. I'm not
> sure the council action led to this conclusion. But in no way does
> this deter this mayor and this City Council from pursuing improvements
> in downtown Sacramento."
>
> City Councilman Dave Jones, the most vocal critic of public funding
> for an arena, said the Maloofs' letter suggests they've stopped
> negotiating, but said talk that the team might leave is "pure
> speculation."
>
> The council's vote also put in place an arena question on the March
> 2005 ballot, and set a timeline for the identification of a specific
> arena site and a financing plan before a vote.
>
> The council approved launching a renewed search for arena sites in
> several parts of the city: downtown, Cal Expo and next to Arco Arena
> in North Natomas.
>
> City Manager Bob Thomas said earlier in the evening that he would hire
> several consultants today to begin negotiations with the Kings. But
> now, Fargo said she and Thomas instead will confer to discuss the next
> steps.
>
> Last month, the council signaled it would go forward with a ballot
> measure and begin talks with Maloof Sports and Entertainment as soon
> as possible. Then it shocked Kings officials when it agreed to enter
> negotiations with a price cap of $350 million and a provision that
> costs must be split 50-50.
>
> This week, Thomas warned that beginning talks that way would be a
> "mistake" and would not ensure a successful outcome.
>
> When he stepped before the council Thursday, Thomas urged the group to
> drop those specific numbers, saying he wanted to start with a clean
> slate. He also expressed concerns that relations between the city and
> his organization recently had deteriorated.
>
> "Let's go back (to) working together and see if we have the combined
> resources to do this," Thomas said.
>
> Fargo urged that specifics be scrapped altogether and that decisions
> be allowed to evolve during arena talks.
>
> However, some members of the council were insistent that guidelines be
> in place before talks begin.
>
> "It's time that the city thinks about what it can afford and puts that
> down," said City Councilman Steve Cohn, who authored the cost-specific
> motion. Cohn said City Manager Thomas had recommended the strategy and
> supplied the numbers.
>
> After the vote, Cohn said he was happy with the compromise that would
> cap an arena project at $350 million unless other private funds were
> supplied to cover additional costs. Then he received a copy of the
> Maloofs' statement.
>
> "I'm not sure what to make of it,"Cohn said. "It appears they believe
> that with a $350 million cap and $175 million in city participation,
> they don't think it's possible to do a downtown arena."
>
> Cohn added that while he doesn't think the Maloofs have immediate
> plans to leave Sacramento, that could change.
>
> "If we don't end up coming together for an arena at some point, they
> will leave," Cohn said.
>
> For Giannoni, whose task force of four business leaders has worked
> relentlessly over the last months to bring an arena deal to life,
> Thursday's vote was as disappointing as it was perplexing."
>
> Said Giannoni: "It's just one of those things that just went
> sideways."
>
> ---
> Regards,
> Paul Kekai Manansala