Updated: 10:59 pm PT
[youtube id=”n_2yu3wnH9s” width=”600″ height=”350″]A deal has been reached to build a new arena that could keep the Sacramento Kings in the capital city. City Manager John Shirey and Assistant City Manager John Dangberg, Sacramento’s lead negotiators in the talks, discussed the deal with media late Saturday evening. Here are some highlights followed by audio of the press conference.
- By leasing its downtown parking assets to fund a portion of the project, the city will lose a major stream of revenue for its general fund. However, Shirey notes that lost income income will be replenished in this arena deal with no new taxes. “The amount of money that will be lost to our general fund because of our use of our parking assets will be replaced in full with some margin in case some revenues come up short,” Shirey said. “We will have more than enough to backfill the general fund.”
- The NBA has been involved in some fashion in the discussions for a new downtown arena. But unlike last year’s deal, they did not formally negotiate with the city in this year’s transaction. “We have provided to them this term sheet, this information,” Shirey said. “And we have been working with their local lawyers who have been asking us questions about all the details. So we will continue to work with the NBA, but it’s a much different role than they played one year ago.”
- Shirey on the major-investor group’s addition of Golden State Warriors Vice Chairman Vivek Ranadivé: “We think that the addition of Mr. Ranadivé to this package makes for a much stronger presentation to the NBA. He is a known quantity because of course he is a current owner of an NBA franchise. He is also known to Mr. (David) Stern and he’s known to other owners, owners who will have to vote on whether this franchise stays right here in Sacramento. Obviously he also strengthens the economics of this package because there’s more resources behind it. So it gives us greater assurance that they can deliver on every aspect of this deal.” Ranadivé has taken the lead in the team’s purchase. However, Shirey noted that Ron Burkle led negotiations on the arena on behalf of the investor group.
- How does Shirey feel the Downtown Plaza deal compares to last year’s deal at the railyards? He likes the plaza plan better, noting several features that are present in this agreement, but missing in the last one.
- Longer term of commitment from the prospective ownership group: 35 years with two additional five-year options, as opposed to 30 years in the railyards deal.
- Improvements to the city’s loan to the Kings that “will add to it being paid down before its refinanced”.
- Future improvements or capital costs will fall under the responsibility of the Ranadivé/Mastrov/Burkle group, not the city and its taxpayers.
- A million-dollar guarantee of profit sharing that “gets adjusted for inflation.”
- Shirey added: “And while we were very supportive of the arena being in the railyards, we think that this location at our plaza will solve another problem, which is what do we do about a declining plaza that has seen its best days and how do we reverse that? So we get more direct investment in the core of our city, which we think in time will also benefit the railyards and make that more attractive for additional investments in the future.”
The term sheet along with its accompanying staff report can be read here and here. Council will vote on the term sheet at Tuesday’s Mar. 26th meeting.
[powerpress]http://www.cowbellkingdom.com/sound/shirey_dangberg_term_sheet.mp3[/powerpress]Can’t see the audio player? Listen here.
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