Kansas City Kings at Sprint Center???

[KCLofts]

From today's Sacramento Bee:

This story is taken from Sports at sacbee.com.

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Lack of funds dooms arena plan

By Terri Hardy and Mary Lynne Vellinga -- Bee Staff Writers
Published 2:15 am PST Thursday, February 24, 2005

A plan to build a privately funded arena for the Sacramento Kings is dead and its collapse might force the basketball team to leave the city, according to members of a group brokering the deal.
After four months working to put together private financing for an arena, a consortium of landowners, lawyers and community leaders have concluded they could not raise enough money, representatives said Wednesday.

"The Kings may be history in Sacramento, I really feel that way," said former City Councilman Jimmie Yee, a spokesman for the group who had been pulled off the golf course to attend a hastily called news conference. "The arena is only good for another five years, and if we don't have an arena built by then, I'm not very optimistic about what will happen."

Joe Maloof, whose family owns a controlling interest in the Kings, said they have never threatened to move the team from Sacramento.

He said he and his brother Gavin appreciated the landowners' efforts and are disappointed the plan was unsuccessful.

"We're not discouraged, and we're not going to give up," Maloof said.

At the same time, he acknowledged that the Kings face a dilemma in the aging Arco Arena.

"The Kings, the people of Sacramento, the fans, the NBA and everybody involved in our organization need to make sure we're in a state-of-the-art facility approved by the NBA," Maloof said. "We can't have a substandard facility anymore and customers demand those facilities."

The collapse of the arena plan occurred hours before the Kings announced a surprise trade of star forward Chris Webber to the Philadelphia 76ers in a six-player deal.

Members of the North Natomas landowners group had hoped to present voters with a ballot measure that would expedite development of farmland encompassing 9,000 acres north of the city of Sacramento. In return, the landowners would divert a portion of development proceeds to build a new arena and create an endowment fund for the arts and youth sports.

In the end, the landowners said they controlled enough acreage to raise only about $230 million - $205 million for an arena and $25 million for the arts and youth sports. A recent report prepared for the city pegged an arena's cost at roughly $316 million.

A major blow to the arena came in late January, when a group of Natomas property owners led by former U.S. Rep. Doug Ose pulled out of the talks, taking nearly 2,000 acres with them.

"We couldn't in good faith say we're going to build an arena and then not raise the money," said Steve Thurtle, a member of the landowners group and senior vice president of Richland Planned Communities. "It wouldn't have saved the Kings, and no one would have trusted the developers again."

The plan is the third to collapse in the past two years. Earlier discussions centered on a publicly financed facility in Sacramento's Union Pacific railyard or elsewhere downtown, including the K Street Mall.

Thurtle and other backers of the Natomas landowner plan blamed Ose for its demise. "He made a deliberate effort to kill this thing, and he did it," Thurtle said, adding: "Unfortunately, he has no viable alternative financing plan for the Kings."

Ose called the proposal's collapse unfortunate, but said it merely reflected "fundamental flaws" in the plan, including its lack of any guarantee that an arena would be constructed. The former Republican congressman said he remains convinced that an arena can be built with private money in a business deal that makes sense to investors. He offered no specific proposal, however.

"I'd certainly be interested in looking at the true financial numbers of an arena, whether it's profitable or not, whether it makes sense to be involved, who benefits," Ose said. "I have never seen any financial statements showing the past few years of operations on Arco Arena. ... I think that's information the community is entitled to have when they're being asked to basically fund a free arena."

"I don't know if they (the Kings) make money or lose money," Ose added. "I know when I go out there and spend $5 on a King dog and $400 to take my family to a game, I kind of think they'd better be making money."

Thurtle said it's his understanding that Arco Arena, which opened in 1988, does make money.

But the revenue is used to offset expenses incurred by the team elsewhere, such as high player salaries, he said.

Under the deal that had been discussed with the landowners, the Kings would have continued to keep 100 percent of the revenues from arena operations, as well as the lion's share of the naming rights, group members said.

The team would have paid off its $83 million debt to the city of Sacramento and made lease payments in line with what other teams around the country pay, which Thurtle said currently run about $3 million a year.

Such an arrangement hardly makes sense for any arena owner seeking to make a profit, but it's the norm in the sports world today, Thurtle said.

"That's a 1 percent return. The only people that can afford to make 1 percent are governmental agencies, because it's a greater good, or guys like ourselves, real estate developers, who are making money some other way."

Joe Maloof declined to discuss any specifics about the plan, saying he does not negotiate in the press.

Those familiar with the negotiations, including Yee, said it became clear the Kings were concerned about whether they could count on a new Sacramento arena in the near future. Yee and the King's representatives had discussed starting construction in 2007.

Thurtle agreed that the failure to reach an agreement could mean the Kings will relocate.

"It's my understanding the Kings have other alternatives other than Sacramento to locate the franchise," Thurtle said.

The landowners had calculated their projected $230 million contribution to the arena plan based on 20 percent of what they estimated their profits would be once the 5,000 acres they controlled was approved for development. Portions of the acreage would have been set aside for streets, parks, habitat, other public needs and infrastructure.

Thurtle said some landowners who owned choice parcels that likely would be developed first, such as Richland and Angelo Tsakopoulos, had agreed to contribute 35 percent of their profits upfront, on the condition they be paid back later.

No one was willing to increase their contribution above that level, he said.

"There was a lot of pushback among the owners at 20 percent," Thurtle said. "It would have been tough to go any further."

The incentive for landowners was the prospect of receiving development approvals years faster than they normally would. In today's hot real estate market, land OK'd for development is selling for as much as $500,000 an acre.

Ose wondered aloud whether Wednesday's announcement was merely a negotiating ploy aimed at getting the Kings to offer more. But Thurtle said that wasn't the group's intention, and they didn't expect any counteroffers from the team.

"My sense is this is dead for a long while," he said.

But Sacramento City Councilman Steve Cohn said the arena idea shouldn't be laid to rest. He has asked City Manager Bob Thomas to research what it would mean if Natomas land owned by Sacramento and the Maloofs was added to the equation.

In earlier arena discussions, city officials found that selling or developing the 180 acres could raise $20 million to $60 million, Cohn said.

Once Thomas gets that information, Cohn said he'd like the council to discuss the merits of donating the land to the arena effort.

Cohn said he understands that including public funds could be a hard sell politically, or that the Maloofs might not feel there is time to sort out the proposal.

"I think it's a bit premature to call this thing dead," Cohn said. "I'm not willing to give up on it."

[KCTigerFan]

If it did happen it would be great. I can pull out all of my old KC and KC-Omaha Kings items from my youth and display them with the new Kings stuff.

[doogieslap]

It's amazing that an arena barely 16 years old is now old and antiquated. Wow. Talk about money blown, down the drain. Granted arenas built in the late '80's were never built with a lot of luxury amenities in mind like today's arenas, but still, that's got to be a hit on the cities that built them. Because I bet they're still paying those off......

Just think if KC had built an arena around 1990. No way in hell would another get built as an upgrade......

[hermit]

If this was a different team with a loyal fan-base, I might feel sorry for them.
The Kings, however, were "stolen" from us in the same fashion.
It is true that they were originally the Royals (I can't remember the city they came from), but California has its fair share of teams, already.

The closest NBA team to KC is probably the Dallas Mavericks, as St. Louis is also without a team.
I feel absolutely no connection to the Mavericks, whatsoever.

[Jhawkman02]

they used to be the Cincinnaiti Royals

[trailerkid]

Just think if KC had built an arena around 1990. No way in hell would another get built as an upgrade......

KC didn't need a new arena in 1990. However, it did in the late 90s.

[Highlander]

.

[KCMax]

Truth be told, Sacramento has never really supported the team any better than KC did.

Are you serious? They have the longest sell-out streak and are lauded for creating one of the best home court advantages in the league. Even when the team was losers their attendance was better than it was here. I don't think attendance here was terrible, and the team was stolen from us, but I don't blame the fans of Sacramento for that, I blame the owners. We'd do the same thing if we had the chance (and it appears we are trying to).

Do you think Kansas City stole the Chiefs from Dallas?

[Highlander]

.

[phxcat]

I believe professional sport teams forge a special relationship with the city, regardless of where they are, and should only be allowed to move if the owner is losing money. Too much public funds are spent to support professional sport teams to have them pull up stakes and move at the whimsy of the owners.

I agree with this- well, they shouldn't not be allowed to move, but it should be hard. They should be required to give some pretty compelling reasons before they can move, though. This is one part of life that people often try to throw free-market solutions at where they just aren't applicable.

The Chiefs were on the other side of the coin, however. They were an (almost minor league) AFL team competing with the NFL Cowboys. They needed to be looking for a better deal.

[Maitre D]

Just think if KC had built an arena around 1990. No way in hell would another get built as an upgrade......

KC didn't need a new arena in 1990. However, it did in the late 90s.

TK:

why did (do) we need an arena? No sports team is coming here. Will they have concerts every other nite? Seriously.

As for the person who says SAC didn't support them any more than we did....man, that's funny.

[trailerkid]

Just think if KC had built an arena around 1990. No way in hell would another get built as an upgrade......

KC didn't need a new arena in 1990. However, it did in the late 90s.

TK:

why did (do) we need an arena? No sports team is coming here. Will they have concerts every other nite? Seriously.

As for the person who says SAC didn't support them any more than we did....man, that's funny.

1. We have more than 2 years for tenants to move in.

2. The Sprint Center will pump millions of concert-goes into an area of downtown that looked like a Target parking lot.

3. Updating our tourism facilities is necessary for us to rebound and attract events and conventions (e.g. Big XII and stuff they wouldn't even look at us before).

[KCPowercat]

Just think if KC had built an arena around 1990. No way in hell would another get built as an upgrade......

KC didn't need a new arena in 1990. However, it did in the late 90s.

TK:

why did (do) we need an arena? No sports team is coming here. Will they have concerts every other nite? Seriously.

As for the person who says SAC didn't support them any more than we did....man, that's funny.

I'll assume you aren't serious with this comment. Even w/o one major tenant moving in to the new arena we needed it for the future of conventions, concerts, and major tournaments.

[Highlander]

Just think if KC had built an arena around 1990. No way in hell would another get built as an upgrade......

KC didn't need a new arena in 1990. However, it did in the late 90s.

TK:

why did (do) we need an arena? No sports team is coming here. Will they have concerts every other nite? Seriously.

As for the person who says SAC didn't support them any more than we did....man, that's funny.

SAC has great attendance and gets a lot of fan support. Not enough apparently to build the arena that could be necessary to keep them there. Perhaps the end of the era of publicly financed sporting venues is upon us.

Too many conclusions are drawn from the Kings history in KC about our chances to lure and support a team. There were two things going on when the Kings left in 85 that should be considered: 1) The NBA was only beginning its meteoric rise in popularity. By that time, the Kings had been bought by owners from Sacramento and the writing was on the wall. Attendance plummented. 2) The Royals were still a major power in baseball and, in fact, would go on to win the world series that year. Serious competition for a league like the NBA that had not quite captured mainstream audiences yet.

I would think that given the NBA's popularity today, KC's appetite for college basketball (true, doesn't always translate into love for the NBA game), and the Royals' annual dismal performance, an NBA team would do quite well here. Let's face it, given baseball's failure to get its act together, small market teams (and particularly the Royals) have a tough time getting in a position for a serious chance at contention. Certainly, the NBA must realize that there may be an opportunity or niche opening here with the Royals ending up at the bottom of the heap on an annual basis.

[KCMax]

I think its difficult to say one way or another whether or not an NBA team can succeed here. I say its worth trying.

But I think its ridiculous to blame Sacramento fans for this. We "stole" the Kings from Cincinnati just like Sacramento "stole" them from us. I don't remember there being that big of an outcry at the time they left here, and not many have said much about getting an NBA team back or missing the NBA since. I don't blame them for not wanting to pay for a new arena, when the current one is only 16 years old, and if that makes them bad fans, well then I guess Royals and Chiefs fans are bad fans as well.

[Thrillcekr]

I think its difficult to say one way or another whether or not an NBA team can succeed here. I say its worth trying.

But I think its ridiculous to blame Sacramento fans for this. We "stole" the Kings from Cincinnati just like Sacramento "stole" them from us. I don't remember there being that big of an outcry at the time they left here, and not many have said much about getting an NBA team back or missing the NBA since. I don't blame them for not wanting to pay for a new arena, when the current one is only 16 years old, and if that makes them bad fans, well then I guess Royals and Chiefs fans are bad fans as well.

That's exactly why I say screw the Kings. It seems like if you don't build them a new arena every 15 years they move so they can stay right where they are or be someone else's problem as far as I'm concerned.

[Highlander]

.

[troostwood]

The Star Headline, if the Kings came back would be:

KC: Once and Future Kings.

[DTO]

I wouldn't mind spliting them again.