Land Swap shot down by consultant - Strike one!

[PurpleHaze]

We are one of the largest cities in the nation to still have a weak mayor system.

It is not a large city at all - far from it - and that's part of the reason it has so little clout. The city of Sacramento, only thing Mayor KJ can exercise his minor control over has a populaton of paultry 465,000. It's not only small nationally but smaller in California than fricking Fresno! Tiny trio of Fairfield-Suisun-Vacaville have half the population of Sacramento! IF county of Sac and city were combined then you'd have that huge, mega city (over 1.5 million) putting it third or fourth largest in state - behind only LA, San Diego and San Jose. It would be larger than San Francisco with its population of about 875,000. But key to their Bay Area, California and national power is that SF city/county is consolidated as one. The city of Sacramento is a pathetic Balcanized cowtown, horribly franctured politically, made up of little personal fiefdoms run by a downtown worthless old boy/old hag network. Over many decades they've made it their life's calling blocking ALL progress (they've already got their greedy nest eggs) and firmly suspicious, jealous, resentful of outsiders, wantabees, developers, private biz - like Maloof's, KJ, etc.

 

[kennadog]

Fresno is bigger, because they have huge acreage inside "city limits." The city of Sacramento should have been annexing areas into the city limits as areas developed. Another dumb City of Sacramento mistake.

Even at 465,000, Sacramento is still larger than most cities that have gone to a "strong mayor" system. That's what's crazy.

 

[Trueblood]

I refuse to look at any comments. This is a serious and maybe unrecoverable blow to a new arena, though. According to news on TV tonight, the city has no plan B. I really have to take some time to absorb this really bad news. Not that I wasn't at all prepared for this. I knew it was so complicated a plan as to be near impossible.

It just boggles the mind that other cities build sports/entertainment complexes without even having a pro sports team and Sacramento can't do anything. Hell, it boggles the mid what tiny little West Sacramento is accomplishing, while
Sacramento just stumbles around failing over and over to get much of anything done, arena aside.

City's without sports teams get arenas done but what's even more suprising is the amount of places that get an arena/stadium done after they have funded 2 already. Seattle didn't but Pittsburgh, Denver, Houston, Dallas, Miami, Atlanta, DC, Philly, Cleveland, St. Louis and Phoenix have all recently financed a 3rd modern sports venue to go with 2 that were already built in the last 20 years.

Sacramento can't get one done:-(

 

[kennadog]

Sacramento can't get one done:-(

Pathetic, isn't it? By the way, Seattle balked at a new BB arena, because the taxpayers had already built a new baseball stadium and a new football stadium. Of course, they now have a city ordinance that prevents providing any public financing for sports venues. Probably the main reason they won't get an NBA team back.

 

[Trueblood]

Pathetic, isn't it? By the way, Seattle balked at a new BB arena, becasue the taxpayers had already built a new baseball stadium and a new football stadium. Of course, they now have a city ordinance that prevents providing any public financing for sports venues. Prbably yhe main reason they won't get an NBA team back.

Right. That's why Bennett was forced to try to get a new arena done in Renton but that didn't have a chance either. Seattle's chance at the NBA is dead for good if they keep relying on the city to try and get something done. It has to come from the private sector. Ballmer and his real estate buddies have to get something done but they would have to own the team so basically, if Seattle wants a team, someone has to sell it to Ballmer first and then he'd have to finance a new arena. I don't know if Stern is wild about going to Seattle without the guarantee of a new arena so they are in a catch 22.

I also wonder what this means for the Maloofs. Assuming the Vision Quest thing gets shot down on the 24th, where do they stand? I'm think that more than anything, they are pro Sacramento because they simply can't afford to relocate. Paying back the original loan plus a $35 relocation fee is outside their budget so they are going to try and stick around for as long as possible. What would happen if they concluded that they are financially better off just staying at Arco but the league keeps demanding that they play in a newer arena? Would they just sell the team or do they have it in them to play hardball and say "NO", we want to stay in Sacramento regardless of whether there is a new arena or not.

 

[LPKingsFan]

Btw...

KJ meet Christopher Cabaldon...

Christopher Cabaldon meet KJ...

Hmmmmm...might this be an option...West Sac isnt THAT far from downtown Sac...and it would still pump life into the downtown Sac area...hmmmmm...

I've always wondered why they never talked about putting one right by Raley Field. Seems like there's plenty of open space/warehouses directly south there.

 

[Larry David]

I've always wondered why they never talked about putting one right by Raley Field. Seems like there's plenty of open space/warehouses directly south there.

There are a host of issues. First, the town is very small with a small budget. Most likely they can’t swing the funds. Second, they are already moving forward with plans to put hotel and offices down there. They are currently putting the roads in … which won’t matchup with an arena footprint. Finally, for a fraction of the cost of an NBA arena they could expand the AAA stadium and try to lure the A’s. If they wanted to get into the pro sports game, it’s a more logical fit with more home games.

 

[Trueblood]

There are a host of issues. First, the town is very small with a small budget. Most likely they can’t swing the funds. Second, they are already moving forward with plans to put hotel and offices down there. They are currently putting the roads in … which won’t matchup with an arena footprint. Finally, for a fraction of the cost of an NBA arena they could expand the AAA stadium and try to lure the A’s. If they wanted to get into the pro sports game, it’s a more logical fit with more home games.

Lew Wolff wants to fund his own baseball stadium and because of that, I always thought that expanding Raley was the way to go as it would cost a lot less than building from scratch. Plus, he wouldn't have to fight the Giants on the territorial rights issue. But I think the problem has to do with corporate sponsors. He feels that he can get his money back and some from the huge and wealthy south bay corporate base whereas Sacramento is basically tapped out from that aspect.

 

[Larry David]

True - you raise valid issues. But I don't think the combination of: (1) outdated arena: (2) no path to a replacement; and (3) no progress on this issue over 10 years – lead to the team staying. Whether they have to draw more from the league’s line of credit, give the city the land to cover the debt or sell the team… relocation seems to be the decision … should the convergence plan die.

The change in tone of the comments here seem to reflect that.

 

[Trueblood]

True - you raise valid issues. But I don't think the combination of: (1) outdated arena: (2) no path to a replacement; and (3) no progress on this issue over 10 years – lead to the team staying. Whether they have to draw more from the league’s line of credit, give the city the land to cover the debt or sell the team… relocation seems to be the decision … should the convergence plan die.

The change in tone of the comments here seem to reflect that.

I agree but I'm just thinking that they don't have the finances to afford relocation. You've brought that up on a few occasions. Knowing that, do they just sell the team since they can't afford to relocate or do you think that someone like SJ, Anaheim or KC will fund the relocation or at least a portion of it? I'm starting to think that if the Maloofs hold on to the Kings, their eventual destination will be decided by who helps fund the relocation.

Edit: I see the part where you talk about line of credit. I was always assuming that they ran out or don't have much more to pull from.

 

[Bricklayer]

Yeah, it's in the Bee article from yesterday, Kamilos has a company called VisionQuest on board to finance($150 million)/operate the State Fair at the new Natomas site should Cal Expo want to play along with the convergence deal still. VisionQuest has ties with the Disney and Univeral companies in the past in running amusement and theme parks. But you have to look on the back page of the article to get THAT...it's not like the Bee would put the GOOD stuff on the front page with the 'THUMBS DOWN' headlines.

Its unfortunate Cal Expo/the state is involved in this, because otherwise I am looking at this Visionquest deal as mana from heaven.

You take the convergence plan, and then have an outside angel investor dump an extra $150mil into the deal for nothing more than operating rights to an amusement park?

1) Visionquest doesn't get any of the land
2) they invest $150mil in the local economy
3) save the local pro sports team in the process
4) open an amusement park in Natomas, something Sacramento has not had before
5) which brings jobs to the region, and gives the businesses in Natomas a 365 day a year anchor tenant to replace the Kings
6) and apparently steps aside for two weeks every year to let the State Fair do its thing on the property, presumably allowing the Fair to take profits from the amusement park over that period.

Er...that sounds pretty good to me. What great things has Cal Expo been doing for the 50 weeks of the year that aren't state fair that would make that proposal a loss for them?

P.S. on the relocation point, I am thinking the Maloofs just sell the land or give it back to the city to settle that loan, and boom, they are gone. The relocation fee is an NBA thing to discourage movement, and once the NBA has decided that Sacto has blown its opportunity, its hard to imagine them holding up the Mlaoofs with it.

 

[kennadog]

Well, unless a miracle happens, at this point the hurdles to moving are a piece of cake compared to trying to get anything done in Sacramento. The Natomas land will pay of the city. Stern has pretty much made it clear that Arco is no longer acceptable and if nothing can be done to replace it, the NBA owners are not going to make it difficult for the Maloofs to leave.

Oh yeah, Arco is most likely going to be razed. Its a dump. No more concerts, circuses, rodeos, ice shows and all the events that won't find a financially feasible venue in Sacramento anymore.

 

[Mike0476]

On Thursday afternoon I got a first hand look (well for the first time since it was built) at what Arco Arena is like behind the curtain. It's not too pretty. I honestly don't see how anyone (WWE, MMA, NCAA, Disney on Ice, Monster Trucks, concerts, etc.) would want to use the facility. I've been behind the curtain for Staples Center too and it's like night and day although I saw a small portion of it with CruzDude and others. I believe it takes like three days to make the ice for shows like Disney on Ice and that's another reason why we don't and can't have a hockey team too.

I would honestly hate to be the visiting team that has to play the Kings because that locker room is like a walk-in closet. It's about the size of my living room.

 

[kennadog]

Yeah and most people never see that part of Arco. People in Sacramento don't appreciate enough the job MSE has been doing to keep it a decent experience for the customers. It can't be easy. I noticed this last year, though, that it's physical decline can't be hidden as well anymore. Of course, there's is just no point to spending more than the bare minimum to keep it functioning at all. It would be a terrible waste of money to do that now. Its pretty sad looking.

 

[Larry David]

Edit: I see the part where you talk about line of credit. I was always assuming that they ran out or don't have much more to pull from.

Nobody knows, but it's 125 million to draw from. I'm guessing they still have some room. If not, when you factor in the loan with the city, the team would have almost 200 million in debt - which would make the Kings the biggest train wreck in the league. (Worse than Memphis - if the debt is that high.) So either they have the funds to move or the Kings will be the A's of the NBA for a long long time. No good option there.

I agree with Brick and Kenna. The Natomas land/Arco will cover the loan and the city will keep broken down Arco. The league probably will waive the fee. Either way, they don't have to pull it out of pocket.

 

[kennadog]

Over half the teams in the NBA were eligible to draw from that line of credit with the league. Quite a few did, including the Kings. Supposedly the Kings took something like $25 million. In this economy, quite a few teams are a train wreck.

The Kings main financial problem is the arena. Its losing events (like NCAA basketball, big concert events) and the deferred maintenance is piling up. I believe the roof needs replacing, but no point spending the millions it would take to replace it. Just patch the leaks, as needed.

 

[JB_kings]

Arco land is probably worth more with the arena torn down than standing. It would be a huge financial drain on the city to remodel and maintain. Way more than the outstanding loan that cause so much hand wringing. And no buyer in their right mind would buy it. Might get a few years running shows though if they let an outside company try. But thanks to the Sleep Train Amphitheater, there a no concerts to book during the good weather months.

Everyone focuses on the costs to keep the Kings here. I never hear anyone even stop to think about the costs the city would face given a problem arena. And the cost to the residents to travel out of town for shows and sporting events. A King dog and beer are way cheaper than a tank of gas to the bay area.

 

[Warhawk]

Arco land is probably worth more with the arena torn down than standing. It would be a huge financial drain on the city to remodel and maintain. Way more than the outstanding loan that cause so much hand wringing. And no buyer in their right mind would buy it. Might get a few years running shows though if they let an outside company try. But thanks to the Sleep Train Amphitheater, there a no concerts to book during the good weather months.

Everyone focuses on the costs to keep the Kings here. I never hear anyone even stop to think about the costs the city would face given a problem arena. And the cost to the residents to travel out of town for shows and sporting events. A King dog and beer are way cheaper than a tank of gas to the bay area.

Actually, not quite.

Something rare is coming to the Sleep Train Amphitheatre on Saturday: a concert.

The appearance by rocker John Mayer will be just the fifth show this year, out of a total of nine. That's one-third as many shows as in 2000, the venue's inaugural season.

The amphitheater south of Marysville was originally hailed as a catalyst for revitalizing rural Yuba County. But with ticket sales spotty and the economy weak, its future is unclear.

The venue was put up for sale three years ago by its owner, concert promoter Live Nation Entertainment Inc. Asking price: $2.7 million, a fraction of its cost.

What's more, Live Nation, in order to limit competition, refused to sell to anyone wanting to stage live shows. That would put the 18,500-seat venue out of business.

Read more: http://www.sacbee.com/2010/08/19/2968862/sleep-train-amphitheatre-sings.html#ixzz0zntQlqS6

 

[Larry David]

Look, regardless of whether: (1) the Maloofs raze the property and sell it to cover the loan: or (2) turn it over to the city to clear the debt – and/or whether the city tries to give Arco a go for a while … the issue was whether the loan will preclude a move. While an issue, it’s not a roadblock. Probably not even a speed bump. With the line of credit, the fee wouldn’t be either (which was my point, not to play which NBA has the most debt)

 

[Larry David]

But I will say this – there is a subplot here with the concerts. There is a pretty decent shot that Arco and Sleeptrain won’t be around in 3-5 years. West Sacramento / Raley Field is looking at putting an amphitheater on their riverfront. Moreover, the consult’s report calls for the same thing at Cal Expo.

If the Kings leave town and the current venues go away, someone will step up collect Sacramento’s discretionary income.

This is something to consider when you consider the motivations of the Cal Expo Board. Option A, turn over power and control to Vision. Option B, try to do the same thing as Vision on their own property without having to compete with the Kings for concerts and other discretionary dollars.

 

[JB_kings]

Look, regardless of whether: (1) the Maloofs raze the property and sell it to cover the loan: or (2) turn it over to the city to clear the debt – and/or whether the city tries to give Arco a go for a while … the issue was whether the loan will preclude a move. While an issue, it’s not a roadblock. Probably not even a speed bump. With the line of credit, the fee wouldn’t be either (which was my point, not to play which NBA has the most debt)

That wasn't my point. The Maloofs or a new owner would have no real obstacles in moving. I'm fairly certain that in fact is plan A for next summer when the NBA goes into lock down mode for the new CBA. Unless someone comes up with a hail mary solution, I think the NBA forces the team to move. Heck they might even use the Kings as poster boys for the league hitting hard times.

The point is that when Arco and the remaining land is handed over in lieu of actual cash repayments, then that's the worst scenario for the city. First, they will have to start making payments on the loan. Selling the property is a huge long shot. Their best option would be to have an outside company run the arena for a few years booking events to offset the loan payments. But the deferred maintenance on Arco is coming home to roost pretty fast. So they are trading one liability for a bigger one later.

I don't think Cal Expo can muster up an amphitheater under any scenario. They tried before and got shut down by local residents for being too noisy. Cal Expo's future is in selling off land for commercial and residential development.

All this because residents got uptight about giving up a few pennies they probably lost in their couch anyway. The city will be in worse shape after the Kings move.

 

[kennadog]

Yep, the River Park residents succeeded in closing down the Cal Expo amphitheater. That's when and why the Sleep Train Amphitheater was built, although I think it's a crappy location. So I envision no amphitheater there. They might do a small enclosed arena. That's still not going to draw the kingds of events/acts that a full-size, multipurpose sports/entertainment would. And if you're going to build that, why not do it soonand keep the Kings?

I'm imaging the Kings gone and Arco razed. THEN, in a few years, people will say they didn't realize how many events were going to be lost to Sacramento and complain about having to drive to the Bay Area, because its so costly and you can't do it on a weeknight, etc.

Mayor of Kansas City's advice to Sacramento? Don't be a stupid as we were and lose a good thing. Now of course, they have a really nice arena, paid for 100% by the city.

 

[Emma]

If the Kings leave town and the current venues go away, someone will step up collect Sacramento’s discretionary income.

This is part of the reason why I really like Kamilos's (sp?, too lazy ) involvement. I have a feeling that whether this ends as a disaster for the Maloofs (a team sale), or a disaster for the city (Kings leave), Kamilos will get ahead and try to do something for the city. I really don't see anything precluding him from offering to take the Kings off of the Maloof's hands to keep them local, whether that be here or within 50 miles.

 

[JB_kings]

This is part of the reason why I really like Kamilos's (sp?, too lazy ) involvement. I have a feeling that whether this ends as a disaster for the Maloofs (a team sale), or a disaster for the city (Kings leave), Kamilos will get ahead and try to do something for the city. I really don't see anything precluding him from offering to take the Kings off of the Maloof's hands to keep them local, whether that be here or within 50 miles.

Kamilos does deserve respect for trying to make something work. Yeah he might just score a fat paycheck from this, but lets be honest he will score one anyway without all this being a smart business person. There are certainly easier ways for him to be making money than trying to make all these moving parts stand still long enough to do a deal. Too many people in this town won't touch this at all and some of them really should.

I don't see any local owner stepping up like Kamilos. Stern really has a large presence when it comes to selling NBA teams. They usually fetch record sales numbers. So figure at minimum 375-400 million. Even if the Maloofs had to sell, they still have a big arena issue here in town. So no sale unless that gets settled first and no owner is going to come in and finance a new building. And a new building is about 500 million. Of course if there is an owner who has intention of moving the team to another city with a great arena already and willing community to support. Then there might be a line of guys willing to pay top dollar for a team ready to relocate. However, I'm still not convinced the Maloofs are done as owners.

 

[Trueblood]

Nobody knows, but it's 125 million to draw from. I'm guessing they still have some room. If not, when you factor in the loan with the city, the team would have almost 200 million in debt - which would make the Kings the biggest train wreck in the league. (Worse than Memphis - if the debt is that high.) So either they have the funds to move or the Kings will be the A's of the NBA for a long long time. No good option there.

I agree with Brick and Kenna. The Natomas land/Arco will cover the loan and the city will keep broken down Arco. The league probably will waive the fee. Either way, they don't have to pull it out of pocket.

Not to mention the money they have to pay back on the Palms.

OTOH, I can't see the league waiving the relocation fee. Everyone who has ever moved has had to pay a relocation fee and if the Kings don't have to, it raises a lot of red flags and opens up a new can of worms. Clay Bennett will say that he had the same problem with an outdated and lame arena but still had to pay the relocation fee as will Shinn when he left Charlotte. Plus, it will be tough to define what qualifies as a fee being eligible for waiver or not. If the Kings get away with it, everyone will try to find loopholes.

I'm thinking that at the end of the day, it will become a bidding war between city's trying to lure the Kings. How large a portion of the relocation fee that a city is willing to pay will become one of many criteria for the Maloofs in choosing where to move.