Kings make unscheduled $12 million loan payment to city

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[font=verdana,geneva,arial,helvetica,sans-serif]Kings make unscheduled $12 million loan payment to city



By Terri Hardy -- Bee Staff Writer
Published 3:57 pm PDT Wednesday, April 13, 2005

A Sacramento Kings representative Wednesday quietly entered city Treasurer Tom Friery’s office and surprised him with a $12 million check.

The unscheduled payment will whittle the team's $83.6 million city loan balance to less than $72 million.

"Wow, I'll be needing to get this to the bank," Friery said in an interview. "It's a good business decision by the Kings and it's certainly appreciated by the city."

Kings' spokeswoman Sonja Brown shrugged off the payment. "It's no big deal," Brown said. "We've been making our interest payments and just decided to reduce our principal."

Relations have been strained between the Kings and some city leaders in recent months over the controversial question of how and where to build a new arena for the team and concerns that the team may leave Sacramento if the facility is not built.

City Councilman Rob Fong, who recently has pushed for renewed council discussions on the arena, said he viewed the King's payment as a symbolic answer to questions about the team's commitment to Sacramento.

"This is a tremendous show of good faith," Fong said.

In 1997, the City Council agreed to give former Kings owner Jim Thomas two loans: $73.7 million to shore up the team's finances and $8.5 million to help repay the first loan back. When the team was sold to Joe and Gavin Maloof, they acquired the loan as well as the responsibility to pay it back.

Since that time, the team has made all its scheduled payments on the first loan, with most of the money going toward interest, Friery said.

No payments were scheduled on the second loan until July 2005.

For more details, see Thursday's Bee.

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[KP]

Thats it they're moving...

 

[VF21]

Nah, if they were moving they'd just leave in the middle of the night and stiff the city.

 

[Rockmeister]

Mike Lam is interviewing Grant Napier right now and he asked Grant what he makes of the Maloofs paying 12 million. Grant stated "its no big deal". He goes on to say "its just like paying a loan or your mortgage, its really not that big of a deal".

 

[Rockmeister]

Grant is also saying that if Sacramento don't get a new arena soon, the Kings will leave.

 

[The Freak]

Pshh...Lets see him dish out 12 Mill then..

 

[kennadog]

I could write a whole page about my feelings on this subject (don't worry, I won't). I keep wishing there was some citizen group formed to support getting an arena deal done. I'd join in a flash. Somehow the citizens who want an arena need to find a very public way to let the politicians know. Let's just say, I've lived in and around Sacramento for nearly 40 years and I really don't want to go back to no arena at all for any events. There is no other venue that's going to work for the 75% of events at Arco that are non-Kings/Monarch events.

If we force the Maloofs hand and have them take another City's better offer, we will be left with the option of no arena or building a new arena with $0 from the Maloofs. Kansas City's mayor told Sacramento that they are sorry they ever let the Kings go. Not to mention team ownerships like the Maloofs don't fall out of the sky. This whole thing just depresses me.

 

[nebs]

Not to mention team ownerships like the Maloofs don't fall out of the sky.

And that is huge right there. If they left we'd probably get a new team eventually but it would most likely be back to the type of team we had in the 90's.

 

[VF21]

I am not going to be drawn into a panic mode because of Grant Napear and his blatherings on his radio show...

They made an early payment on the principal on the loan. No big.

 

[Prophetess]

now however, if one of those freak tornados had actually torn the roof off of Arco instead of near it, then i might panic....but grant running his mouth? nah....

 

[HndsmCelt]

Nah, if they were moving they'd just leave in the middle of the night and stiff the city.

Why do I get this bizarre immage of Darius stuffing the back of bibby's navagator full of towls while Tag and Brad break into a consssion stand to steal a pop corn machine?

 

[PixelPusher]

I am not going to be drawn into a panic mode because of Grant Napear and his blatherings on his radio show...

They made an early payment on the principal on the loan. No big.

The sooner you pay off the principle, the less you'll end up paying in interest in the long run (that's assuming there is interest on this loan).

Jeez...I sound like one of those guys on the "Talking Money" radio show on Saturday mornings.

 

[slugking50]

if he Maloofs are such great businessmen, Why don't they pay off this loan instead of just paying off the interest? They still owe 72 million. Why not just pay the damn thing and then you don't have t5o worry about it?! I just dont get it.

 

[Bricklayer]

if he Maloofs are such great businessmen, Why don't they pay off this loan instead of just paying off the interest? They still owe 72 million. Why not just pay the damn thing and then you don't have t5o worry about it?! I just dont get it.

Uh..maybe because they don't have $72 million in cash just sitting sournd in the closet?

If I recall correctly that loan was given on very friendly terms, so the Maloofs likely have little reason to try to refinance it -- probably as low as they are going to get. And at the moment its also a potential trading piece with either Sacto or another city with a new arena deal. If they had to move, they might be able to convince the new city to pay it off for them, if they stay, its leverage.

 

[slugking50]

Uh..maybe because they don't have $72 million in cash just sitting sournd in the closet?

If I recall correctly that loan was given on very friendly terms, so the Maloofs likely have little reason to try to refinance it -- probably as low as they are going to get. And at the moment its also a potential trading piece with either Sacto or another city with a new arena deal. If they had to move, they might be able to convince the new city to pay it off for them, if they stay, its leverage.

And thus, Keeps the wood on the fire for those who are convinced the Kings are moving or just have some grand conspiracy in action/waiting to strike. I would have liked to see them to have paid a bit every year. till last year I was under th presumption that they had been paying it off on a regular basis. Oh well.

Well i know they dont have 72 million in their closet. Its probably in their safes behind a piece of artwork that contains a doubled safe.

 

[Rowdyone]

Without knowing the exact terms of the repayment schedule for both loans it's difficult to draw any valid conclusions as to what the Maloof's long term intentions are. But, if they were only required to make interest only payments with a very favorable interest rate they would be better off to use this resource to generate income or defray higher interest debt elsewhere. So, my admittedly optimistic conclusion is that this is good news in terms of long term presence of the Kings in Sacramento.