Latest letter from City to League and Team requesting written assurances

[Siranthony]

Well, sorry for the long delay in my response, but the danger comes from other sources:

1) We moved into a subordinate position on the loan;
2) In the original contract, it is specified that the City maintains the arena;
3) In the event of a condemnation, the lease is off -- the "prior owner" makes no more payments.

Put those three together, and it's very easy to see how we could end up managing our own property -- because we did buy it -- with no tenant -- because the prior tenant has no more money to pay subordinate lenders.

We are in such deep trouble here, it's hard to conceive of it. This will cost us a tax hike, but at least we get to occupy our property.

That 1997 transaction -- it wasn't a loan -- is the gift that keeps on giving.

A loan would have been:

1) We borrow $75M by selling bonds, then "give" that money to the owners, with a payback schedule;
2) We have SUBSTANTIAL penalties if they leave early;
3) We never move into a subordinate position.

As it is, I gotta tell you... This deal is surprisingly bad for us.

If the Maloofs leave and tell us that they have fulfilled the terms of their contract, you can wait for the other shoe to drop.

What bothers me is that the NBA itself had us moved into a subordinate position. Just, wow. They were in on this too?

Hasn't hit the fan yet, but it's in flight.

It sounds like lawers will be involved. This whole thing sounds creepy. Are you saying the city was supposed to maintain the building? Why hasn't that been mentioned before? It looks like the building has been intentionally neglected in order to get out of the lease. But if the city was really responsible then It's they're fault. It smells fishy and immoral. The Kings ask for a loan and screw the city out of payment on technicalities leaving the city in a bad position. If this is the case, the Maloofs better expect some bad carma comming they're way. I don't understand why the city wouldn't maintain the building. Where did the manitenance funds come from? Was it included in the bond payments?

 

[Section 101]

Well, sorry for the long delay in my response, but the danger comes from other sources:

1) We moved into a subordinate position on the loan;
2) In the original contract, it is specified that the City maintains the arena;
3) In the event of a condemnation, the lease is off -- the "prior owner" makes no more payments.

Put those three together, and it's very easy to see how we could end up managing our own property -- because we did buy it -- with no tenant -- because the prior tenant has no more money to pay subordinate lenders.

We are in such deep trouble here, it's hard to conceive of it. This will cost us a tax hike, but at least we get to occupy our property.

That 1997 transaction -- it wasn't a loan -- is the gift that keeps on giving.

A loan would have been:

1) We borrow $75M by selling bonds, then "give" that money to the owners, with a payback schedule;
2) We have SUBSTANTIAL penalties if they leave early;
3) We never move into a subordinate position.

As it is, I gotta tell you... This deal is surprisingly bad for us.

If the Maloofs leave and tell us that they have fulfilled the terms of their contract, you can wait for the other shoe to drop.

What bothers me is that the NBA itself had us moved into a subordinate position. Just, wow. They were in on this too?

Hasn't hit the fan yet, but it's in flight.

What you arent seeing is the lease agreement between the team and the city. The lease may say the team is responsible for maintaining the arena.

 

[Trueblood]

Thanks for the clarification on the loan. Knowing all of that, I almost feel lucky that we had these last 13 years. I remember rumors of San Diego and Anaheim going back to before the Maloofs bought the team.

 

[Fireplug]

Well, sorry for the long delay in my response, but the danger comes from other sources:

1) We moved into a subordinate position on the loan;
2) In the original contract, it is specified that the City maintains the arena;
3) In the event of a condemnation, the lease is off -- the "prior owner" makes no more payments.

Put those three together, and it's very easy to see how we could end up managing our own property -- because we did buy it -- with no tenant -- because the prior tenant has no more money to pay subordinate lenders.

We are in such deep trouble here, it's hard to conceive of it. This will cost us a tax hike, but at least we get to occupy our property.

That 1997 transaction -- it wasn't a loan -- is the gift that keeps on giving.

A loan would have been:

1) We borrow $75M by selling bonds, then "give" that money to the owners, with a payback schedule;
2) We have SUBSTANTIAL penalties if they leave early;
3) We never move into a subordinate position.

As it is, I gotta tell you... This deal is surprisingly bad for us.

If the Maloofs leave and tell us that they have fulfilled the terms of their contract, you can wait for the other shoe to drop.

What bothers me is that the NBA itself had us moved into a subordinate position. Just, wow. They were in on this too?

Hasn't hit the fan yet, but it's in flight.

That is pretty much what Marcus Breton indicated to me as well. It has been well "hushed up" how tenuous a position we are in. We almost have to shame them into not taking advantage of the legal position they actually have over us. Having not been able to find yet the actual document clearly stating the Relocation Penalty I can't state this with 100% certainty, but it sure appears that the Kings can just walk away from us, give us the $25 million team share and be completely legally free of us and claim they fulfilled the letter of the deal. I think we are screwed.

 

[Siranthony]

Can anyone explain some details on the contract? I would like to know more details on maintaining the arena. Who pays that bill? The city didn't build the arena. I heard there was a study of the arena for long term viability. Was the city aware of it when they gave team the bond?

If the city loses the Kings and gets stuck with a 77 million dollar bill for an Arena they did not build, there will be yell to pay.

I would also like to know the condition of the building. I am aware it is in "shabby" condition but is it condenmable? It may not be up to NBA standards but with a new roof, resurfacing parking lot and some repairs could it continue as a serviceable facility?

 

[Siranthony]

Thanks for the clarification on the loan. Knowing all of that, I almost feel lucky that we had these last 13 years. I remember rumors of San Diego and Anaheim going back to before the Maloofs bought the team.

Actually I'd rather they left then. Now we tax payers may have to pay the bill for an arena that has no team and apear to need a lot of work.

 

[Siranthony]

Here is an excerpt from a story I found online. It says Arco has not been condemned. This was in late 2006. Have things changed? I have not heard that Arco has been condemned

Ailene Voisin: Believe it or not, the Maloof family is here to stay By Ailene Voisin -Bee Columnist Last Updated 12:56 am PDT Saturday, September 16, 2006 Story appeared in SPORTS section, Page C1 After eight seasons of Maloof watching and listening, of probing and pestering, this is the deal: Those Maloof-to-Las-Vegas rumors that have tormented Kings fans since the brothers landed at Sac International are nothing more than a reflection of the community's acute and chronic insecurity woes. Local conspiracy theorists need to find another cause. It's really that simple. It should have been that simple all along. There is no devious plan to relocate. There is no diabolical plot to trash Arco Arena.