Maloof Response to new plan
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Smart move by the Maloofs. They're being consistent as a month or so ago they said that they would no longer comment on the arena and despite the new developments, they are sticking to that. If something is going to get done, it's best that they don't make too many pro Sacramento quotes as that could just prolong a process that can't be prolonged anymore.
I'm ok with the response. They could have said nothing or repeat the no comment mantra to keep in line with the NBA's request. But they sent a message that they are cooperating and talking with ICON-Taylor. It's significant if you are concerned about that March filing deadline. There is a bit of momentum going now and despite all the frustrating attempts over the years, filing at this point would hurt their image beyond even this town. This, while unofficial, is probably the last arena attempt for this town while there is a hometown NBA tennant in the discussion. We have what amounts to the best team looking at working this out and a unified city council that wants to do everything in their power. To file now would make them the bad guys because they didn't give the city one last chance.
It's actually a smart move on whoever is in charge of the Maloofs PR. It's basically reverse psychology on their part. They played the whole , "we need a new arena and you love us!" bit and the people didn't like billionaires begging for money. Now KJ, the NBA, and Maloofs are almost making it look like the Maloofs are getting an arena whether they like it or not!! Hahaha. Keep playing it cool fellas, keep playing it cool.
I think they responded in that manner because of all the comments from the public about "Millionaires begging for more money!" They are trying to let the city come up with the arena plan now, they will supply the necessary info to ICON but stay out of the limelight for the most part (and I believe David Stern even warned them to stay out of the light for this).
Considering the lease deal the various sides negotiate, I don't like it. The amount the Maloofs are willing to pay, resolving the current loan, what they'll demand in terms of parking, maintenance, what they get from signage rights, marquee rights, the location, any land donations, and so forth, have a direct and significant effect on the financing plan.
Just how set in stone is the March 1 date? Does anyone know? I'm asking because the 90 day period obviously overlaps the March 1 date. Suppose the Maloofs don't feel like leaving town, but on May 9, the deal the Council gets misses the mark, and it goes down on a 6-3 vote; then what? I'm just wondering if they could file "late" to relocate, or if that's it. Or maybe, like everyone else, they figure there's no season next year, and it doesn't matter when they apply.
By the way, I don't buy for a second that ICON can build an arena in the rail yards for $300M. Any plan they come back with will need significant cost overrun protection, and I suggest the City Council will not be prepared to take that responsibility.
Just how set in stone is the March 1 date? Does anyone know? I'm asking because the 90 day period obviously overlaps the March 1 date. Suppose the Maloofs don't feel like leaving town, but on May 9, the deal the Council gets misses the mark, and it goes down on a 6-3 vote; then what? I'm just wondering if they could file "late" to relocate, or if that's it. Or maybe, like everyone else, they figure there's no season next year, and it doesn't matter when they apply.
By the way, I don't buy for a second that ICON can build an arena in the rail yards for $300M. Any plan they come back with will need significant cost overrun protection, and I suggest the City Council will not be prepared to take that responsibility.
The cost of the building itself should be the same at either site. Now if your talking about the infrastructure around it then yes there is additional costs, but thats true at the railyards whether an arena is there or not if they want to build something there.
Also, they don't have to go all out on a building now. They just need to get one that fits the minimum needs with room to expand/renovate/etc in the future when the economy gets better.
Also, they don't have to go all out on a building now. They just need to get one that fits the minimum needs with room to expand/renovate/etc in the future when the economy gets better.
What MSE will get and/or contribute and what happens to the city loan are all things that are to be negotiated over the next 90-days by the team in talks with the city and with MSE. That is perfectly normal. That is how you arrive at what real numbers are and what is the best deal that can be agreed on by all parties.
The city loan is the least of the problems. I can think of four basic answers. 1) the team leaves, sells Arco and pays off the city; 2) the team leaves and deeds the property over to the city; 3) there's a new arena deal and that loan is paid off with new financing; 4) there's a new arena deal and the city rolls over the loan to the new arena deal, maybe with a change in terms, like re-amortization.
Of course, the city could forgive the loan as part of a deal, but I don't think that will be what happens.
The city loan is the least of the problems. I can think of four basic answers. 1) the team leaves, sells Arco and pays off the city; 2) the team leaves and deeds the property over to the city; 3) there's a new arena deal and that loan is paid off with new financing; 4) there's a new arena deal and the city rolls over the loan to the new arena deal, maybe with a change in terms, like re-amortization.
Of course, the city could forgive the loan as part of a deal, but I don't think that will be what happens.
I don't think the loan will be forgiven. There are too many people that would be up in arms over that. They already overreact even now and spread all kinds of false statements about the team not paying it off. They have never missed a payment and have even on one occasion paid a large chunk of cash in addition to their payments. The loan is the last thing to worry about. They should start worrying about the lost jobs and loss of tax revenues that will take decades to make up in other ways. The team won't skip town without paying that off. There is zero chance the NBA would allow that kind of PR disaster for their league. Very bad business since it's directly tied to the league and not non-NBA related.
Definitely not the response you'd want or expect to see, especially not with the seemingly rejuvenated arena effort. It doesn't do any good to read too much into these things because it's just speculation but the fact that they're no longer offering any reassurance that they're committed to Sacramento isn't very encouraging. If for no other reason, you'd think they'd at least try and make folks think they're committed to staying just in order to not hurt their already poor attendance any further.
I just read the latest article on the Bee and it's not encouraging at all. Taylor himself admits the project is a longshot and will more likely fail than succeed. "The odds on this deal are not good, and it does worry me it is more likely to fail than be successful", is the direct quote. When the developer himself isn't optimistic about it, why should we be? Also, if the city officials are set on it getting built without taxpayer's money, which they appear to be, then this thing is already dead in the water.
While not optimistic, if it was obviously not possible, Taylor/ICON wouldn't even have bothered to put in a proposal in the first place. All the work they will put in over the 90-day period they are doing for free. They have promised to tell the city if it isn't financially possible, but I can't concieve of spending their own money, if they thought for sure it was impossible before they started.
Also, it may end up being impossible, because the city can't provide enough of the financing needed or can't get approval for food/beverage, hotel and/or rental car taxes or whatever is porposed The developer promised to have a "menu" of options for the city to look at in terms of city financing, but that may be the financial deal killer here. It's probably all up to the city, in the end, as to whether this is possible or not. Same as its always been. At least the city will have some real numbers and options to look at and not just made up estimates.
As to why we should hope? Apparently the Taylor/ICON team have some hope as they are spending their own money to find out. Secondly, anyone who wants the Kings here, better hope, until there's no hope left. The developer believes there should be a new sports/entertainment venue in Sacramento, with or without the Kings. I just hope its with the Kings.
Also, it may end up being impossible, because the city can't provide enough of the financing needed or can't get approval for food/beverage, hotel and/or rental car taxes or whatever is porposed The developer promised to have a "menu" of options for the city to look at in terms of city financing, but that may be the financial deal killer here. It's probably all up to the city, in the end, as to whether this is possible or not. Same as its always been. At least the city will have some real numbers and options to look at and not just made up estimates.
As to why we should hope? Apparently the Taylor/ICON team have some hope as they are spending their own money to find out. Secondly, anyone who wants the Kings here, better hope, until there's no hope left. The developer believes there should be a new sports/entertainment venue in Sacramento, with or without the Kings. I just hope its with the Kings.
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The naysayers from the Bee brought up San Diego's arena and how things are wonderful with that. I checked out its official web site and looked at their scheduled events.
http://valleyviewcasinocenter.com/events.php?page=0
Their slogan is "Bringing You the Best...Live!"
WWE Smackdown taping (tomorrow)
Tribute to the Reggae Legends Festival
Harlem Globetrotters (Feb 25 and 27)
ERIC CLAPTON (March 6)
GET MOTIVATED BUSINESS SEMINAR
First Robotics Competition
Nuclear Cowboyz
JUANES presented by COX
CIRQUE DU SOLEIL QUIDAM
A DAY TO REMEMBER
RICKY MARTIN (May 8)
JOEL OSTEEN
GLEE (May 28)
WISIN Y YANDEL
KATY PERRY
Michael Jackson The Immortal World Tour (Jan 2012)
That's a pathetic schedule. Hardly any events. That's our future if a new arena is not built, but the worst case being no events with no arena at all.
http://valleyviewcasinocenter.com/events.php?page=0
Their slogan is "Bringing You the Best...Live!"
WWE Smackdown taping (tomorrow)
Tribute to the Reggae Legends Festival
Harlem Globetrotters (Feb 25 and 27)
ERIC CLAPTON (March 6)
GET MOTIVATED BUSINESS SEMINAR
First Robotics Competition
Nuclear Cowboyz
JUANES presented by COX
CIRQUE DU SOLEIL QUIDAM
A DAY TO REMEMBER
RICKY MARTIN (May 8)
JOEL OSTEEN
GLEE (May 28)
WISIN Y YANDEL
KATY PERRY
Michael Jackson The Immortal World Tour (Jan 2012)
That's a pathetic schedule. Hardly any events. That's our future if a new arena is not built, but the worst case being no events with no arena at all.
It turns out to be 28 total events (for Circque du Soleil 2 per day/3 days, so I think a total of 25 occupied days). And that stretches out to January of next year. Obviously they'll add some stuff, but since October 2010 (before which their calendar registers nothing) they've had a grand total of 2 months (October 2010, March 2011) with 10 dates booked, otherwise fewer. The single biggest headliner coming is literally already dead. And outside of Clapton and Cirque du Soleil, there's really not much there.
In contrast, if my count was right Staples has 10 dead days from now until the final NBA game April 13th, and 5 double-booked (NHL + NBA) days.
In contrast, if my count was right Staples has 10 dead days from now until the final NBA game April 13th, and 5 double-booked (NHL + NBA) days.
Who says that Arco is going to be around long enough to book "replacement" entertainment? They've already found out the land is worth more without the arena than with it. And it is owned by the Maloofs. So it will either be sold off or transferred to the city as part of the loan payback. So who is going to come in and pay for all the deferred mantenance on Arco and book a few dozen events to cover the expenses? If I was a betting man, I would bet the building will be torn down or sold off to be stripped and repurposed.
The arena can't support itself and it would be a gross misuse of funding to spend a lot of money on the deferred maintenance of an economically infeasible arena. Replacing the roof alone would have to cost a quite few million. It simply can't generate enough revenue over time to justify the cost of doing major capital repair/replacement. At least its not worth it if you want to use it for a sports/entertainment venue. It could maybe remodeled for some other purpose.
Saw this on RealGM:
Canucks Sports and Entertainment chairman Francesco Aquilini has been looking for five years a franchise that can be purchased and moved to Vancouver.
Sources say Aquilini is looking into the Hornets, who are currently owned by the NBA.
During an interview this week, commissioner David Stern said Vancouver is one of several markets interested in a relocated NBA franchise.
Stern listed Kansas City, Pittsburgh, Anaheim and Tampa/St. Petersburg as markets with NBA-ready facilities. Vancouver’s Rogers Arena, owned by the Canucks, would qualify as well.
“I have regrets about both Seattle and Vancouver,” Stern said.
The Grizzlies left Vancouver in 2001 after just six seasons.
Aquilini’s interest in an NBA team dates to 2005.
Read more: http://basketball.realgm.com/news#ixzz1E6PHqggU
Canucks Sports and Entertainment chairman Francesco Aquilini has been looking for five years a franchise that can be purchased and moved to Vancouver.
Sources say Aquilini is looking into the Hornets, who are currently owned by the NBA.
During an interview this week, commissioner David Stern said Vancouver is one of several markets interested in a relocated NBA franchise.
Stern listed Kansas City, Pittsburgh, Anaheim and Tampa/St. Petersburg as markets with NBA-ready facilities. Vancouver’s Rogers Arena, owned by the Canucks, would qualify as well.
“I have regrets about both Seattle and Vancouver,” Stern said.
The Grizzlies left Vancouver in 2001 after just six seasons.
Aquilini’s interest in an NBA team dates to 2005.
Read more: http://basketball.realgm.com/news#ixzz1E6PHqggU
And how long would people expect the Maloofs to stick to their "we are not moving" re-assurances.
Seriously, I don't think anyone can question their commitment to staying in Sacramento. This Arena debacle has been going on for a decade yet the Maloofs have kept the team here despite numerous failed attempts to get the new arena. Everything in life has a breaking point and quite frankly I am surprised that the Maloofs have not reached it earlier.
If the new arena is not build the Kings will move and I don't think anyone can blame Maloofs if they move the team because they have been loyal to this community for a decade now and there comes a point where financial stability of the team starts becoming more important than the loyalty to the community. I think they have already proven that they are loyal to the area by sticking around for this long where many other owners would have moved their team a LONG LONG time ago.
I just hope that something can be done so the Kings stay in Sacramento but I am not holding my breath waiting for it.
Seriously, I don't think anyone can question their commitment to staying in Sacramento. This Arena debacle has been going on for a decade yet the Maloofs have kept the team here despite numerous failed attempts to get the new arena. Everything in life has a breaking point and quite frankly I am surprised that the Maloofs have not reached it earlier.
If the new arena is not build the Kings will move and I don't think anyone can blame Maloofs if they move the team because they have been loyal to this community for a decade now and there comes a point where financial stability of the team starts becoming more important than the loyalty to the community. I think they have already proven that they are loyal to the area by sticking around for this long where many other owners would have moved their team a LONG LONG time ago.
I just hope that something can be done so the Kings stay in Sacramento but I am not holding my breath waiting for it.
The Stern interview in question:
ESPN podcast link (Audio link on page)
I actually really enjoyed the interview (almost 55 minutes) but Stern doesn't actually touch on the Kings. He does mention that the NBA's number one priority as far as franchise location goes is to keep all current teams where they are, but he recognizes that isn't always possible.
ESPN podcast link (Audio link on page)
I actually really enjoyed the interview (almost 55 minutes) but Stern doesn't actually touch on the Kings. He does mention that the NBA's number one priority as far as franchise location goes is to keep all current teams where they are, but he recognizes that isn't always possible.
One of my concerns with the Kings right now is the state of the ownership. They could be within 2 weeks of another covenant breach, and I'd have to think 3 of those constitutes a default. So here's a possible outcome:
1) Maloofs have a covenant breach, and default on the Palms loan.
2) Because of cash flow problems, they can't make the full loan payment to the NBA, and they default on the City loan.
3) The Maloofs bite the bullet, and since the arena is the least-valuable piece of real estate they own, they give as much collateral to the City as they can; the arena, and... That's it. We're in second, they don't have $25M (but the make the right statements about, "We are sorry, and we WILL get you your $25M within 6 months").
4) Done.
Given what's happening in NYC with the Mets (the company that guaranteed the $500M in bonds went under, in a Madoff-styled way, so the bonds sold to build Citi are no longer guaranteed -- it's a hideous situation), I don't think my 4-step plan is that far-fetched. The question is, How does the City come up with the funds to pay the bond-holders (we sold $84M in bonds to finance the loan to Jim Thomas, which the Maloofs have inherited).
I hope this doesn't happen, obviously. But it might be in play at this point.
In my opinion (oh, boy, here we go again), this is why you put sports and entertainment facility loans on the ballot. It's just too large a decision for Councils and Boards to make, even if the only public involvement is a land donation.
1) Maloofs have a covenant breach, and default on the Palms loan.
2) Because of cash flow problems, they can't make the full loan payment to the NBA, and they default on the City loan.
3) The Maloofs bite the bullet, and since the arena is the least-valuable piece of real estate they own, they give as much collateral to the City as they can; the arena, and... That's it. We're in second, they don't have $25M (but the make the right statements about, "We are sorry, and we WILL get you your $25M within 6 months").
4) Done.
Given what's happening in NYC with the Mets (the company that guaranteed the $500M in bonds went under, in a Madoff-styled way, so the bonds sold to build Citi are no longer guaranteed -- it's a hideous situation), I don't think my 4-step plan is that far-fetched. The question is, How does the City come up with the funds to pay the bond-holders (we sold $84M in bonds to finance the loan to Jim Thomas, which the Maloofs have inherited).
I hope this doesn't happen, obviously. But it might be in play at this point.
In my opinion (oh, boy, here we go again), this is why you put sports and entertainment facility loans on the ballot. It's just too large a decision for Councils and Boards to make, even if the only public involvement is a land donation.
Public votes of 2/3 majority are not a "let the voter decide" decision. They are a rubber stamp for the word NO. If it was a fair vote, it would be a majority rules vote. Nothing gets passed on a 2/3 vote and absolutely not anything that contains the word tax in there. It's a death sentence once it goes to ballot and on death row until execution the day after the vote. That means you've let only 1/3 of the voting public shoot down the issue. Anyone, like you Arena Skeptic, that advocates going to the ballot knowing that it needs 2/3 for to pass, is being dishonest about their position. Sorry to be blunt, but you are what you are.