Marcos Bretón: Owners pulled old switcheroo

G_M · Oct 31, 2006

http://www.sacbee.com/100/story/69234.html
The Kings appear to be trying to take over design control.

By Marcos Bretón - Bee Sports Columnist

Last Updated 12:20 am PST Tuesday, October 31, 2006
A veil of secrecy was pulled aside on the back-room negotiations between Sacramento and the Kings over a proposed downtown arena Monday.

[FONT=arial,helvetica,sans-serif]An appellate court judge ordered the release of the city's most recent arena proposal, which was sought by an anti-tax group looking to make local politicians look bad in their dealings with the Kings.[/FONT]

[FONT=arial,helvetica,sans-serif]Also, the county revealed other documents in response to a Freedom of Information Act request filing by Bee reporter Mary Lynne Vellinga. She has unearthed the real story here -- the fascinating arena demands made by the Kings' owners.[/FONT]

[FONT=arial,helvetica,sans-serif]Read the Bee story and the arena negotiating papers for yourself at www.sacbee.com/ links. What you'll find is a big difference between what the Kings' owners say in public and what they say in private. [/FONT][FONT=arial,helvetica,sans-serif]In public, over the summer, the Sacramento Kings Limited Partnership signed a preliminary term sheet with Sacramento with one big concession: that Sacramento would retain design control of the proposed new arena at the Union Pacific railyard.[/FONT]

[FONT=arial,helvetica,sans-serif]This was the major victory trumpeted by local politicians who got rolled in almost every other respect by Kings negotiators. [/FONT]

[FONT=arial,helvetica,sans-serif]But the negotiation documents released Monday indicate the Kings have been working behind the scenes to take back design control from Sacramento. [/FONT][FONT=arial,helvetica,sans-serif]In fact, the Kings propose that if they don't like the design or if Sacramento doesn't follow their design suggestions, the Kings will walk away from the deal.[/FONT]

[FONT=arial,helvetica,sans-serif]Why is this significant? [/FONT][FONT=arial,helvetica,sans-serif]Because the Kings actually signed a piece of paper on this point and now are trying to change the rules of the game. This is interesting because since September the Kings' owners have claimed that Sacramento double-crossed them on the number of parking spaces a new arena would have.[/FONT]
[FONT=arial,helvetica,sans-serif]But the truth is: There is no signed piece of paper stating how many parking spaces a new arena would have. [/FONT][FONT=arial,helvetica,sans-serif]So when the smoke clears, which party is truly going back on a signed agreement? [/FONT][FONT=arial,helvetica,sans-serif]The Kings.[/FONT]

[FONT=arial,helvetica,sans-serif]Sacramento pressed for design control because the Kings' owners refused to contribute a dime to the inevitable cost overruns on the arena. We repeat: The Kings will not contribute a dime to cost overruns or to the actual construction of a $500 million arena. [/FONT][FONT=arial,helvetica,sans-serif]And now, according to documents from the negotiations, the Kings want to lower their rent by $1 million if they aren't satisfied with the design of the arena. Aside from $20 million for arena repairs and the actual running of the building, the Kings' only financial commitment to the arena was an average of $3 million a year in rent. But it turns out, they also want some relief from that. [/FONT][FONT=arial,helvetica,sans-serif]What does it all mean?[/FONT]

[FONT=arial,helvetica,sans-serif]Many of you violently disagree with Sacramento placing two measures on the November ballot to raise the county sales tax and allocate $500 million of the proceeds to build a downtown arena controlled by the Kings' owners. On general principle, it means you're probably right. But as has been stated here before, principles and pro sports have nothing to do with each other.[/FONT]

[FONT=arial,helvetica,sans-serif]By studying cities large and small across America, it's clear that keeping sports owners happy entails giving them the moon and stars. Based on the documents released Monday, Sacramento seems willing to hand the Kings' owners the moon. But the Kings' owners want all the stars as well, and when they didn't get them, they walked away.[/FONT]

[FONT=arial,helvetica,sans-serif]Since September, the Kings' ownership began trying to tank the downtown arena ballot campaign for reasons only they know for sure. [/FONT][FONT=arial,helvetica,sans-serif]First they walked away from the negotiating table, then they began making assertions of being misled by Sacramento officials that are not supported by facts. And then they made demands that even eager Sacramento officials denied.[/FONT]

[FONT=arial,helvetica,sans-serif]Maybe it all means the Kings want to stay in Natomas? [/FONT][FONT=arial,helvetica,sans-serif]Maybe it means that despite their flaws, Sacramento officials have shown a level of commitment to keep the Kings not matched by other California cities? [/FONT][FONT=arial,helvetica,sans-serif]It surely means that when you're owners of a beloved sports team, you think you can do, say and demand anything you want and get away with it.[/FONT]

Arena Skeptic · Oct 31, 2006

Incompetent politicians + lying team owners = royal mess.

It's starting to look to me as though a vote for Q&R is a vote for renewing our cowtown status.

KP · Oct 31, 2006

It just doesn't look like they want to stay, it gets clearer and clearer every day...

VF21 · Oct 31, 2006

Please explain, KP. I honestly do NOT understand how you can derive from what's happened that the Maloofs don't want to stay. They may not like this deal, but that doesn't mean they're intent on leaving - at least not yet. Of course, if people say it enough, it may eventually come true.

VF21 · Oct 31, 2006

I'll restate my vehement objections to having this kind of document released.

Business entities conduct negotiations every single day. Often times, some of the proposals made by one side and tossed by the other bear little or no resemblance whatsoever to the final deals that are actually struck. It's called ... negotiation. Offer and counter-offer. Proposal and counter-proposal. It's how business operates.

We live where representative government is the norm. We elect officials to do our business. They draw up proposals, they come to tentative agreements, etc. and then present them to the people for a vote.

The problem here is that Q & R were put on the ballot as a desperate measure by the county before they had any kind of real agreement with the Maloofs. In addition, as has been brought out numerous times before, the developer doesn't even own the land yet.

This was, in hindsight, a terrible idea. Had the Maloofs and the city/county actually come to terms, it might have been alright. Now, however, the Maloofs are not willing to support the measures since there's no guarantee there will be a MOU that actually addresses their needs. You cannot blame them for that.

Time and time again the Maloofs have shown their support for Sacramento and the people. Time and time again they have said they will make every effort to find a way to stay if these proposals do not pass.

I'm not saying they haven't considered moving, because we all know they have. Up to this point, though, I don't think they've given up on getting a new arena built in Sacramento.

The nay-sayers are really getting their wish on this. Not only do they get to shot the proposal down in flames, they get to point fingers all over the place. It's only if you look closely that you realize they're pointing fingers at smoke and mirrors - at a tentative proposal that was not even initially agreed to and is now completely off the table.

JB_kings · Oct 31, 2006

The real downside of this mess is that after this vote is over, the city and county people will really shy away from associating with this arena issue. This isn't good for people like me who looking for a plan B. It's tough to find any positive notes here.

rhythmless · Oct 31, 2006

vf, ill admit that im not very knowledgable on the arena issue, but i am definitely for the kings staying in sacramento. im a little confused though. is this piece of "signed" paper the released information, or a different document?

in the article, it says that the documents were released, but others have been as well.

i agree that preliminary contracts can be kept in secrecy, since they are rough plans and business propositions, but what about the signed document, where the maloofs actually agreed to something in writing? isnt that different? I feel that i have a right to know that the maloofs are backtracking on an agreement that has been signed.

Arena Skeptic · Oct 31, 2006

VF21 said:

Okay, here's why the voters needed to know: The Maloofs wanted a clause that says they get to UNILATERALLY lower their lease payment if they feel the building isn't up to standards. That's just one of the many, many areas of disagreement, but this one by itself is something the users need to learn BEFORE they vote, not AFTER.

Man, be serious. We have the right to this information!

And look at the proposed railyard layout. That's a lot of acreage. Then through in the 1,000 sphere of influence, and realistically, they could end up controlling 30% of the railyard. That's just wrong.

And we don't have the right to know that?

What color is the sky in your universe??

After seeing the chasm between what the pols wanted, what the term sheet stated, and what the Maloofs wanted, sorry, but this information MUST BE MADE PUBLIC. This is something we're VOTING on; this isn't your friend going to buy a car, and he wants to keep it private. This affects about 1.2 million residents of this county.

We had the right to know. Period. It looked to me that no one was proud of the since-released MOU, and I needed to know why. Now I know why; they needed to be ASHAMED of these documents.

VF21 · Oct 31, 2006

Excuse me?

What the Maloofs may have said they wanted is totally irrelevant because ... I'll say it slowly ... IT WASN'T AGREED TO. That happens all the time in business negotiations. In fact, NOTHING - as in not any part - has been agreed to in any kind of binding fashion.

Am I saying to vote yes or no? Nope. What I'm saying is this is classic bait and switch.

You can cry that you needed to know that information all along. Unfortunately, your user name reveals your pre-conceived bias about the situation.

You can leave out the sarcasm and "what color is the sky in your universe" comments, too, thank you very much.

If you want to vote NO because there is no real agreement in place, fine. If you want to vote NO because the developer doesn't even own the land yet, that's also fine.

You didn't need to know any of this to vote no. Your mind was already made up. You can pretend otherwise, but quite frankly it just makes you look silly.

You need to be ashamed of yourself for your act of righteous indignation. It really doesn't look very good.

rhythmless · Oct 31, 2006

what about what they did agree to? how much weight does a "preliminary sheet" hold?

Ryle · Oct 31, 2006

Okay, does anyone realize what it takes to run an arena???

The city/county(actually JPA) is going to own the building and the Maloofs will pay rent of about 3 million per year for 30 years. In turn they will have to run the building which includes all insurance salaries, etc..... and make some type of a profit in order to keep the business functioning. If arena's were a profitable venture you would probably see people lining up to build them since they are such a cash cow

. Wait, that's not happening????

.

Paul Allen is one of the richest men in the world and the arena that he built went bankrupt....get my drift???

The whole purpose of this is to keep the team in town and also have first class facilities to attract entertainment(instead of them going to Fresno and the Bay Area). I don't blame the Maloofs for making some type of demands about parking/size, etc... since they are the ones who will be on the hook for the lease payments.....Kind of like someone who buys a house, plops 0% down for a 30 year mortgage without ever seeing what they are making payments on.

I for one think this arena will be built on the land next to Arco Arena and it won't be down town.

VF21 · Oct 31, 2006

I'm thinking it's probably more and more likely you're right, Ryle. The land next to Arco is a much better place for the Maloofs - and I honestly like the idea of having plenty of places to park and not having to battle downtown traffic when I come down to attend a game.

I thought the railyard proposal had possibilities but until/unless the developer actually gets possession of the land it seems really premature to start arguing about how many parking places the arena facility will have IF it's built on land the developer doesn't even own yet.

The Maloofs have said if this proposal fails they'll go back to the drawing board to explore other ways to get a new arena. I believe them.

People who are not willing to allow the Maloofs to actually expect to have a say in what they're getting for the next 30 years aren't really arguing about the arena. They're arguing about the "giving money to the billionaire Maloofs" regardless of how they may choose to phrase it.

I expect our owners to at least hope they can occasionally break even. The idea that anything that benefits them is wrong is just misguided, IMHO.

VF21 · Oct 31, 2006

rhythmless said:

What they agreed to was the basis for more negotiations. A "preliminary sheet" holds no weight whatsoever, especially since the terms stated a MOU would be in place by Oct. 6. It wasn't, so neither side is actually bound to anything they might have said to the other.

Arena Skeptic · Oct 31, 2006

VF21 said:

The Maloofs demanded the right to lower the rent if they felt the arena was not up to standards. We have a right to know that before we vote.

The City tried to throw in an extra $45 million for parking, but the advisory measure reads that no more than 50% of the new tax will go to the arena. We have a right to know where that $45 million will come from before we vote.

The Maloofs want to sell signage rights in the plaza outside the arena (I'm thinking this would look like ESPN-Town, or whatever the heck they call those things That'd be worth MILLIONS to the Maloofs, EVERY YEAR, and would more than cover their lease payments). We have a right to know that before we vote.

Do you really, REALLY need more examples of what we needed to know before Nov 7? Just let me know; I am certain I can find another 1 or 15 things for you.

I really think the Maloofs just want to move the team, and they're looking for someone else to be the bad guys in the black hats. They found 'em: The Council. What do they care if my former high school "buddy", Rob Fong, loses his job? They don't. So, fine: The Council is now the bad guys. Recall 'em all!

Mission accomplished. They get to leave. Who will blame them when they do?

Please, VF, think about what you're saying. The Maloofs can lower their lease unilaterally, and you don't think we have the right to know that?

Really? I refuse to believe you'd allow someone to move into a rental house you own, and then have them start writing you $750 checks instead of $1,500 checks because you don't have granite countertops. You'd evict them; you'd never write such a contract.

Wouldn't you?

VF21 · Oct 31, 2006

You're still misrepresenting the situation.

I'll try and use your scenario.

I meet someone who's going to build a home. He doesn't own the land yet, but he's negotiating for it. I need a house, but it has to be a certain kind of house. I have some very specific needs and in informal discussions he indicates that he understands. We meet several times and discuss the various needs but we do not make any kind of formal agreement.

We send some papers back and forth, with various proposals on them. He wants me to have a much smaller area for my house, I say no, that won't be acceptable. I make some other comments about things I think I need. He responds again, increasing my space and addressing some of my concerns.

This goes on and on for quite a while but we still don't have an agreement we both feel comfortable with. As part of the negotiations at some point, I propose that I be allowed to lower the rent if the final building doesn't meet all my needs completely.

THAT is where the talks between the city/county and the Maloofs are. NEITHER side has a proposal they feel comfortable with.

I've said it before and you keep ignoring it.

•There are reasons to vote NO. But basing your vote on ongoing points of negotation is just silly.

•This is business being conducted by elected officials. Those officials are ceded the duty and responsibility for negotiating these types of deals. Every point of a negotiation is not for public vote.

If you really think the Maloofs want to move the team, then fine. That's your right. You apparently have very little respect for them as human beings, businessmen or team owners. Cool. Don't expect me to buy into your little scenario.

These ballot measures should never have been put on the ballot without some of these things finalized. By doing so, the county has opened a can of worms that may well hamper further negotiations not only with the Kings, but with other large corporate entities who may want to locate in Sacramento County. Why? Because of groups like the HJTA that has forgotten their original reason for being and is now trying to formulate policy rather than simply protecting taxpayer rights. This might not bode very well for the future if large corporations believe their confidential negotiations might, at some point, be made public via some ridiculous ruling on what the public needs to know.

This whole scenario has not helped ANYONE in Sacramento, IMHO, with the possible exception of a few people to whom the only thing matters is that the "Maloofs don't win."

JB_kings · Oct 31, 2006

Those taking joy in heaping more dirt on this have about one more week to enjoy this. Then the silence will be deafening.
I wonder how many will follow up on all the idealist items they've been spouting as more important issues? Again, the silence.
How can you tell who won and what did they win?

kennadog · Oct 31, 2006

Nothing was gained from this whatsoever. People want to vote no becasue there were no detials and no deal. So now they want to vote no, becasue there is no details, because their is no deal?

ArenaSkeptic: Tell me you were actually considering voting for this, before any of these documents were realeased? And if you say these details are important, please explain how, since the city and county never agreed to any of it? As a matter of fact, from public statements it was pretty clear the Maloofs counter offer was dead on arrival.

jeffjcalweb · Oct 31, 2006

i'm scared ... i fully agree & support VF21. there is no reason, no "RIGHT" that you, a voter, needs to have any clue what possible negotiations went on between the Maloofs & Sac.

what you have every right and expecation to have is 100% disclosure and understanding on what was AGREED on and is in WRITING. that is what you would want to know - the details of how much, when, where, what will it look like, who is responsible for what.

certainly you can vote however you want based on whatever you want. but let's not distort what happens in negotations for determing on what is really legally binding.

negotiations are about getting the best deal you can for your side, while giving up as little as possible but making the other side feel they got the better part of the bargain. i would fully expect (heck, demand) that the city use the exact same approach for their negotiations....

SacTownKid · Oct 31, 2006

VF is right. It's pretty stupid to release an insiginificant document that wasn't agreed on.

ShatteredVision · Oct 31, 2006

Seems like the Bee is just digging through the garbage, not to say they don't do that already...

fansinceday1 · Nov 1, 2006

I was on the "why should they release ANYTHING if they are still negotiating" side. However after I really thought about it it really didnt make any sense. How can you put something that is still being negotiated up for a vote?

Since we are being asked to vote on this new arena, ANYTHING that relates to it should be on the table. They should have hammered out everything BEFORE they put it on the ballot. Just because they are doing everything backwards is not the publics fault.

How are we going to find anyone to negotiate with the maloofs after this debacle? The politicians that have stepped forward have been skewered by the maloofs and the media as being bumbling fools. It turns out that it might not be as we all thought. Who in their right mind would step up to take on this arena issue?

fnordius · Nov 1, 2006

Arena Skeptic said:

When the city retains control over the design of the building, how else could it possibly be?

Would you commit scores of millions of dollars to a palace, when the terms of the agreement allowed the other party to build an outhouse instead, and still charge you the same? Only a total idiot could agree to something like that. In this case it's moot, the whole thing is meaningless since there was no formal agreement by the deadline. So all we learn is that someone insisted on a concession from the Maloofs which was kind of dumb. The city and county shouldn't particularly care what the inside is like, and shouldn't worry about the outside except to make sure that it's not some eyesore, or totally clashes with the surroundings. That could have been the subject of some simple guidelines and an arbitration clause, and more significant and appropriate concessions obtained in other areas.

But again, it's all moot, the only thing that piece of paper is good for is to show where there's room for improvement when they restart the negotiation process.

fnordius · Nov 1, 2006

Arena Skeptic said:

Please make up your mind. Is he your buddy and a hapless scapegoat, or is he an incompetent who ought to be replaced?

VF21 · Nov 1, 2006

fansinceday1 said:

That is the real question. What they were hoping for was an accord by Oct. 6 that would make it clear what the deal between the Maloofs and the city/county would be AND the deal between the city/county and the developer. Remember, the developer doesn't even own the land yet.

That's not true. The main reason not to vote to approve Q & R is that there is no agreement in place. The information in proposals that were NOT agreed to are totally and completely irrelevant and more than misleading.

The Maloofs haven't done the skewering. It's been the media. The Maloofs would have continued, I believe, to negotiate even after walking away from the table (which is a fairly standard ploy, by the way) if every point of possible discussion wasn't blown out of all proportion by the media.

Businesses and local governments conduct sensitive neogotiations out of the public eye all the time, as has been pointed out several times before. People elect others to represent their interests and to conduct the daily business of running government. It's not up to the public to provide input every single step of the way. If it was, nothing would ever be accomplished.

The Howard Jarvis Taxpayer Assoc. hasn't done anyone any favors by forcing this issue.

kupman · Nov 1, 2006

Things just continue to get worse. As if Q&R getting obliterated on Nov. 7th was not bad enough, now the Maloofs have dug themselves into a deeper hole. The perception of our owners continues to decline each passing day.

The Maloofs would like stay in Sacramento? Well, then they should start acting like it.

They could contribute money to the campaign. They could say something different than "maybe we will not build they arena in the railyards," when launching the campaign. They could negotiate in good faith. They could stop negotiating for arena details that are way out of the norm for professional sports. They could stop going on the radio and accusing public officials of negotiating in bad faith with zero evidence. They could stop putting themselves into commercials that glorifies their wealth less than 1 month before the vote. (I have a sense of humor - others do not).

Joe and Gavin clearly do not want Q&R to pass. The deal is clearly not good enough for them. A state of the art arena priced at 1/2 billion dollars, with a low yearly rent and all the revenue from events and parking is just not good enough for them. This saddens me because the chances of this community offering a better deal is very, very low - especially now that their public persona has been further tarnished.

VF21 · Nov 1, 2006

What are you talking about?

The Maloofs haven't done anything to indicate they want to move. They have, on the other hand, refused to continue to discuss a deal that clearly is headed nowhere.

Why should they contribute money to this campaign? Q & R are fatally flawed because of the lack of any agreement between the city/county and the Maloofs.

Sorry, but their persona isn't the one that's been tarnished by this - unless you're looking through HJTA-tinted glasses.

This is one of those things that started out sounding good but went bad. There are a variety of reasons and I hope those involved learned from the experience.

You still sound as though you think the Maloofs should bite the bullet and just be grateful for ANY offer the city/county comes up with. That's just not so. They are businessmen. They have a right to expect to make some kind of profit off their business. And they also have the right to negotiate the best deal possible, as does the city/county.

My perception of the Maloofs has not declined one bit. MY perception of the Howard Jarvis Taxpayer Assoc., however, and those who lept upon this like a starving dog on a bone has declined...a lot.

kennadog · Nov 1, 2006

fansinceday1 said:

And there's the reason to vote no. You didn't need anything released to make that decision. We already knew there was no deal in place.

Yep, they did it backwards. I think they were hoping this would work out, because a public vote, if required, will now have to wait another two years.

kupman · Nov 1, 2006

VF21 said:

I do not expect that Maloofs to just bite the bullet and I realize that they are businessmen.

However, most businessmen do not ask the public to subsidize their business because they cannot turn a profit on their own. How many times are you going to listen to "we need this or we do not turn a profit," before you say either 1) B.S. or 2) I am sorry about that, but we have given you all that we can or are willing.

Your perception the Maloofs may not have changed, but I am betting that the general public perception of the Maloofs has deteriorated since July because of their actions (or lack of actions).

The Maloofs keep asking for more concessions and you keep backing them up, but do you think for a second that the citizens of Sacramento would pass a measure that grants the Maloofs their current wishes?

VF21 · Nov 1, 2006

It doesn't matter what I think, but for the record I think the Maloofs have been done a HUGE disservice by short-sighted people who either can't see the benefits of a new arena for the entire area or just can't stand the idea of the Maloofs actually being able to operate in the black (which most likely still will be very difficult).

This is all dissolving into the old argument about whether a city needs a professional sports franchise and what they're willing to pay to have one. There are a lot more cities than franchises. If we aren't willing to do what it takes to find some common ground with the Maloofs, someone else will...

Then, if they decide to raze Arco when they leave to sell the land, which they have every right to do, Sacramento will have lost more than once. We'll be without a professional franchise, we'll be without an arena AND we'll be without someone willing to sit down and try to find a way to build a new one.

I wonder how the citizens of Sacramento will react to that?

Most likely much like they did AFTER the wrecking ball took the Alhambra Theatre down to mere rubble. It took only two days to competely demolish that grand structure and people have been regretting it ever since. And that was just a movie theater, albeit a grand one that should never have been destroyed.

This is about an entertainment venue. An arena that houses not only two professional teams but also is the sight of a wide variety of different events. People need to look at the big picture and quit buying into the unending drivel coming from people like R.E. Graswich and Dave Jones.

slugking50 · Nov 2, 2006

The Rise Guys mentioned this morning that they attended a meeting by Joe and Gavin at KHTK yesterday. They said Joe and Gavin are VERY much not happy and will be giving their side very soon. Whitey mentioned that Gavin had to stop a few times because it was obvious he was very pissed about the treatment they've recieved, how the city messed up, the Bees coverage and what a crappy deal this was from the start.

Marcos Bretón: Owners pulled old switcheroo

Starter

Bench

Starter

Super Moderator Emeritus

Super Moderator Emeritus

Starter

Starter

Bench

Super Moderator Emeritus

Starter

Starter

Super Moderator Emeritus

Super Moderator Emeritus

Bench

Super Moderator Emeritus

Starter

Dog On It!

G-League

Hall of Famer

Bench

Starter

All-Star

All-Star

Super Moderator Emeritus

Starter

Super Moderator Emeritus

Dog On It!

Starter

Super Moderator Emeritus

All-Star