I remember reading last year that the city gets a 7% (I think) stake in the team if they move. Where does this 7% come from?
Not exactly. If the Maloofs default on the terms of the city loan/lease, the city could foreclose and get ownership of the collateral for the loan. The collateral the city holds is the arena land and all improvements on it, plus a $25 million stake in the team ownership.
Technically the loan/lease terms require immediate repayment of the loan, if the team leaves Sacramento. That is the outstanding principal, interest due, plus a prepayment penalty. The Hansen offer to buy supposedly includes the pay of of the city loan. Payoff would be much better for the city than having to initiate legal proceedings to collect.
If a local buyer gets the team, they are not required to payoff the city loan immediately. They would just assume the city loan and continue making the lease payments. If a new buyer keeps the team in Sacramento, I would think they would assume the loan, but likely it would be refinanced by the city as part of an arena deal, because it would lower the annual payments a lot due to re-amortization of a lower principal amount (spreading payments over a new 30-year term) and much lower interest rates available right now compared to the interest rate on the current loan.
Of course, even a local buyer could just choose to pay it off, but city financing almost always has more favorable terms than borrowing from a private commercial lender. And they can write-off the interest portion of their payments as an expense. Another plus from the owner's perspective. It reduces taxable income. And for quite a while their payments would be almost all interest payment.