comments

Do Maloofs deserve King-sized blame for squelched Sacto arena deal?

Or is the now-scuttled agreement a logical move for a business in negotiations?
By: Gus Thomson, Journal Staff Writer
-A +A
AUBURN CA - The Maloof family is being pilloried for getting cold feet on a new downtown Sacramento arena deal that had been reverberating positively through the region for weeks. But did the embattled Sacramento Kings ownership cross the entrepreneurial line when they backed away last week from a pact that had been trumpeted as sealed? For state Sen. Ted Gaines, R-Roseville – co-chair of the Thing Big Sacramento regional initiative to build a new entertainment and sports complex – the answer is a definite ‘yes.’ “I’m very upset,” Gaines said. “And I’m shocked the Maloofs would walk out on the deal they had agreed to. To pull a 180 at the last minute, I feel is disingenuous.” But a Sierra College professor of marketing said Monday that while he’s disappointed as a fan, the Maloofs actions appeared to be an allowable – although perhaps misguided – part of their deal-making arsenal. “From a business standpoint, the argument can be made that it (the agreement worked out with the city of Sacramento, the National Basketball Association and arena developer AEG), was never more than a proposal,” said Tom Read of the Rocklin campus. “If you take the emotion out of it, it was non-binding and any of the parties could walk away. Any of the four parties had that right.” Read said that NBA Commissioner David Stern perhaps best summed up the Maloof action when he said that it would have been good to have stated their intent sooner and more clearly. The initial agreement between the Maloofs and the other parties in creating a funding pact to build a new arena and keep the Kings in Sacramento was reached Feb. 27 in Orlando, and approved by the Sacramento City Council March 6. But the Maloofs – owners of the Kings since 1999 – balked at the funding structure, including a plan for the Kings to contribute $3 million in pre-development costs. The family also was holding out for a bigger part in the design of the structure, to be built on a now vacant rail yard north of the downtown. And there were questions about the Maloofs’ willingness to be tenants in the new building rather than owners – which they now are, with the aging Power Balance Pavilion the Kings plays their home games in. Gaines has been involved with the Think Big political and business coalition since last summer, providing regional support to a plan he praises for its ability to fund a new arena without taxpayer money. Instead, city parking lot revenues would pay up to $255 million of the arena’s estimated $391 million cost. Stern said last week that the Kings would pitch in $73 million – but $67 million would come in the form of a loan from the league. The Maloofs backed out last week, stating that they think revenue numbers provided by the city are too optimistic because they are based on 2006 figures. Auburn Mayor Keith Nesbitt has been observing the latest wrangle from afar and hoping regional interests won’t get swept into a growing quagmire of accusations and counter-accusations. Nesbitt said he’s left with the impression that the Maloofs just don’t have the money to join in on the project. “I don’t think the Maloofs are viable and in a position to pay,” Nesbitt said. “I’d love an arena but I don’t think the taxpayer should be paying.” Both Sacramento Mayor Kevin Johnson and George Maloof, representing the family, have said they don’t trust the other side. And Think Big Executive Director Chris Lehane issued a statement comparing the Maloof contention their decision is in the city’s best interests to “getting weight-loss advice from Fat Albert.” For Read, it’s more than the NBA and the Kings staying. He points to the NCAA bypassing Sacramento’s Power Balance Pavilion for regional finals games in March because of its size and condition. Gaines and others have pointed to the possible use of the new arena as a facility at a future Winter Olympics in the region. But those ideas are off the table after the Maloofs pulled the tablecloth out from under them. Read echoed Johnson’s contention that “the ball is now in the Maloof court.” “It’s clearly a public-relations challenge,” Read said.