For the first time in the latest effort to keep the Kings, the Sacramento City Council has opened its checkbook and dispatched top city officials to enter into formal negotiations over the financing of a new downtown sports arena.
The council voted 7-2 on Tuesday night to grant its approval of City Manager John Shirey’s request to negotiate the terms of a new arena plan that is seen as a key element of the city’s work to block a Kings move to Seattle.
In doing so, the council allowed Shirey to spend $150,000 on attorneys and arena financing consultants.
While city officials have declined to name the investors they plan to negotiate with, it is widely known that Mayor Kevin Johnson is recruiting 24-Hour Fitness founder Mark Mastrov and Southern California billionaire Ron Burkle to make a bid for the Kings.
That bid would be presented to the NBA as a competing offer to the deal the Kings owners have to sell the franchise to a group seeking to move the team to Seattle. The NBA’s Board of Governors will rule on the Seattle bid at its mid-April meeting.
Kings co-owners Joe and Gavin Maloof have agreed to sell their 65 percent interest to a Seattle group headed by hedge-fund investor Chris Hansen and Microsoft CEO Steve Ballmer.
The potential new owners have filed documents to relocate the team to Seattle in time for the 2013-14 season. However, the NBA owners must approve all sales and franchise relocations, and commissioner David Stern has said that Sacramento will be given an opportunity to produce a competitive offer.
Shirey said he would attempt to bring a financing term sheet to the City Council by mid-April – a time line he described as ambitious.
“Nothing gets approved until this City Council approves a preliminary term sheet and gives us the authority to proceed further,” Shirey said.
Most council members said they were comfortable allowing Shirey to work on that term sheet, knowing they will have final say over whether the plan is accepted.
“We don’t have all the facts yet, we don’t have all the tools we need to make a proper analysis,” said councilman Steve Hansen. “We’re at the beginning of this process.”
MINORITY OWNER TO USE RIGHT OF FIRST REFUSAL?
According to KTXL Fox Sports director Jim Crandell, Kings minority owner John Kehriotis plans to exercise a right of first refusal and is heading a group that is close to offering a competing bid to purchase the franchise and build a new sports and entertainment complex that does not require city/county subsidy.
On his 10 p.m. Monday night broadcast in Sacramento, Crandell said Kehriotis, who owns 12 percent of the Kings, has secured a $350 million commitment from investors and a verbal agreement for another $400 million.
The information was attributed to an anonymous source.
Reached at his Bay Area home, Kehriotis offered a succinct, “No comment at this time.”