In 12 seasons as a point guard in the NBA, Kevin Johnson averaged 9.1 assists per game. Even though he’s 13 years removed from his last game in a Phoenix Suns uniform, KJ has shown throughout this drive to keep the Kings that he can still run the point and dish out dimes like he was 26, not 46. KJ deserves credit for putting together the coalition of civic and business leaders, outside big money private equity investors (whales), and his owners of other teams that he has been lobbying to Sacramento’s cause.
That’s not to say that KJ has complete control of the situation. He still faces a formidable bid from a Seattle group that has already done the paperwork necessary to buy the team from the Maloof family. All KJ can do as mayor is to put together the best possible presentation and the most credible group to represent Sacramento. Everything else falls to the NBA and David Stern to decide.
During Thursday’s State of the City address, KJ finally revealed the names of the equity partners, along with other details important to the Sacramento bid. Let’s dispense with that information quickly:
- Mark Mastrov will head the group attempting to buy the club.
- Ron Burkle will head the group looking to build a new downtown arena.
- The site being considered is Downtown Plaza, where a mall is currently located.
- The city and the NBA still expects the arena to be a public-private partnership.
- The previously divulged 20 local business leaders looking to invest $1 million apiece for a share of the team are all going in on the 7% minority share currently tied up in bankruptcy court.
- Former Kings great Mitch Richmond is one of the group of 20.
- The bid will also attempt to bring back the Sacramento Monarchs WNBA franchise, which folded in 2009 as the Maloof family started to go into the red.
- The city intends to get its $75 million loan paid in full, and redevelop the Natomas area (where Sleep Train Pavilion is located) as part of a long range plan.
- The city will put together a deal that involves no new taxes and has no negative impact on the general fund.
While the presence of Mastrov and Burkle were the worst-kept secret of the whole affair, the structure of their relationship to the deal is a surprise. The thought going in was that they might go in together on the team and arena. Instead, by splitting the tasks, it allows the two alpha dogs to bring in their own people for the part they’re most interested in. Mastrov could revive the group that he put together to bid on the Warriors for $420 million in 2010. The fact that Mastrov’s group made it to the final round of bidding should show to the owners and Stern that they can be comfortable with Mastrov. In addition, if Mastrov is bidding on 50-65% of the team as Hansen-Ballmer were doing, the group’s outlay should be less than what they offered for the W’s, along the lines of $300 million is my guess. Mastrov had this to say about his bid:
“This is about building a winning franchise for a winning community. Sacramento has proven time and time again to be a great NBA market. As a longtime resident of Northern California with deep ties to Sacramento, I am thrilled to be a part of an effort to do something special for the region.”
Burkle gets to bring in his friends at AEG to work on the arena project. This would be synergistic with a rumored bid for AEG by Burkle. The AEG sale is still up in the air as offers are not coming close to the $8 billion that Phil Anschutz is seeking. As of today, those monitoring the AEG horserace have real estate investment giant Colony Capital in the lead. The structure also allows one degree of separation between Burkle and the Maloofs, who aren’t exactly buddies after Burkle helped block the Maloofs’ attempt to move the Kings to Anaheim a year ago. Burkle had his own quote about the news:
“I am excited about the economic possibilities for the arena and for downtown Sacramento as a whole. We have an opportunity to transform downtown into a vibrant hub of economic and cultural activity that will create jobs and generate a positive economic impact for years to come.”
Downtown Plaza has languished for some time, and calls for a serious revamping regardless of whether or not there’s an arena. Interestingly, one of the tenants is a 24 Hour Fitness center that only opened in 2011 (update: reopened after closing). It’s one of thirteen in the Sacramento region and the only one anywhere near downtown. I would imagine that even with an arena, the 24 Hour Fitness location would be preserved at Mastrov’s behest, perhaps even expanded to include a new Kings practice facility. It also seems likely that Macy’s would stay put, at least the main (women’s) store on one of the six blocks that make up Downtown Plaza. One complicating factor is that there are 3,700 parking spaces underneath the mall. While those spaces would be extremely helpful for arena infrastructure, the NBA apparently doesn’t want parking directly underneath an arena, so those spaces will have to go. That could create a big sticking point when EIR time rolls around, since something will be needed to backfill the lost capacity. Knowing a little about the layout, the plan that would make the most sense would be to demolish the center of the mall, build the arena there, then continue to use the 24 Hour Fitness, multiplex, Macy’s, and food court, while buying additional property on the fringes to build parking garages and additional commercial space.
Will all of this be enough? Based on history, the odds remain stacked against Sacramento. At least the city and KJ are putting the best deal possible in front of the NBA. KJ even sounded highly magnanimous in his address, as he took time to thank the Maloofs for their contributions to the region over the years. He didn’t have to do that as the Maloofs are already one foot out the door. But he did, and it showed the kind of diplomacy and class one would expect of a prominent leader. In his time in the Association, KJ learned a thing or two about working the refs. It works. That’s a stark contrast from Wednesday’s SotC speech by Oakland Mayor Jean Quan, which contained yet another minor snipe at Lew Wolff (she described her meeting with Wolff as “a tough day” in line with the more difficult moments of Occupy movement). One of the frequent refrains I hear from the Oakland-only crowd is, “You can lead a horse to water but you can’t make him drink.” That’s fair. How about another popular adage, “You catch more flies with honey than with vinegar.” You want to rise above? How about rising above the fray? Food for thought, Oakland.
Update 2:30 PM – Sacramento reporter and occasional River Cats fill-in play-by-play man Rob McAllister reports that AEG is not involved with Burkle on the arena side.
Dangberg says AEG not involved this time around as equity partner for arena. Could come later if Burkle/Mastrov want AEG to operate arena
— Rob McAllister (@Rob_McAllister) March 1, 2013