SACRAMENTO STANDOFF
New arena plans have capital deeply divided
Tom FitzGerald, Chronicle Staff Writer
Friday, April 1, 2005
Sacramento --
New arenas continue to pop up in NBA cities around the country. They
are full of what pro sports people like to call "amenities'' -- snazzy bars
and restaurants, state-of-the-art scoreboards with high-resolution video
screens, corporate suites and luxurious locker rooms worthy of the millionaire
ballplayers they house.
The Memphis Grizzlies and New Orleans Hornets moved from Vancouver and
Charlotte, N.C., to arenas that were financed completely by public largesse.
Charlotte, in turn, landed the expansion Bobcats with an arena that will open
in October. Its $265 million cost was paid in part by $100 million from local
financial institutions, $23 million in up-front lease payments by the club,
and the rest from taxes on hotels and rental cars.
Even Kansas City, which lost the Kings to Sacramento in 1985, is building
a $250 million downtown arena, largely with hotel and rental car taxes. The
city is operating on the premise: If we build it, NBA Commissioner David Stern
will come.
Meanwhile, in trying to replace antiquated ARCO Arena, Sacramento is
shooting nothing but airballs.
The Kings want somebody to show them the money, but Sacramentans have
made it clear that tax money won't be involved. Two plans to build a publicly-
funded arena downtown never made it to a ballot. A third try, by landowners in
the North Natomas area near ARCO, looks doomed, too. Their plan would have
funded an arena in return for getting their land rezoned for residential
development more rapidly.
"I think it's dead,'' Kings co-owner Joe Maloof said. "We appreciated
them trying."
Maloof and brother Gavin -- the family owns 54 percent of the Kings --
have a management style similar to that of Dallas Mavericks owner Mark Cuban.
They are not only service-first bosses but highly visible cheerleaders,
lacking only Cuban's cloying self-promotion.
On the other hand, while the Maloofs are circumspect when it comes to
committing much of their own money to the arena project, Cuban and the owners
of the NHL's Dallas Stars put up the lion's share of the money for the $400
million American Airlines Center, completed in 2001. The city of Dallas
provided just $125 million, again mostly from hotel and rental car taxes. The
high-tech arena has 144 luxury suites, all of them sold on a season basis.
ARCO Arena, built in 1988, has just 30 luxury suites. Its seating
capacity of 17,317 is fourth smallest in the NBA. The seats rest on uncovered
plywood. The concourses are too narrow to accommodate the crowds. And, Joe
Maloof pointed out, "We get roof leaks all the time."
What makes the arena saga strange is that Sacramento and the Kings are
one of the great love affairs in the increasingly rancorous world of pro
sports. Although their one real window of opportunity for an NBA title closed
three years ago -- on a buzzer-beating 3-point shot by Robert Horry of the
Los Angeles Lakers in Game 4 of the Western Conference finals -- they have
sold out ARCO for 263 straight games despite having some of the highest ticket
prices in the NBA.
Though on track for their seventh straight playoff appearance, the Kings
have gone through a rough patch since trading Chris Webber, 32, a great but
often gimpy player whose career seems on the descent, to Philadelphia a month
ago. But the boos at ARCO are generally reserved for the visitors and refs, as
when beloved guard Mike Bibby was ejected in the closing seconds of a recent
loss to the Warriors.
All that good will for Sacramento's only major-league team hasn't
translated to much political and economic support for a new arena.
Environmentalists complain that much of the land in the latest arena
scheme rests on a flood plain and would require major drainage facilities. It
also is considered habitat for 122 protected species, mainly the Swainson's
hawk and the giant garter snake.
"There's a sky-is-falling mentality that they'll leave if we don't
provide an arena for the Maloofs,'' said Vicki Lee, head of the local chapter
of the Sierra Club. "Why should they, if they can get the leadership of
Sacramento to be gullible enough to open areas that don't have public
infrastructure, that are part of a habitat conservation plan? It's like none
of that matters. We'll skim enough money off the top, and the millionaire
Maloofs won't have to pay off."
"These landowners just wanted to get on the fast track for urban
development,'' said Jim Pachl, attorney for the group Friends of the
Swainson's Hawk. "Gee, if these guys are willing to give up 20 percent of
their profits, they must know they're going to have some real problems getting
through the normal governmental processes. The whole purpose was to railroad
entitlements that would be controversial.''
All this political and economic wrangling has players feeling the strain,
as well.
"I'm hoping they're going to find a solution,'' the Kings' leading scorer,
forward Peja Stojakovic, said. "This city and these people deserve a
professional team. We enjoy being here and playing basketball. They've been
loyal to us, and we've been loyal to them. It's a great relationship.''
Within a few years, though, that loyalty could be put to the test if an
arena plan isn't forthcoming.
"I never anticipated we'd have the kind of delays we've had,'' Joe Maloof
said. "It's been tough. I don't know what it's going to take."
Would the Kings consider leaving a city that holds them in its warm
embrace, a metropolitan area that has 2.1 million residents and is adding 50,
000 every year?
"We're not considering that,'' Maloof said. "We've never talked about
something like that. Our game plan is to put something in Sacramento. We've
just got to get something done here.''
Others wonder.
When the latest arena idea foundered, the Sacramento Bee stated,
"Predictions that the Kings will leave town are swirling. Speculation has been
running rampant, with cities such as San Jose, Anaheim, Kansas City and Las
Vegas all bandied about as possible destinations."
"They may be history unless something changes,'' former city councilman
Jimmie Yee told The Chronicle. But he added, "I'm not saying they're leaving.
I don't know where they'd go that would give them the same support that the
Kings have here.''
Like Yee, city councilman Steve Cohn has been pushing for a new arena. He
insists the North Natomas land development plan is still alive. "Any time
you've got a group willing to put $200 million on the table," he said, "that's
a good starting point.''
The group originally had sought a ballot measure that would have
expedited development of 9,000 acres of farmland into residential areas.
Insiders say such a deal could cut the time of getting the development through
the bureaucratic process from 10 years to five. More than 40,000 homes could
be built on the land, and estimates on the potential payoff range from $2
billion to $5 billion.
In return, the landowners were going to divert about 20 percent of the
expected proceeds, up to a ceiling of $275 million, to build an arena and
create a $25 million endowment fund for the arts and youth sports. The Kings
would kick in the rest, then keep all the new arena's revenues, and everybody
would be happy.
The wheels came off the plan in January when some of the property owners,
led by former Congressman Doug Ose, pulled out and took their 2,000 acres with
them.
"Our estimates left us $80-90 million short of our $300 million goal,''
said Steve Thurtle, a member of the landowners' group. "We think it's a good
idea, but we've exhausted our efforts.''
Just how much an arena would -- or should -- cost is debatable. The
Kings want a $400 million facility, citing the higher costs of construction in
California. Thurtle, Cohn and others think a $300 million home would be more
reasonable, given the price tags of arenas in Memphis ($250 million),
Charlotte ($265 million) and Kansas City ($250 million).
Those cities, however, don't operate under tax restrictions like
California's Proposition 13. Also, labor costs are higher here, and Kings part-
owner Bob Hernreich said, "The cost of steel has gone up 50 percent in the
last year and a half.''
"Our problem,'' Cohn said, "is we don't have the level of corporate
sponsorship you have in the Bay Area.''
Some of the deepest pockets in Sacramento belong to the Maloofs. The
family recently announced it would spend $600 million to expand its Palms
Casino Hotel in Las Vegas with a 40-story tower housing 347 hotel rooms and a
50-story tower with 599 luxury condos. The Maloofs were immediately criticized
in Sacramento for refusing to build an arena with their own money or, at the
least, to make up for the shortfall from the North Natomas plan. The Palms is
highly profitable, while the ARCO/Kings operation barely makes money.
More to the point, most cities realize that in order to attract NBA
franchises or keep them from leaving, publicly-funded arenas are standard
procedure.
"Industry wide, roughly 20 percent of arena costs are paid for by the
team, either in cash or debt service,'' Thurtle said. "The Kings are not the
villain here.''
But even among people who love the Kings the most, it's far from
unanimous that a new arena is needed. At a recent game, Chuck Arana, a 37-year-
old fan, said he hopes ARCO is never replaced.
"You get a good view from wherever you're at in the arena,'' he said.
"Everybody's happy when they come here. (In a new arena) you're just going to
have a bunch of luxury boxes and people who don't care about the game, more
business people who just come once in a while rather than people who come to
every game.''
