SACRAMENTO (CBS13) – City leaders may be preparing for a fight with the owners of the Sacramento Kings over millions of dollars still owed as part of the team’s financing deal with the community. However, the Maloofs tells CBS13, it is a “non-issue”.
A letter from Sacramento City Hall asked Anaheim city leaders to stop negotiating with the Maloofs and refrain from authorizing $75 million in lease revenue bonds, citing the possibility of “irreparable harm to the City of Sacramento” and concerns over reclaiming the $77 million that the Kings still owe the city.
“In this economic climate, the City of Sacramento, like most if not all cities in California, has slashed its budget–even cutting critical services to make ends meet,” wrote assistant city manager John Dangberg.
The letter cuts to the heart of new worries that the Kings owners could walk away from the millions of dollars and leave Sacramento a devalued arena if they default.
On Tuesday, Joe Maloof released a statement to CBS13 saying “Quite frankly, this is a non-issue. We’ve always paid our financial obligations in the past, we’re going to do it in the present and we’re going to do it in the future. Whatever the future holds to ensure the long-term viability of the team, the City of Sacramento will be paid in full.”
Public documents show the Maloofs are trying to dramatically lower the value of Power Balance Pavilion and the surrounding Natomas property. An appeal filed with Sacramento County shows the land is currently valued at $57 million and asks for the property to be valued at $28 million.
The arena is part of the Maloofs collateral with Sacramento if they default on the deal made in 1997.
City leaders are expected to hire more private lawyers Tuesday to ensure the team doesn’t leave town without paying the remaining loan balance.