Mayor Johnson Calls Arena Squabble With Maloofs ‘Very Disappointing’

SACRAMENTO (CBS13) – The celebratory tone Sacramento Mayor Kevin Johnson expressed over the new downtown arena deal about a month ago has drastically changed after the Kings’ owners say they have no intention on paying anything toward predevelopment costs.

Johnson appeared on “Good Day Sacramento” Tuesday morning, and while he said he expects the City Council to approve moving forward with the arena when it votes at its meeting later in the day, he said he was “very disappointed” in the turn of events.

The Maloofs say as tenants in the new railyards arena that the city would own, they shouldn’t be expected to pay the $3.26 million requested of them in the term sheet for predevelopment fees. Arena operator AEG would kick in another $3.26 million and the city’s share is $6.5 for consultant work prior to the actual construction of the sports and entertainment complex. That work is scheduled to start Wednesday pending a yes vote by the City Council on Tuesday.

“I would say this is slightly abnormal,” Johnson said in an interview with Koula Gianulias on the Good Day set Tuesday morning. “Normally, when you have a partnership and an agreement, everyone is celebrating, working together to get to the finish line. When you come out of Orlando (when the sides met during All-Star Weekend to negotiate a deal), the NBA is on board, the city is on board, AEG is on board. For some reason, the Maloofs are not on board. Very disappointing.”

A Los Angeles-based attorney representing the Maloofs issued a statement Monday night explaining the family’s position.

“The Kings saw the term sheet one week before the deadline and the Kings made it very clear to all parties that we are not going to pay predevelopment fees,” Eric W. Rose said. “That is one reason why we have never signed the term sheet.”

At his press conference Tuesday, Johnson called the Maloof’s disingenuous for saying that predevelopment costs were not part of the agreement.

Johnson was asked if it was time for the city to consider its Plan B, a new ownership group. Billionaire Ron Burkle’s name continues to come up, but the Maloofs have repeatedly said they’re not selling the team. The Maloofs have been asked to contribute $73 million toward the arena, but the NBA had to step in to commit to the first $200,000 in predevelopment money after the family refused to pay it.

“I will make a promise that Sacramento will not be caught flat-footed,” Johnson said on “Good Day.” “That’s what we’ve learned. We thought that all the heavy hurdles were behind us and that we were moving forward. The things that they’re saying publicly is one thing; what they’re doing privately is another, and I think Sacramento deserves much better.

He later added at his press conference that “We as a city won’t be jerked around.”

Kings attorney Rose issued another statement after Johnson’s comments on Tuesday, saying in part: “We do not understand Mayor Johnson’s frustration and instead of projecting, we hope that the mayor and city leaders will address the various issues that we have brought to their attention. We need the city to demonstrate to us that they can meet their own timeline of having a new arena built in time for the 2015 basketball season.”

A Maloof attorney sent the city a letter questioning whether the environmental impact review could be completed in time for the 2015 target date. State Senator Darrell Steinberg issued a statement Tuesday saying that such a process is feasible under AB 900, a bill he authored to help speed up the downtown arena construction.

“The Maloofs seem to be looking for every reason not to proceed as opposed to looking for ways to make it work,” he said in his statement. “With the proper mix of mass transit, energy efficiency, and other objectives there is no reason to believe this project couldn’t meet AB 900 requirements.”

George Maloof said last week that the family was still committed to Sacramento but had several unresolved issues with the arena term sheet. CBS13 tried to talk to Joe Maloof at the Kings’ game Monday night but he walked away from our camera.

Johnson said the sides have two weeks to resolve things and expects some decisions to come out of the NBA owners meetings in New York April 12-13.

“By April 17 we have to pay city dollars,” he said. “We’re not going to spend a city dollar until the predevelopment and everything else is resolved. The finish line keeps moving and that’s what’s disappointing to me.”


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