Johnson: Differences In Arena Deal Are 'Irreconcilable'

SACRAMENTO (CBS13) - Sacramento Mayor Kevin Johnson emerged from a meeting with the Kings' owners on Friday and said the downtown arena deal is off again.

Johnson said the differences between the and the Maloofs are "irreconcilable." He said "it became very clear that the differences became too far to overcome. This deal is not happening as we know it. We know this door is closed. I'm disappointed for Sacramento."

The announcement comes after two days of three-hour meetings with Kings officials, including at least George Maloof, at City Hall.

George Maloof spoke to CBS13's Ben Sosenko over the phone and said, "We felt it was a tough deal for the franchise and for the city. We negotiated in good faith. We tried, we tried and we tried, and we're willing to try again. We never give up."

Maloof said that the family is not thinking about moving. The Kings will play at Power Balance Pavilion at least one more season after the team didn't file for a relocation request by the March deadline. Last season, the Maloofs flirted with moving the team to Anaheim but NBA Commissioner David Stern convinced the family to give Sacramento one year to try to get an arena plan together.

WATCH: Mayor Kevin Johnson Press Conference

The city did that by saying it would fund its arena contribution by leasing out its parking garages to a private company. Stern has praised the city for "doing everything it could" to keep the team in Sacramento.

The Maloofs issued a statement after the meeting saying: "This morning, at Mayor Kevin Johnson's request, the mayor and representatives of the Kings met for a second day of informal talks at City Hall and could not reach an agreement. At this time no further meetings with the city are scheduled.

"The Kings will continue the operations of the organization and building on the franchise's young nucleus of players."

Johnson had declared the arena deal dead in New York City during the NBA Board of Governors meetings two weeks ago after the Maloofs presented a presentation to other NBA owners expressing their concerns with the deal, but the two sides started talking again recently, including a meeting between Johnson and George Maloof in Las Vegas last Friday.

It's been a tumultuous several weeks. The framework of a deal for the $391 million sports and entertainment complex was announced during NBA All-Star weekend in Orlando after talks between the city, the NBA and the Maloofs, but the first signs of the deal falling apart came earlier this month when the Maloofs balked at paying their share of predevelopment costs, $3.26 million. They have also said they doubted the revenue projections of the deal.

The proposed deal called for the city to pony up $255 million, the Maloofs $73 million and arena operator AEG $58 million. Stern revealed in New York that the league was prepared to loan the Maloofs $67 million and contribute another $7 million of its own money toward the arena.

Johnson said Friday the city will continue to look at the viability of building the arena in the downtown railyards without the Kings as the anchor tenant.

"We have to put ourselves in the driver's seat and do everything we can with what we can control," he said.

The news comes a day after City Manager John Shirey said Sacramento would have to lay off more than 100 police and firefighters and 81 other staffers to balance its $18 million budget deficit unless those employees agreed to start contributing all of their share of retirement contributions.

"It's not a good deal for the city, it's not," George Maloof said on Grant Napear's radio show on 1140 The Fan. "Why talk about an arena when you're talking about people's' lives. How much sense does that make?"

He said he wouldn't rule out negotiating in the future but for now the team will focus on basketball, which includes the draft in June, where the Kings will again be in the lottery. He also cited the city's budget problems and said perhaps the timing wasn't right to take on a $400 million project.

"I think everybody should just take a break from it," he said. "I think we're ready to focus on basketball."