Financing plan for Sacramento Kings is approved

Sacramento —  Sacramento’s City Council on Tuesday approved a financing plan for the Kings NBA franchise, clearing the way for construction on a $477 million downtown arena.

The council voted 7-2 on the package during a meeting that caps off the city’s lengthy struggle to keep the team from moving to Seattle a year ago. Mayor Kevin Johnson declared “Long live the Kings” after the final vote, and the chamber erupted in cheers along with team owners.

“We had our backs against the wall, but we defied the odds. We made a comeback for the ages and in doing so, I feel like we unleashed the very best that Sacramento has to offer,” said Johnson, a former three-time NBA All-Star who maintains strong connections to the league.

Under the 35-year deal, the city would be responsible for a $223 million subsidy, much of it financed through a parking revenue bond. The city would pay an estimated $21.9 million a year in debt service that would be paid through lease payments from the Kings and a projected increase in parking revenue.

The city also is transferring $32 million worth of land and allowing the team to operate six digital billboards.

In return, the Kings would contribute $254 million to construct the arena and develop surrounding land with a hotel, office tower and shopping.

Construction on the crown-shaped sports facility will break ground this summer and open in time for the 2016-17 season.

At the start of the council meeting, Kings President Chris Granger called it a historic day for the team and Sacramento region, saying the arena would serve as a hub for economic development. The project would bring 11,000 construction jobs and 4,000 permanent jobs, he said.

“This is certainly bigger than basketball,” Granger said. “But it doesn’t just end there. At the very core, this project is about community.”

The NBA had told the city that it must open the arena by 2017 or risk losing the Kings. Former Kings owners George, Joe and Gavin Maloof considered moving the team to Las Vegas, Anaheim and Virginia Beach, Virginia, until announcing an agreement that called for investor Chris Hansen to buy the team and move it to Seattle.

Johnson led the city in a fight to keep the Kings and got the City Council to approve a plan for a new arena. The Maloofs then sold the Kings to a group led by TIBCO Software Chairman Vivek Ranadive.

The council approved a financing plan that allows for construction on the new sports and entertainment complex to replace an aging shopping mall a few blocks from the Capitol. The Kings have played in Sacramento since 1985 and currently play in the 26-year-old Sleep Train Arena, in the city’s north end.

Scott VandenBerg, general manager of the Hyatt Regency Sacramento and chairman of the board of the Sacramento Convention and Visitors Bureau, told the council that the arena will support new and existing businesses by expanding tourism.

“Just the speculation that an entertainment and sports complex was going to be approved has already helped improve the health of our downtown core,” VandenBerg said.

Council members who opposed the deal said that the project’s economic benefits are overstated and fear the city isn’t getting enough from a public subsidy. Councilman Darrell Fong said the arena adds too much debt.

“I know my vote won’t stop this deal,” Fong said. “Believe me, I hope I’m proven wrong.”

A majority, however, hailed Tuesday as a pivotal moment for elevating the city’s reputation.

“It’s not just about a venue for entertainment and sports; it’s about the type of life that people get to have when they choose to live in our region,” said Councilwoman Angelique Ashby.

Critics unsuccessfully tried to block the city’s subsidy with a petition drive that failed to qualify for the ballot. Opponents including Patrick Soluri, a Sacramento attorney, vowed to continue to fight.

“The mayor and City Council no longer represent the interests of ordinary citizens,” Soluri told the council. “Cronyism is running rampant, subsidies for the super-wealthy are handed out at the expense of working-class people and basic municipal services.” Before the vote, the team sponsored a rally outside City Hall to show support for the project, drawing hundreds of fans, many of them dressed in purple, the team’s color.