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Stern: Arena Deal is Dead

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(Sacramento, CA)
Friday, April 13, 2012

National Basketball Association Commissioner David Stern says the league was prepared to loan the Maloofs every dollar of the $74 million they agreed to put toward the project at the February All Star game meetings.   

Stern: 20  "It was always non binding and I think it's fair for the Maloofs to say they don't want to do it.  I think had they done that a little simpler, a little earlier, and a little more directly, it could have saved a lot of angst and trouble."

Stern's comments sandwiched before a meeting between George Maloof and Mayor Kevin Johnson, but after George Maloof and his attorneys had held court for reporters.  Maloof says he never agreed to the pre-development funds during February discussions in Orlando, but the group felt pressure to show some progress to the media gathered outside their hotel.  

MALOOF: "And so we sat around the table and said how do we address this before we go downstairs and meet with the press?  And so we all sat around and it took about five minutes.  The Mayor was included, the mayor's assistant, other people from the league.  And we said, this is what we're gonna say.  Let's tell the press that, 'We have the framework of a deal but we have lots of work to be done'….a framework of deal with lots of work to be done.  And that's how we coined it." 

Maloof went on to say he attempted to bring up the pre-development funds issue and thirteen others by sending a "red-lined" term sheet to the City Attorney-at-the-time, Eileen Teichert.  But, he says  no one ever responded to that term sheet, and still haven't, now seven weeks after he sent it.

After Stern's comments and after his meeting with Maloof, an angry Mayor Kevin Johnson says he never heard about a marked-up term sheet and that during today's meeting, it appeared the Maloofs were looking for any reason not to participate.

Johnson:   "They do not want to put up collateral if the city refinances its loan!  That is…they would execute me in Sacramento if I came back with a deal with no collateral, with a worst deal than we had the first time we provided a loan in support."

He says that's when he knew there was nothing more to talk about
JOHNSON: "If the owners don't want to be in Sacramento and they want to go elsewhere, there is nothing we can do -at all- to change their mind.  If $255 million of a public investment is not enough, there's nothing else that we can do."
In Sacramento, City Manager John Shirey ceased all arena-related operations and started the work of breaking contracts.  He refrained from getting emotional and instead kept the door open for future negotiations with the Kings' owners.

SHIREY: "If you read the word of their statement out today, they say they're commited to remaining the Sacramento Kings.  We hope they're sincere.  One way in which they can show that sincerity is get back together with us and, you know, move forward on a project we thought was a great deal for them as well for our community."

The Maloofs also broached the idea today of renovating Power Balance Pavilion.  Johnson says any renovation should be financed privately. 
When asked if he thought the Maloofs were sincere in their desire to renovate or if it was a smoke screen before trying to move to Anaheim, City Councilman Steve Cohn was not as adept at keeping his emotions in check. 
"It's hard to say what they're thinking.  If you're asking if I find them credible at this point?  No."
Cohn says the lack of a deal prevents any further work on a new entertainment and sports complex at the Railyards because the Maloofs have a no-compete clause in their deal with the city.  The Railyards development and mass transit project called the Intermodal will continue on as planned. 
The final word on a day full of negatives might as well be positive.  Though Stern was obviously unhappy the deal had fallen apart, he did have glowing praise for Sacramento.
STERN: "I do want to say that we asked the City of Sacramento to step up and that city responded in an extraordinary way.  They've always supported NBA basketball and they couldn't have supported it in a finer fashion."
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