City asks Anaheim to stop relocation talks with Kings; Maloof fires back
Sacramento launched a game of hardball Monday in its effort to keep the Kings – or at least keep the team from walking away from its city-backed $77 million loan.
City officials, hinting they might go to court, called on the city of Anaheim to stop negotiating a deal to bring the Kings to Orange County.
In a terse letter Monday to Anaheim officials, Assistant City Manager John Dangberg said Anaheim was ignoring the "blighting impacts" that luring the Kings from Sacramento would have on the capital city. The move would cause "irreparable harm," the letter said.
If, however, Anaheim "insists on continuing the negotiations," the letter said, that city must require the team to honor its debt to Sacramento.
In a phone conversation Monday night, Kings co-owner George Maloof told The Bee he was angry at the city's letter. "It is interfering with our business," he said. "We're going to take every measure possible to protect ourselves. We have no intention of leaving that town without paying our debt. For someone to imply that we are not going to pay our debts, it's wrong, it's ridiculous."
Sacramento will also ask state Senate President Pro Tem Darrell Steinberg, D-Sacramento, to carry a bill barring Anaheim from moving ahead unless Sacramento is assured the Kings will pay off the $77 million they owe the city.
Up to this point, the Kings haven't given the city any written assurance they'll pay the debt, Dangberg said.
"We are protecting the interests of the city of Sacramento and the taxpayers of the city of Sacramento,"
Dangberg said in an interview. "We are not accusing anybody of doing anything. We are just stating the facts as they are."
Dangberg's broadside came as Anaheim's City Council prepares to meet today to consider issuing a $75 million bond paving the way for the Kings' relocation to the city-owned Honda Center.
The council is expected to approve the bonds, which would pay for $25 million in improvements to the Anaheim arena and other expenses, and would include a $50 million loan to the Kings. The bond would be repaid by Honda Center manager Henry Samueli.
At its own meeting this evening, the Sacramento City Council is to consider hiring the Meyers Nave Riback Silver & Wilson law firm to advise the city on how to force the Kings to repay the Sacramento debt.
The Maloofs have until April 18 to decide whether to ask the NBA for permission to leave.
Officials at Anaheim City Hall and the Honda Center declined comment.
Dangberg's letter dangles the prospect of a lawsuit against Anaheim officials over alleged violations of the powerful California Environmental Quality Act.
The blight argument has been used to stymie expansion by big-box retailers in California. An appeals court blocked two Walmart super-stores in Bakersfield seven years ago after lawyers said the stores would cause blight by putting scores of competitors out of business.
One of the stores got built, but the case took four years, said Brett Jolley, a Stockton lawyer involved in the matter.
In the Kings case, Jolley said, the 400 miles between Sacramento and Anaheim is probably irrelevant under the environmental law.
"They're saying Anaheim has to look at that (environmental) impact, even if it's occurring all the way in Sacramento," he said.
If Sacramento can't keep the Kings, it wants to protect itself financially. The city issued bonds in 1997 to make a loan to the Kings' prior owner. If the team leaves, it must immediately repay the $77 million outstanding, including a penalty, said city Treasurer Russ Fehr.
If the Kings don't pay, the city would take ownership of Power Balance Pavilion and a $25 million stake in the team.
But that would leave city officials with a financial headache. Already saddled with a huge budget deficit, they would have to pay off the $77 million debt to bondholders.
And they'd be left with a property of questionable value. The Natomas arena and surrounding acreage has been assessed at $56.5 million. But the Maloofs have said it's worth only $30.5 million, according to appeals pending with the Sacramento County Assessment Appeals Board.
As Sacramento arms itself legally, the rhetoric from City Hall is also getting harsher.
On Saturday, R.E. Graswich, special assistant to Mayor Kevin Johnson, was quoted in the New York Times as saying the mood in Sacramento toward the Kings "is good riddance, although I'm not sure it has sunk in."
"We've grown up as a sports town," Graswich said. "We're not going to back any crummy product they put on the floor. We've got bigger problems – 12.5 percent unemployment, people being laid off or furloughed, their homes in foreclosure. The Kings would be a nice distraction if they were any good, but they're not."
Johnson's office did not make the mayor available for comment Monday.
A Kings spokesman said the team "has no response" to Graswich's comments. The remarks did result in stinging reactions from Kings fans and those close to the team.
Grant Napear, who does TV play-by-play for Kings games, posted on his Twitter account that Graswich's comments were "a freakin disgrace!"
"The fact this guy is the right hand man to Kevin Johnson pretty much says it all!" Napear wrote. "What a shame and what a poor, poor choice by the Mayor."
Others in the community remained more conciliatory, though they haven't made headway in persuading the Kings to stay.
A group of elected and business leaders approached the Maloofs last week with an idea to renovate Power Balance Pavilion. A conference call with the owners faltered when the group said financing was not in place.
The Kings issued a statement saying renovating the arena isn't a viable option.
City officials, hinting they might go to court, called on the city of Anaheim to stop negotiating a deal to bring the Kings to Orange County.
In a terse letter Monday to Anaheim officials, Assistant City Manager John Dangberg said Anaheim was ignoring the "blighting impacts" that luring the Kings from Sacramento would have on the capital city. The move would cause "irreparable harm," the letter said.
If, however, Anaheim "insists on continuing the negotiations," the letter said, that city must require the team to honor its debt to Sacramento.
In a phone conversation Monday night, Kings co-owner George Maloof told The Bee he was angry at the city's letter. "It is interfering with our business," he said. "We're going to take every measure possible to protect ourselves. We have no intention of leaving that town without paying our debt. For someone to imply that we are not going to pay our debts, it's wrong, it's ridiculous."
Sacramento will also ask state Senate President Pro Tem Darrell Steinberg, D-Sacramento, to carry a bill barring Anaheim from moving ahead unless Sacramento is assured the Kings will pay off the $77 million they owe the city.
Up to this point, the Kings haven't given the city any written assurance they'll pay the debt, Dangberg said.
"We are protecting the interests of the city of Sacramento and the taxpayers of the city of Sacramento,"
Dangberg said in an interview. "We are not accusing anybody of doing anything. We are just stating the facts as they are."
Dangberg's broadside came as Anaheim's City Council prepares to meet today to consider issuing a $75 million bond paving the way for the Kings' relocation to the city-owned Honda Center.
The council is expected to approve the bonds, which would pay for $25 million in improvements to the Anaheim arena and other expenses, and would include a $50 million loan to the Kings. The bond would be repaid by Honda Center manager Henry Samueli.
At its own meeting this evening, the Sacramento City Council is to consider hiring the Meyers Nave Riback Silver & Wilson law firm to advise the city on how to force the Kings to repay the Sacramento debt.
The Maloofs have until April 18 to decide whether to ask the NBA for permission to leave.
Officials at Anaheim City Hall and the Honda Center declined comment.
Dangberg's letter dangles the prospect of a lawsuit against Anaheim officials over alleged violations of the powerful California Environmental Quality Act.
The blight argument has been used to stymie expansion by big-box retailers in California. An appeals court blocked two Walmart super-stores in Bakersfield seven years ago after lawyers said the stores would cause blight by putting scores of competitors out of business.
One of the stores got built, but the case took four years, said Brett Jolley, a Stockton lawyer involved in the matter.
In the Kings case, Jolley said, the 400 miles between Sacramento and Anaheim is probably irrelevant under the environmental law.
"They're saying Anaheim has to look at that (environmental) impact, even if it's occurring all the way in Sacramento," he said.
If Sacramento can't keep the Kings, it wants to protect itself financially. The city issued bonds in 1997 to make a loan to the Kings' prior owner. If the team leaves, it must immediately repay the $77 million outstanding, including a penalty, said city Treasurer Russ Fehr.
If the Kings don't pay, the city would take ownership of Power Balance Pavilion and a $25 million stake in the team.
But that would leave city officials with a financial headache. Already saddled with a huge budget deficit, they would have to pay off the $77 million debt to bondholders.
And they'd be left with a property of questionable value. The Natomas arena and surrounding acreage has been assessed at $56.5 million. But the Maloofs have said it's worth only $30.5 million, according to appeals pending with the Sacramento County Assessment Appeals Board.
As Sacramento arms itself legally, the rhetoric from City Hall is also getting harsher.
On Saturday, R.E. Graswich, special assistant to Mayor Kevin Johnson, was quoted in the New York Times as saying the mood in Sacramento toward the Kings "is good riddance, although I'm not sure it has sunk in."
"We've grown up as a sports town," Graswich said. "We're not going to back any crummy product they put on the floor. We've got bigger problems – 12.5 percent unemployment, people being laid off or furloughed, their homes in foreclosure. The Kings would be a nice distraction if they were any good, but they're not."
Johnson's office did not make the mayor available for comment Monday.
A Kings spokesman said the team "has no response" to Graswich's comments. The remarks did result in stinging reactions from Kings fans and those close to the team.
Grant Napear, who does TV play-by-play for Kings games, posted on his Twitter account that Graswich's comments were "a freakin disgrace!"
"The fact this guy is the right hand man to Kevin Johnson pretty much says it all!" Napear wrote. "What a shame and what a poor, poor choice by the Mayor."
Others in the community remained more conciliatory, though they haven't made headway in persuading the Kings to stay.
A group of elected and business leaders approached the Maloofs last week with an idea to renovate Power Balance Pavilion. A conference call with the owners faltered when the group said financing was not in place.
The Kings issued a statement saying renovating the arena isn't a viable option.
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