Maloof responds to arena issue
With questions again swirling as to whether the Kings will remain in Sacramento, team co-owner George Maloof spoke with SI.com on Friday to break down the state of his family's arena-building affairs.
A deal was agreed to in principle on Feb. 27 in Orlando, where the Maloofs, Sacramento Mayor and former NBA point guard Kevin Johnson and NBA commissioner David Stern all celebrated what appeared to be the end of a long negotiating road. But the
Specifically, the Maloofs say they're unwilling to pay $3.25 million in pre-development fees, as well as the additional $3.25 million they say they've been asked to cover on behalf of potential owner/operator Anschutz Entertainment Group if the deal fell apart. Stern responded by announcing Thursday that the NBA would "advance pre-development expenses on behalf of the Kings pending our report to the NBA Board of Governors at its meeting on April 12-13," though it's unknown whether they might be willing to cover the entire amount in order to avoid more complications. Johnson, meanwhile, issued a statement about the matter on Thursday.
"The success of the new entertainment and sports complex depends on complete trust and partnership among all parties," Johnson said in the statement. "It was with that spirit that we all agreed to a deal in Orlando, including the Maloof family, who looked an entire room in the eye and promised their commitment to Sacramento. In light of the Maloofs' promise, we fully expect all parties to live up to their commitments."
While the term sheet that was agreed on was non-binding, the breakdown of how those costs would be shared was included on page 10 of the 45-page document. George Maloof -- who headed the family's Palms Casino in Las Vegas before it lost majority interest and remains the chairman -- has long been seen as the most discerning member of his family when it came to this deal.
That was one that we were vehemently against, for a couple of reasons. No. 1: As a developer -- and I've developed lots of properties -- you're used to paying those types of fees, those pre-development costs and consultants or architectural fees. I've never passed that fee onto my tenant, so it didn't make sense. I'm sure someplace in the world, a tenant has paid for a pre-development cost, but the customary way is that they don't pay for that. Not only that, but [the city] asked us to pay for AEG's cost if the deal didn't happen, and that's just not a fair deal. I just didn't believe that was fair from day one.
We've stretched ourselves on numerous occasions, but at the end of the day it's part of the process. I know it's a public deal, and I think the public should be informed. We're prepared to move forward and get it done at that site, but it's got to be under the right terms for everybody.
On any deal you do, there's always going to be pushback. It's very normal. I think the whole process is going to be a normal process of negotiating and we're not always going to agree on everything, but we'll try to work toward getting it done. We're still committed to that. I know the mayor said we all looked at each other in the eye and said, 'This is the deal,' but in reality we said that we have the framework of the deal and we have a lot of work to go. That was the real deal.