Anaheim approves bond deal for Kings
The Anaheim city council unanimously approved a $75 million bond deal Tuesday night to entice the Sacramento Kings to relocate to Orange County.
The city council twice voted 5-0 for the lease-revenue bond measures, resulting in a round of applause from the audience at its packed City Hall meeting room.
”Anaheim took a giant step closer to bringing an NBA team to Anaheim and the Honda Center,” Anaheim Mayor Tom Tait said. ”I am thrilled. A better word is stoked.”
Tait repeatedly emphasized the city is borrowing no money and has no financial risk in the deal. According to every Anaheim official at the meeting, the city is merely acting as a conduit for a private investment by Henry Samueli, the billionaire owner of the NHL’s Anaheim Ducks.
”I’d like to recognize this is a historic moment for us,” Council Member Harry Sidhu said. ”This is going to be a great economic engine for us. A lot of jobs are going to be created, and I’m fully confident in that.”
Samueli, who also manages the city-owned arena, is financing the deal, which includes $25 million in upgrades to Honda Center, including a practice court and new locker rooms. Another $50 million will be working capital for moving costs that could include relocation fees paid to the NBA’s other owners.
The Kings must file for relocation by April 18 for the deal to move forward. The bond issue was publicly opposed by just one person in the meeting crowd, which also included a fan wearing the No. 4 Sacramento jersey of retired star Chris Webber.
Although most city officials were careful to emphasize the bonds could be used to move any team, not just the Kings, Council Member Kris Murray acknowledged the obviously messy emotions behind the deal.
”My heart does go out to the Sacramento fans and residents,” Murray said. ”They’re a great team, and I know we would be proud to have them in our city. … I hope we come up with some creative way to replace the cowbell.”
Tait expressed similar emotions after the meeting.
”Most teams come from another city,” Tait said, noting the Kings have moved three previous times, while both the Lakers and Clippers didn’t start out in Los Angeles. ”That’s just the nature of professional sports.”
The bonds will be purchased by Samueli and repaid over 10 years with Honda Center revenue.
”It is the investors that are taking on the risk in this financing structure,” said Bob Wingenroth, Anaheim’s Director of Finance.
Those investors are three companies bearing the initials of Samueli, the co-founder of Broadcom Corp. and a UCLA graduate who bought the Ducks from the Walt Disney Company in 2005. The Ducks won the Stanley Cup two years later, but Samueli is a longtime basketball fan whose sports ownership dreams have always included an NBA team for Orange County.
Samueli didn’t attend the meeting, but his Anaheim Arena Management company issued its first public comment on the deal.
”We trust that the overwhelming support of Anaheim’s city management and elected officials will be looked at favorably by the NBA and its member clubs,” company chairman Michael Schulman said in a statement. ”This vote is an important first step as we continue working toward hosting an NBA franchise at Honda Center.”
The well-traveled Kings’ move out of California’s capital city still is far from a done deal, although this lucrative financing plan removes a major obstacle for Kings owners Joe and Gavin Maloof. Their active interest in Anaheim became public in recent months after several years of failed arena deals to replace the former Arco Arena, the Kings’ aging home.
If the Kings file for relocation, the NBA’s other 29 owners must approve the move by majority vote. The Maloofs then might need to pay a relocation fee to the owners, including possibly hefty payments to the Lakers and Clippers, who share Staples Center 35 miles away.
Sacramento Mayor Kevin Johnson recently sounded resigned to the Kings’ departure, but the former NBA player’s city government has taken a more combative tone recently. On Monday, Sacramento’s assistant city manager sent a letter asking Anaheim to cease all negotiations over worries the Kings might default on $77 million owed to the city from a 1997 loan.
Joe Maloof responded to the letter with his first public comments on the deal, telling the Orange County Register that the Kings will repay everything they owe, and warning Sacramento to stay out of his business dealings.
Tait suggested Sacramento’s anger might be misdirected at Anaheim, saying he hasn’t even spoken with the Maloof brothers during the process, which began before he took office late last year.
When asked about Sacramento’s demands, which could be the first step in establishing grounds for a lawsuit, Tait responded: ”Well, I’m Mayor of Anaheim, and I look out for the best interests of the city of Anaheim.”
Tait said the city had two main criteria in approving the deal: No city money would be involved, and any new NBA team would use Anaheim as its only geographic identifier.
The Kings are likely to be renamed the Anaheim Royals if they relocate. The city is determined to avoid the embarrassment of the local baseball team’s decision to rename itself the Los Angeles Angels of Anaheim in 2005, sparking a failed four-year legal battle.
”We’re not there yet,” Tait said. ”We set the table for the Kings or, in theory, another NBA team to come to Anaheim, and now we’re waiting for the vote of the NBA owners.”