The Sacramento City Council gave its approval Tuesday night for the city to begin negotiations with investors interested in building a new arena that would potentially keep the NBA Kings in town.
The measure, which was approved 7-2, also called for $150,000 for attorneys and arena-financing experts. The vote came at the end of a roughly 90-minute discussion of the arena, which included comment from members of the public both for and against the project.
The vote did not include any specifics concerning which investors the city will negotiate with, a location of the arena, or how much public money would be involved. However, city manager John Shirey said he hoped to present a financing term sheet to the council by mid-April.
Late Monday night, a report also surfaced of a minority owner interested in buying the Kings and building a privately-financed arena. The minority owner, John Kehriotis, owns 12.25 percent of the Kings and according to a report from TV station FOX40 would attempt to invoke his right of first refusal to buy the team and build the arena for an estimated total of $750 million.
A Seattle group led by Chris Hansen and Microsoft CEO Steve Ballmer reached an agreement in January to buy 65 percent of the Kings for a reported $341 million. That purchase, however, is not official until it receives approval from the NBA Board of Governors in April.
Sacramento mayor Kevin Johnson is attempting to assemble an ownership group and arena deal that would convince the NBA to deny the sale to the Hansen/Ballmer group and keep the team in California.
There were several reports that Johnson could unveil the ownership group during his annual State of the City address Thursday night.
Johnson has a self-imposed deadline of Friday to announce his ownership group and arena plan.
The Tuesday night vote allows the city to begin officially negotiating with the team of investors, which is expected to include Ron Burkle, co-owner of the Pittsburgh Penguins of the NHL, and Mark Mastrov, founder of 24-Hour Fitness.
That group would reportedly propose an arena deal that would likely include more than $200 million in funding from the city.
Kehriotis has not been reported to be part of the ownership group being put together by Johnson.
However, one Sacramento council member, Kevin McCarty – who was one of the two no votes Tuesday – said he wanted the city to reach out to Kehriotis.
The Bee also reported Tuesday that a trustee overseeing a 7 percent share of the Kings that is in bankruptcy wants to hurry up the sale to beat the NBA’s planned vote on the sale of the team to the Seattle group.
Trustee David Flemmer has said, according to the Bee, that whoever buys the share could also have a right of first refusal to match or better the offer from the Seattle group.
It’s unclear, though, if minority owners will indeed have a right of first refusal.