Kings co-owner wants mayor removed from arena negotiations
By J. Michael Falgoust, USA TODAY
To work out a deal with the city of Sacramento for a new entertainment complex for the Kings, co-owner George Maloof would like to hit the reset button with one key figure absent.
"I don't think I'd want to negotiate with the mayor," Maloof told USA TODAY Sports on Saturday. "Maybe there's someone else that I'd feel more comfortable with.
"We're disappointed in comments made by the mayor that we feel were shots to us that were unfair and not truthful."
Mayor Kevin Johnson has yet to be reached for comment Saturday. Phone and email messages were left with his spokesman, Joaquin McPeek.
Johnson, who ended talks on Friday in New York, had harsh words for the Maloof brothers, Gavin, Joe and George, since this process began a year ago. He said they weren't trustworthy and backed out of the deal in the 11th hour after the city council approved a non-binding term sheet a month ago.
Johnson said the Maloofs demanded a deal Friday where they wouldn't put up any collateral. George Maloof, however, said that was misleading.
"Yes, that's true," he said of the no-collateral demand, which Maloof claimed was brought up in Orlando during All-Star weekend and Feb. 27 when the sides announced they were on the path to an agreement. "Everybody knew that Day 1. I don't know why they're surprised about that yesterday. … If he's using that to walk away, that's not right."
The Kings were on the verge of moving to Anaheim until Johnson stepped in, dissuaded them from filing relocation papers and tried to work out a deal for a $391 million entertainment complex near downtown.
After Friday's meeting during the NBA's Board of Governors, Johnson declared the deal "dead" and brushed off the Maloofs' suggestion for the city to consider help revamping Power Balance Pavilion, where the Kings have played since moving there in 1985.
"We were trying to come up with different ways to get things done in Sacramento and that was one way that we thought. But if he's not interested in it — although I think it's a good one — I would save the city a lot of risk," George Maloof said. "If they're not interested, then we understand.
"We all feel we can play in Power Balance. We are still open to discuss anything with the city that they want to discuss with a new arena."
But Johnson's presence isn't preferred.
The NBA was in the middle of the negotiations, and Commissioner David Stern accepted the Maloofs' decision to not go through with the deal. But he was disappointed it took so long. Like Johnson, he questioned the relevance of using economist Christopher Thornberg, who advised the Maloofs against taking the deal.
Thornberg is a founding partner of Beacon Economics and considered a expert in regional economies and real estate.
Maloof reiterated that their decision to pull out late was because they only had eight business days to evaluate the terms, which included Anschutz Entertainment Group as the operator of the proposed city-owned facility, before the city's March 1 deadline to provide a financing plan to the NBA.
"We never received a response from our term sheet. I'm not throwing David under the bus at all, (but) you can't pull out of something until you hear from the other side," Maloof said. "It's pretty normal. We were very vocal on our displeasure on many specific terms. We felt the deal wasn't a good deal, not only for us but for the city."
On Feb. 28, the day after reaching a non-binding framework for a deal in Orlando, Joe and Gavin Maloof stood at center court of a Kings home game vs. the Utah Jazz. Johnson was in the middle and all three were hand-in-hand as they were saluted by huge ovation.
"There were smiles because it was a positive thing we were moving towards, working things out, but we knew there was a lot to be done," George Maloof said. "At that point, the actual term sheet itself was still being worked on and I hadn't seen until the night my brothers were seen at the basketball game with Kevin Johnson. At that time I was headed back to Las Vegas and I was receiving the next version of the term sheet and again had major issues with it and I let the league know about it."
In less than a week, the wheels began to come off.
Letters obtained by USA TODAY Sports show that on March 5, Maloofs attorney Scott Zolke sent a one-page letter to City Attorney Eileen M. Teichert and asked that they address "the unresolved issues." The next night, the Sacramento city council approved the non-binding term sheet between the Maloofs, the city and AEG.
On March 28, Zolke sent a one-page letter to Assistant City Manager John Dangberg that emphasizes "there was never an agreement reached" in Orlando and mentions the "the unresolved issues" again.
In an April 2, six-page letter to Dangberg, Zolke writes that "the City has yet to solidify a financing plan" and questions if a facility can be built in time to open for the 2015-16 season.
Though Johnson said most of this was news to him, George Maloof insists that Stern's office informed him.
"We were working with the league. The league was working with the city throughout the whole year," he said. "It was our understanding that everything was getting to the city. … That was told to us by the league."
Stern acknowledged the he had communicated the Maloofs' concerns to Johnson and the city at a press conference Friday.
"What we told the Maloofs when they raised those issues is that they will be raised on their behalf with the city in the negotiations," Stern said. "And although we were not sure we could get any of them, we did get some of them, and this was a hard-fought negotiation. And so the city had all — and AEG had all of the concerns that had been expressed. And indeed many, most were rejected but some relatively important ones were addressed."