SAN FRANCISCO (Reuters) - Sacramento officials announced on Saturday that they had reached a $450 million deal with private developers to build an entertainment and sports complex they hope will keep the Kings basketball team from leaving town for Seattle.
A private investor group led by hedge fund manager Chris Hansen is seeking to buy the Sacramento Kings and move them to Seattle.
But the National Basketball Association must approve the deal and Mayor Kevin Johnson, a former star with the NBA’s Cleveland Cavaliers and Phoenix Suns, has lined up investors to make a counter offer.
That group includes billionaire supermarket mogul Ron Burkle, 24 Hour Fitness founder Mark Mastrov and Tibco Software Inc. chief executive Vivek Ranadive.
Johnson has said NBA Commissioner David Stern has approved his request to present a counteroffer to the league. The NBA board of governors is set to vote in mid-April on whether to allow Sacramento to keep the team or award it to Seattle.
A preliminary meeting of the board on the fate of the basketball franchise is scheduled for early April 3, when Sacramento and Seattle investment groups will present their cases to own the Kings.
The NBA could not be reached for comment on Saturday night on the Sacramento deal.
“This is a monumental project that will redefine the Downtown Plaza and revitalize our urban core,” Sacramento City Manager John Shirley said in a written statement.
“This project is about providing a regional attraction and creating economic development opportunities that will retain and create thousands of jobs, bring people downtown, increase property and sales tax - all of which will contribute to our city’s vitality,” Shirley said.
Johnson said in a tweet that “consistent w/our core tenets, the deal avoids new taxes, protects the city on the Kings loan and ensures no net impact to the general fund.”
According to a term sheet released by the city, the total development cost of the complex is estimated at $447 million.
As part of the deal, the city will contribute $258 million. Most of the city’s contribution would be funded through the leveraging of public parking assets as well as property sales.
The city would own the sports center, and its anchor tenant the Sacramento Kings would be locked into a 35-year non-relocation agreement with two five-year extension options.
Ranadive, Mastrov and Burkle would make up the remaining $189 million to fund the sports center. The investment trio would also buy the Kings.
The term sheet will be submitted to the city council on Monday for approval.
Writing and additional reporting by Dan Whitcomb; Editing by Todd Eastham