Sacramento officials and the owners of the Sacramento Kings (NBA) have reached a tentative deal on financing for a new arena in the city’s downtown area.
The deal, still subject to final approval once the city’s part of the funding package is determined, calls for larger-than-planned contributions by the Maloofs, owners of the Kings, and arena-management firm AEG. For a projected $387-million arena, the city will contribute between $200 and $250 million (depending on how much the rights to future downtown parking revenues yield), with the Maloofs will put up $75 million upfront (partially funded with proceeds of the sale of Power Balance Pavilion) and AEG will put up almost $60 million, per the Sacramento Bee. To replace the $9 million collected annually by the city at the downtown meters and ramps, there will be a ticket surcharge at arena events (between 3 percent and 5 percent). Some other small sources of revenue, as well as money from the NBA, will fill out the funding plan.
In addition, the sale of the parking fees will not include revenue collected on Kings game nights. Money generated by ramps on those nights will go back to the city and the Kings.
As mentioned, AEG will manage the arena and be in charge of sponsorships and naming rights. Once revenue generated by the facility reaches a certain point, it will be split between AEG and the city.
If the deal is struck — and all indications is that it will — the new arena will take the Kings off the table as a potential tenant for arenas in Anaheim and Seattle. With no indication the NBA will be expanding any time soon, it raises the ante for the New Orleans officials trying to tie up the Hornets with a long-term lease at New Orleans Arena. And it will undoubtedly cause chatter among fans of every NBA team seeking a new arena (such as Milwaukee).
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