Kings arena downtown: Delay killer on new arena could push project back months as the city wants opponents to ante $100M in bond money

by Jerry Feitelberg and Amaury Pi Gonzalez

SACRAMENTO–Opponents who have filed a environmental lawsuit against the city of Sacramento and the Sacramento Kings over traffic conditions, drunks and rowdy fans in the Downtown Plaza neighborhood, and objections over subsidies which includes city owned parking garages that would pay off the monies barrowed from the general fund to pay for the new Kings arena.

There are two separate law suits filed one from a group led by Caltrans retired director Adriana Saltonstall who is challenging the city and Kings against building the new arena for the above reasons and Saltonstall’s group also is challenging California Governor Jerry Brown’s bill that he signed that makes it harder for opponents to file a lawsuit against new arena construction in the state specifically the new Kings arena. Saltonstall group says that the disallowing or strengthing laws with more teeth in them to prevent filing lawsuits against arena constructions is unconstitutional.

The second opposition group has filed a CEQA suit siting similar issues the cases will be heard in two differents court hearings. The major issue at hand now is the costs that the Kings and the city will incur if the project is delayed there is a laundry list of them and the city is asking the judges in each of the cases for the opponents to pony up $100 million as bond money to cover loss expenses in the event that the Kings and the city win the lawsuits and are allowed to begin construction at Downtown Plaza.

The Kings are scheduled to open the new arena which will seat over 17,000 fans as a smaller scale NBA building the new arena is scheduled to be ready in October 2016. The lawsuit that has been filed can take up the better portion of the year and the scheduled construction for groundbreaking is set for the end of this month. The delay at best could have the new arena ready sometime in early 2017 past the deadline set by the NBA. The NBA has the right to buy the Kings and move them in the event of a schedule delay or if the Kings lose the lawsuit filed by the opponents.

Kings Chief Financial Officer John Rinehart says that the Kings would suffer a tremendous financial hit for any delay to the project and James Moose a prominent Sacramento lawyer told the Sacramento Bee this week that it isn’t uncommon for judges to ask opponents in environmental cases like these with time sensititve constraints for bond money to be held by the court until the case is decided.

There lies the question as to whether or not the opponents have $100 million to forward to the court in bond money until the case is decided and the judge in considering the bond money and is taking into account the financial status of the opponents and the strength of the case. The Kings are about to lose close to $2.5 million in construction loses, the city’s share of loses could mount up to $5.7 million primararly because of street planning and scheduled construction to block the streets from traffic during that time, the Kings have already spent $36 million on buying the Downtown Plaza proper and Kings have shared in the land purchase at $60 million.

If the Kings and the city were to lose the case entirely the Kings and the city would be on the hook for the Downtown Plaza property with the team facing the strong possibility of being forced to leave Sacramento by the NBA. One thing that could be considered in the event any new owner who buys the Kings would absorb the costs and loses at Downtown Plaza which would total $96 million plus the purchase of buying the team.

Jerry Feitelberg is covering the Sacramento Kings and Golden State Warriors new arena developments for http://www.sportsradioservice.com

Leave a comment