Secret Deal to Keep the Kings in Sacramento?

     SACRAMENTO (CN) – Sacramento city leaders provided a “secret subsidy” to investors seeking to buy the Sacramento Kings to keep the franchise from being moved to Seattle, a citizen group claims in court.
     The Coalition for Responsible Arena Development sued Sacramento in a FOIA complaint in Superior Court.
     The Sacramento City Council has tentatively approved a $258 million investment for construction of a new downtown “Entertainment and Sports Complex,” to be used as the arena for the NBA Kings.
     But the Coalition claims the city’s actual contribution will be much higher, because of “secret compensation” promised by city officials to the prospective arena developers.
     The Coalition demands public records on the arena project.
     It claims city officials gave bucked to the investment group’s demands for extra subsidies, by undervaluing city-owned property.
     A group of private investors in Sacramento is trying to buy the NBA team from the Maloof family, as are a competing group of investors in Seattle.
     The Coalition claims that the Sacramento group of investors “previously informed City Manager [John Shirey] and Mayor [Kevin] Johnson that the Kings franchise was only worth approximately $400 million, and not the $525 million being offered by the Seattle Investor Group.”
     The local group then “demanded compensation from the city in order to make up the difference between their estimated value of $400 million and the $525 million required to match the Seattle Investor Group,” the complaint states.
     “Petitioner alleges on information and belief that the City Manager John Shirey, Mayor Johnson and others conspired to provide the Sacramento Investor Group this subsidy for its acquisition of the Kings franchise – and do so in a manner that would not be disclosed to the public.”
     To bridge the gap, the city provided “secret compensation” that was not made public, the coalition claims.
     The so-called “sweeteners” include the conveyance of City-owned parking facilities, billboard leases and city-owned real estate which city leaders purposefully undervalued, the coalition claims.
     A staff report on construction and financing of the arena stated that the property to be contributed by the city has an aggregate value of $37.98 million, the complaint states.
     However, “the true value of the properties to be conveyed to the Sacramento Investor Group is far greater than the indicated $37.98 million set forth in the Term Sheet,” the coalition claims.
     The Sacramento City Council approved the term sheet for the complex on March 26, three days after it publicly released the staff report.
     The coalition says it requested public records pertaining to the arena project and the city-owned properties to be conveyed to the investor group, but the city has refused to respond or comply, in violation of the FOIA.
     The Coalition want to see the records.
     It represented by Jeffrey L. Anderson with Cohen & Durrett.

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