Less than a month after Sacramento approved an arena plan to keep the Kings in town, the NBA reportedly had to step in to keep the deal on track.
After the team's owners said they do not believe they should pay their portion -- $3.26 million -- of arena pre-development work, NBA commissioner David Stern told the Sacramento Bee that the league will pay the first installment. Sources told the newspaper that figure is $200,000.
"Following the agreement in principle ... the parties have been attempting to reach agreement on funding the pre-development expenses that must be incurred in order for the project to move forward in a timely fashion," Stern said in an email to the Bee. "Those discussions have stalled, but I have advised Mayor (Kevin) Johnson that the NBA will advance pre-development expenses on behalf of the Kings pending our report to the NBA Board of Governors at its meeting on April 12-13."
The city was scheduled to kick in $6.5 million and the arena operator was supposed to pay $3.26 million for pre-development of the almost $400 million venue.
"It's pretty simple," Kings co-owner George Maloof said in a phone interview with The Associated Press. "We're playing the role of the tenant. We didn't feel like it would be appropriate to pay for pre-development costs as a tenant. On top of that, there was a clause that had the Kings paying for AEG's contribution if the project didn't happen so we'd have to pay them back. We didn't think that was fair and we still don't."
After the Maloof family said it didn't believe it should pay its share, Johnson issued a statement.
"The success of the new entertainment and sports complex depends on complete trust and partnership among all parties," he said, according to the newspaper. "It was with that spirit that we all agreed to a deal in Orlando, including the Maloof family, who looked an entire room in the eye and promised their commitment to Sacramento.
"In light of the Maloofs' promise, we fully expect all parties to live up to their commitments."
It's not clear if the league will continue to pay the Maloofs' share of the pre-development expenses after the board of governors meetings, which could mean another showdown because the family still doesn't believe it should pay.
"The team should not be responsible for the pre-development expenses," said Eric Rose, a Maloof spokesman, according to the Bee. "That has been the position of the Kings from the start."
The city, Kings and NBA agreed to a non-binding term sheet earlier this month that would keep the team in Sacramento for at least another 30 years.
Under the agreement, the city will contribute $255.5 million to the project, mostly by leasing out parking garages around the facility. The city is also exploring an option to establish a parking authority instead.
The Kings have agreed to pay $73.25 million, and arena operator AEG will contribute $58.75 million. The remaining gap will be covered by a ticket surcharge, advertising around the facility, the sale of public lands and a sponsorship campaign to sell bricks and plaques around the complex. Construction is expected to begin in the late spring or early summer next year on the arena, which would open for the 2015-16 season in the downtown rail yards.
The Kings appeared determined to move to Anaheim last year before Johnson convinced the NBA to give the city one last chance to help finance an arena. The sides reached a non-binding agreement just before a March 1 deadline and the goal is to have the new arena ready for the season opener on 2015.
Maloof said he believes the sides can resolve the disagreement over the pre-development costs.
"I don't think it can hold up the whole project," he said. "It's our intention to try to work through all the issues and make sure everybody is comfortable, which is normal in any deal. This is just one of them. We always try to be as positive as possible that we can work through it. At the same time, we just don't feel it's appropriate the way it's written now."
Information from The Associated Press was used in this report.