BY SPNW Staff 04:19PM 05/03/2013

Sactown bidders make deposit; foes file suit

An unnamed source told the Sacramento Bee Friday that the bidders to keep the Kings in Sacramento have deposited 50 percent of the purchase price into an escrow account. At the same time, an activist group opposed to the arena deal filed suit, saying the city is withholding evidence of “sweeteners” to arena developers from public records.

The amount of the counteroffer has not been disclosed, but if it matches the offer of $357 million that Seattle native Chris Hansen made to the Maloof family for 65 percent of the franchise, based on an NBA record valuation of $550 million, then the deposit was about $178 million. Hansen in February put down a deposit of $30 million that was said to be nonrefundable.

Reports circulated this week that the NBA, after previous deadlines had been missed, set Friday as a deadline for Sacramento to make a deposit. The deposit was the next step after Monday’s 7-0 vote by an NBA committee to recommend denial of Hansen’s application for relocation to Seattle, where he is continuing with plans to build a new basketball/hockey arena for SoDo while upgrading KeyArena for temporary occupancy.

The deposit helps the group get closer to a deal with the Maloof family, which last month wrote a letter to the NBA saying the first offer then was well short of Hansen’s bid, and therefore unacceptable. At the April 19 meeting of the NBA Board of Governors, Commissioner David Stern said the Sacramento offer was “in the same ballpark” as the Seattle bid.

Before the Maloofs can accept the backup offer, they must first decline the Hansen offer, and that hasn’t happened. Hansen vowed on his website Monday to continue pursuit of purchasing the Kings. The parties gather in New York at a special meeting of the BOG May 15 to vote, presumably to decide the issue

Meanwhile in Sacramento, a group calling itself the Coalition for Responsible Arena Development sued the city, claiming officials are illegally withholding information about the $258 million arena subsidy tentatively approved by the city council in March

The group claims Mayor Kevin Johnson, City Manager John Shirey and others added secret “sweeteners” that put the subsidy well beyond $258 million. In the lawsuit, attorneys Patrick Soluri and Jeffrey Anderson admonish the city for ignoring a request  made for documents under the state public records act.

 


YourThoughts

  • Leon Russell

    If the two bids for the Maloofs’ 65% of the Kings are close, then the Maloofs stand to get more money if they sell to the Sacramento group, because the Maloofs would get whatever the Sacramento group is offering, plus the Maloofs could keep the $30 million non-refundable deposit from Hansen. If they sell to Hansen, that $30 million deposit would be part of the sale price that Hansen pays for the Kings.
    So, that $30 million deposit, because it is supposedly non-refundable, could actually work against Hansen’s attempt to buy the Kings.
    And, from most accounts, it sounds like the Maloofs would not be above keeping Hansen’s $30 million deposit if they sold the team to the Sacramento group.
    I would find that very amusing if Hansen’s $30 million non-refundable deposit wound up making the Sacramento group’s offer worth more to the Maloofs than Hansen’s offer.
    Maybe that is why Hansen felt compelled to up his offer by $25 million — because the Maloofs potentially could get the Sacramento group’s money plus Hansen’s $30 million deposit if they sold to Sacramento.
    And that could be why Hansen appears so desperate to buy the Kings — because Hansen would look like the ultimate tool if the Maloofs sold to the Sacramento group and kept Hansen’s deposit. Hansen would not only lose out on the Kings, but would lose $30 million as a little consolation prize.

    • Mary

      You do realize that taking $30 million as part of a binding agreement, and then reneging on the rest would expose the Maloofs themselves to litigation? Even the NBA, with its goal and game shifting, hasn’t been that dense, which is they have repeatedly said that Hansen must be made “whole” in the event the sale does not go through. There are many possible scenarios, but what you laid out is not one of them, or at least not one that would make sense to the NBA.

      • Leon Russell

        This depends on the “binding” contract being conditional on the NBA allowing the Kings to move to Seattle. So, if the NBA does not allow the move to Seattle, then the contract is no longer binding. Meaning the Maloofs can decide not to honor it. I read that the contract was contingent on the NBA allowing the Kings to move. If that is not true, then my scenario is not valid.

        • MarkS

          Depends on what “is” is.

  • Leon Russell

    If the Maloofs sell to the Sacramento group, they get $341 million PLUS the $30 million non-refundable deposit from Hansen, which totals $371 million. That is more than the $358 million offered by Hansen (if they sell to Hansen, the $30 million deposit is part of the $358 million). So, if we believe the Maloofs have no scruples at all, you would think they would like the scenario where they sell to the Sacramento group plus keep the Hansen $30 million deposit. That would be the best outcome for the Maloofs.

    Supposedly, the “binding contract” between the Maloofs and Hansen is contingent on the NBA approving a move to Seattle. So, if the NBA does not approve that move, then the contract between the Maloofs and Hansen is no longer binding.

    Then the Maloofs will tell Hansen they decided not to sell to him, since their contract is no longer binding, and the Maloofs sell to the Sacramento group and keep Hansen’s non-refundable deposit.

    Sacramento wins. The Maloofs win. The NBA wins. And Hansen is played for a fool. And there would be no grounds for any lawsuits, since the Maloofs themselves would decline to sell to Hansen, once the contract was “unbinded” by the NBA refusing to let the Kings move to Seattle. The NBA would not have to refuse to let Hansen buy the Kings — the Maloofs would just decide they would rather sell to the Sacramento group.
    Any holes in this possible scenario?

    • art thiel

      Not sure that in the event the Maloofs take the backup offer, Hansen’s deposit would not be refunded. So many terms and conditions are unknown to us outsiders.

      Also don’t know whether the NBA is considering the additional $25M by Hansen. It’s possible the league could say the relocation recommendation was based on original PSA.

      Also possible that Hansen could find 16 votes necessary to approve relocation.

      Take the weekend off, Leon. We all deserve it.

  • jafabian

    It would be funny if an I-91 type of initiative passed in Sacramento. Just to see how Stern would deal with it.

  • http://twitter.com/Kirkland Kirkland

    Hansen could simply wait for the Sacramento lawsuits to shake out. If their anti-arena funding people win and nullify the Kings’ sale and arena deal, he’s in a good spot. (Assuming the inevitable Seattle lawsuits go his way, of course.)