As reported by Tony Bizjak of the Sacramento Bee, the city of Sacramento has sent a letter to Anaheim telling that city to cease its negotiations with the Kings and to not vote on the $75 million in bonds to upgrade the Honda Center to NBA standards and pay for some of the Maloofs relocation fees.
The letter (which can be found here and is linked to in Bizjak’s article), which was issued by Sacramento Assistant City Manager John Dangberg, says that if Anaheim decides to continue to negotiate with the Kings, than they should make any issuance of bonds to the Kings first "contractually require" that the Kings pay off their $77 million in debt to the City of Sacramento before they move to Anaheim.
Dangberg also goes on to say that Anaheim’s environmental review of the impacts of the Honda Center improvement project are "woefully inadequate". Bizjak goes on to say that an environmental impact challenge could be a precursor to a lawsuit. He also said Monday that the city would seek state legislation to prevent a move without the Kings paying off the loan first.
City officials are worried the Kings might leave town without paying the loan because they have received no guarantee that it will be paid. As of now, if the Maloofs leave town without paying, Sacramento gets the existing arena and a $25 million stake in the team, both of which are worth much less than the $77 million loan owed to the city. The City has recently hired a lawfirm for $150,000 to ensure that the Maloofs pay up on the loan should they move as well.
How Anaheim responds to this could influence relocation one way or another. Sources told Sactown Royalty just last week that if Anaheim doesn’t approve bonds for the Kings before the deadline, it could be a dealbreaker.
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