This week, Sacramento Kings CFO John Reinhart stated in court papers filed by the Kings and the city that even a short delay in the arena construction could result in huge losses for the team. Both parties urged the Sacramento Superior Court to require petitioners who oppose the project to post a hefty bond covering the potential losses.
If the arena does not open by 2017, the NBA has a right to buy back the team and move them out of town—a transfer the team avoided last year when it was purchased by Vivek Ranadive after the league vetoed another group’s attempt to move the Kings to Seattle. The team has already spent $60 million purchasing the Downtown Plaza and paying architect fees.
The NBA’s 2017 buy-back deadline is not the only source of potential loss, however. A delay could push completion of excavation activities into the winter rainy season, which would cause serious problems for the construction timeline. With arena construction delayed, the team would also face increased financing costs, potential NBA penalties, and substantial revenue losses.
The bond request comes after a group of petitioners filed a CEQA lawsuit seeking to enjoin the $477 million project. In total, two groups have filed CEQA lawsuits against the city. The hearing on the injunction request is set for July 25. The Kings request that the petitioners post a $100 million bond, and the city requests an additional $5.7 million bond to cover its own investments.
The bond request was reported by the Sacramento Bee. Click here for the full article.