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City officials and the new arena operator said Tuesday they are making progress on the terms of an arena deal for Sacramento, but there is still a long way to go before a final agreement is reached.
AEG President Tim Leiweke joined Mayor Kevin Johnson, City Councilman Jay Schenirer and City Manager John Shirey at the mayor’s weekly press conference to talk about the ongoing discussions and the specifics of AEG’s role with the proposed entertainment and sports complex.
“We have a lot to do and today begins the process,” Leiweke said.
AEG is a sports and entertainment presenter based in Los Angeles.
City representatives, the Maloofs, the NBA and AEG came to a tentative agreement for an entertainment and sports complex on the eve of the March 1 NBA deadline, preventing the Maloofs from relocating the team.
Despite having a prepared term sheet in place, Johnson said there are still details to finalize on the arena, including key elements of the pre-development stage that will help define the full scope and design of the project and move the process to environmental review.
City representatives are also discussing the future of the city’s parking assets, Johnson said.
“Our city manager is doing our due diligence to make sure the parking makes sense,” Johnson said. “We’ve said we have to protect the general fund, we have to protect jobs and we have to protect parking rates. That is our commitment.”
Johnson said the city manager’s office will be releasing a completed request for proposal soon, which will be sent to potential operators who have expressed interest in taking over the city’s parking inventory.
Johnson, Leiweke and representatives from AEG met with Sacramento Kings’ team owners, the Maloof family, for the first time Monday – discussions Johnson described as “productive.”
“We are optimistic about the possibilities,” he said. “This is the first time all of the partners are in the room together.”
AEG operates 130 arenas and entertainment facilities in the United States and around the world, including five on the west coast: The Rose Garden in Portland, Citizens Business Bank Arena in Ontario, CA, Key Arena in Seattle, Staples Center in Los Angeles and Valley View Center in San Diego.
With its $57 million equity investment in the entertainment and sports complex for Sacramento, Leiweke said AEG will be making its largest arena investment in any city in the country in its history.
“This group is the best at what they do – not only in this country, but in the world,” Johnson said. “They’ve committed as an operator and with nearly $60 million equity in the project. They are betting on Sacramento because they believe in our potential.”
Leiweke said AEG will make its money back on the deal through proceeds from selling the naming rights and sales of club boxes and suites.
“If we don’t do a good job at that, then this will be the first building in the history of AEG where we’ve lost money. Up to now, we’ve had a perfect record,” Leiweke said.
Leiweke said he anticipates the new facility will host approximately 150 events per year – similar to what the arena in Kansas City has done in the past year – and perhaps more because, unlike Kansas City, the Sacramento arena will have an anchor tenant in the Kings.
“In the industry, there are a lot of people betting against us, but we’ve never failed with an arena, ever – and it’s not going to start here,” Leiweke said. “I’ll bet on Sacramento, and I’ll bet on the mayor.”
Leiweke and the contingent from AEG will be in Sacramento until Wednesday when they head to Los Angeles for a meeting with NBA officials.
Melissa Corker is a staff reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.