Sources: Sacramento Kings may move to Virginia Beach, arena deal in the works
Posted: August 23, 2012
By Philip Newswanger and Bill Cresenzo
The owners of the Sacramento Kings, an NBA franchise, and officials from Philadelphia-based Comcast-Spectacor are expected to be in Virginia Beach Tuesday to propose moving the team to the resort city and for Comcast to help build and lease a new pro sports arena.
A deal between the Maloof family, which owns the Sacramento Kings, and the city of Sacramento for a $391 million entertainment complex fell apart three months ago and it has been reported that the owners are looking for a city for their franchise.
Media giant Comcast will guarantee a 25-year lease on a new arena, supposedly for naming rights and for broadcasting the games, sources said. Comcast owns NBC and Global Spectrum, which operates arenas and stadiums across the country including the Ted Constant Convocation Center at Old Dominion University.
City officials and the Maloof family are expected to announce Wednesday that the Kings will land in Virginia Beach, sources said.
Virginia Beach-based Meridian Group, a marketing communications firm, is expected to handle the public relations for the announcement.
To finance the arena, the Virginia Beach Hotel-Motel Association has indicated it would support a $1 hike in the lodging tax, sources said.
In addition, the Atlantic Coast Conference has agreed to place Virginia Beach on its list as a future venue for college ACC conference tournaments.
A well-known concert promoter â Live Nation â is associated with the deal for the new arena and the teamâs relocation to Virginia Beach, sources say.
The new arena will be built across from the Virginia Beach Convention Center, adjacent to the former Norfolk Southern Corp. rail track and a proposed site for a light rail station.
âComcast, Live Nation and Global Spectrum have come to the city,â Virginia Beach Mayor Will Sessoms said. âThey would guarantee us a professional sports team" if the deal goes through.
He said the arena would draw people to the area year-round. He would not confirm what team could move to the area, but added that a related project, a multi-star convention center hotel, âwould probably be built by owners of the team.â
âI think the greatest thing coming out of this is that Comcast and Live Nation are for real,â Sessoms said.
Kevin Johnson, the mayor of Sacramento and a former NBA standout, has tried to keep the Kings in his city. The Maloofs have said they no longer trust Johnson and donât want to work with him, according to ESPN in April, prior to the deal collapsing.
âYou canât do a deal with somebody you donât trust,â George Maloof Jr. said, according to The Sacramento Bee. âI donât trust him.â
Maloof said last week, âWe have been approached by several cities over several years about moving the  Kings and we will not comment other than that.â
Amid negotiations over the new entertainment complex in Sacramento, elected officials representing the city criticized the Maloofs, saying theyâve turned their backs on the city late in the game, the ESPN article said.
Chris Lehane, executive director of Think Big, the committee formed by Johnson to retain the Kings, compared dealing with the Maloofs to dealing with one of the worldâs most inscrutable and widely criticized governments. Lehane, who stepped down from his position in June, at one point, asked U.S. Attorney General Eric Holder to investigate the Maloof brothers, according to a USA Today report.
Eric W. Rose, the Maloofsâ spokesman, said: âIt is becoming clearer that the foundation of Think Big is built on fabrication and deception. The name of the organization should be changed to Think Big Fraud,â the USA Today article said.
The Kingsâ standing in the western conference was the second worst behind the New Orleans Hornets for the 2011-2012 season.
The Kings have played at the Power Balance Pavilion, the Kingsâ home since 1985, formerly known as ARCO Arena.
But the Maloof family has complained that the arena wasnât suitable and demanded a new entertainment complex from Sacramento. The proposed city-owned complex would have been funded mostly by issuing a parking lease to a private vendor. Anschutz Entertainment Group would have been the operator.
The Maloof family also owns a stake in the Palms Casino in Las Vegas as well as Maloof Productions and Maloof Music.
Hampton Roads has sought professional league sports in the past including major league baseball, hockey and the NBA. In the late 1990s, Norfolk almost became home to a National League Hockey team, but the expansion team ended up in Raleigh.
George Shinn, the owner behind the hockey league team, also considered Norfolk as a site for the Charlotte Hornets in 2002.
The team ended up in New Orleans.
About the Maloofs
The Maloof siblings â George Jr., Joe, Gavin, Adrienne and Phil â own the KIngs. From New Mexico, the family began building its business when it started distributing Coors beer in the 1930s. The familyâs patriarch, George Sr., died in 1980.
The matriarch of the family, Colleen Maloof, is the chairman of the board of the Maloof Cos. and the trustee of the Maloof estate.
George, Gavin and Adrienne are the most high-profile of the clan, appearing in music videos and on television shows, like Donald Trumpâs âCelebrity Apprentice.â
âGeorge (Jr.) is the leading force behind the building and operation of the hottest property in Las Vegas, the Palms, which is owned by the Maloof family, and has become one of the most sought-after destinations in the entertainment capital of the world,â his biography on NBA.com states.
His brother, Joseph Maloof, is the president of Maloof Cos. and oversees a workforce of 3,500. Phil Maloof is a former senator in New Mexico and is executive vice president with Maloof Cos. Adrienne Maloof-Nassif heads the marketing and advertising end of the Maloof Cos. She also appeared on âThe Real Housewives of Beverly Hills.â Reports say she is worth $300 million. Gavin Maloof is vice chairman of Maloof Cos. He became the youngest owner and operator in professional sports when he became owner of the Houston Rockets when he was 24.
About Comcast
Comcast, founded in 1963 and based in Philadelphia, is best known as the countryâs largest cable television, phone and Internet service provider. It reported second quarter 2012 revenues of $15.2 billion and revenues of $30.1 billion for the first six months of 2012. The company owns  NBCUniversal and a division called Comcast Spectacor, which owns and manages sports and entertainment arenas across the country, including the Wells Fargo Center in Philadelphia and the Ted Constant Convocation Center in Norfolk. Comcast Spectacor is also the parent for several arena-related companies  that provide food, vending and ticket sales services and also owns the Philadelphia Flyers, a National Hockey League Team.
What it could mean for Virginia Beach
If the deal goes through, a sports arena and a major league sports team such as the NBAâs Kings could be the catalyst that sparks several projects that have been in discussion for Virginia Beach over the last few years. Such projects include:
⢠Construction of a headquarters hotel for the Virginia Beach Convention Center. City officials have said a headquarters hotel will increase the number of groups that would come to meet at the center.
⢠An entertainment complex at the old Dome site. Officials have been working to bring in an entertainment venue to help the tourism industry as well as enhance the quality of life for local residents.
⢠Expansion of light rail from Norfolk to Virginia Beach. The city has a referendum on the November ballet on light rail expansion. Property that the city owns â tracks once used by Norfolk Southern â are across from the convention center, where plans are expected to be announced for a sports arena.
⢠Development of Rudee Inlet has been a long-time goal for the city.
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Philip Newswanger
WEBSOURCE: www.INSIDEBIZ.com
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