As Sacramento takes its last shot at keeping the Kings from moving to Seattle, Sonoma resident and power broker Darius Anderson has emerged as a key player in assembling the investor team behind a $448 million offer to buy the NBA franchise and build a new downtown sports arena.
The influential Sacramento lobbyist and associate of billionaire investor Ron Burkle recounted Wednesday how he became part of the investment group that last year bought Sacramento's aging Downtown Plaza mall with an eye toward making it the Kings' new home. He was the spokesman for the group at a City Council meeting this week.
Anderson said his role has been to pull together the team of investors hoping to purchase the team, build the sports and entertainment complex and revitalize downtown Sacramento in the process.
"Like every little kid, growing up I always dreamed about being a sports owner and being involved in professional sports," said Anderson, a principal of Sonoma Media Investments, which owns The Press Democrat.
This most recent development is not a winning shot for Sacramento. The city's proposal remains in competition with a well-financed bid from investors whose intent is to relocate the franchise to Seattle. NBA owners will decide which city gets the Kings at their meeting next month.
Anderson is a self-described "huge sports nut" and longtime Kings season-ticket holder who previously lived in Sacramento and has many close friends in the city. His Platinum Advisors, the fourth-largest lobbying firm in the state in 2012, is just blocks away from the mall on K Street.
Anderson said he didn't start out trying to keep the Kings in Sacramento. Two years ago, when it seemed likely the Maloof family would move the team to Anaheim, Anderson said he initially got a few investor friends together to try to bring a new franchise to Sacramento if the Kings left.
They raised about $35 million and Burkle was on board with that effort when Mayor Kevin Johnson outlined another game plan. Johnson, a former NBA star, said he wanted to find a way to keep the Kings in Sacramento. In 2011 he appealed to the NBA Board of Governors to give the city time to prepare options for doing so.
Johnson made an impassioned plea about the team's importance to the community, Anderson recalled. "Any owner that heard that speech could not have said no to the guy," Anderson said.
They won an extension from the NBA and the Maloofs agreed to stay another season. Johnson began pursuing the development of a new arena in the Sacramento Railyards area, a 240-acre redevelopment project on the site of the former Union Pacific rail yards.
Concerned that the rail yards project wouldn't be available quickly enough, Anderson turned his attention to the aging Westfield mall. Aware that sports arenas like the Staples Center in Los Angeles and AT&T Park in San Francisco have been catalysts to revitalizing downtown areas, Anderson said he became convinced a Kings arena could provide an equally potent economic boost to stagnant downtown Sacramento.
He said took the concept to Todd Chapman at JMA Ventures, a San Francisco-based real estate investment and development company, and the deal closed in August of 2012. Anderson said he is an investor in the $22 million purchase.
They were working on a development plan for the property with Burkle, who "liked the real estate play," Anderson said, when the news came in January that the Maloofs had agreed to sell their majority state to a Seattle group led by hedge fund manager Chris Hansen and Microsoft Chief Executive Steve Ballmer. The group reportedly struck a deal to acquire a 65 percent stake in the team for $341 million. "That forced our hand," Anderson said.
Anderson's investor group has been scrambling ever since to pull together the most compelling proposal possible. Major investors include supermarket tycoon Burkle, 24 Hour Fitness founder Mark Mastrov, Silicon Valley entrepreneur Vivek Ranadive and the Jacobs Family of San Diego, founders of Qualcomm.
The plan calls for an 18,500-seat downtown arena also could also host concerts and other entertainment. The development would include 475,000 square feet of office space, 300,000 in retail space, 250 hotel rooms and 600 housing units.
On Tuesday, the Sacramento City Council signed off 7-2 on a public-private partnership to build the arena on the mall site.
The non-binding "term sheet" approved by the council calls for the city to spend $258 million, including $220 million mostly raised through bonds backed by future public parking revenue, plus $38 million in land, including city owned parking lots around the mall. The balance, $190 million, would come from the investor group.
The city would own the complex and would lease it back to the Kings under a 35-year non-relocation agreement with two five-year extensions.
Anderson said if the NBA chooses the Sacramento deal over the Seattle offer, he will be part-owner of both the team and the related real estate development.
He declined to specify what percentage he or other members of the investor group would own of the team, noting it is possible additional investors will be brought into the fold.
The deal is "100 percent better" for the city than the previous plan for the rail yards, with more protection for taxpayers, Anderson said.
Some critics have questioned whether taxpayers should be investing so much a sports arena, noting that Stockton took on significant debt for sports facilities and is now bankrupt. Critics also say they haven't had enough time to crunch the numbers to fully understand the risk to taxpayers.
But Anderson said with the loss of redevelopment funds, cities have "got to get creative" in finding ways to boost economic growth and clean up blighted areas.
"Often times government has to invest in a public-private partnership to help stimulate the economy," Anderson said.
The investment group plans to make a presentation on April 3 to a committee of NBA owners in New York that also will weigh the Seattle offer. All the owners will then meet April 18 for the final say. "We believe we have a good shot," Anderson said.
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