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Anaheim City Council approves $75 million in bonds to lure Sacramento Kings to Honda Center

The bonds will be privately backed by three companies of Ducks owner Henry Samueli. Anaheim Mayor Tom Tait says it's a 'historic' day.

March 29, 2011|By Lance Pugmire
  • Fan Kevin Fippia, shows his support for keeping the Kings in Sacramento during a game against the Portland Trail Blazers on March 2.
Fan Kevin Fippia, shows his support for keeping the Kings in Sacramento… (Rich Pedroncelli / Associated…)

The Anaheim City Council on Tuesday unanimously approved $75 million in privately backed bonds to "set the table" for the NBA's Sacramento Kings to make Honda Center their new home next season.

The bonds will be backed by three companies of Henry Samueli, the Anaheim Ducks' owner and Honda Center operator, and are designated to pay for relocation fees the Kings will need to pay the NBA, along with improvements to Honda Center.

Anaheim Mayor Tom Tait called the meeting "historic" at its opening, and said after the vote he was "stoked" by the council's action. Council member Harry Sidhu said an NBA team's arrival will be "a great economic engine for all of us."

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City officials insisted no taxpayer money will be needed to back the bonds and that any shortfall in repayment generated by arena revenue would be paid by Samueli.

"It's a Samueli entity lending money to a Samueli company; the city has no liability and is a conduit [as the arena's owner]," Tait said during the meeting. "I wanted to drive that point home: There's no risk."

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Tait assured the team would "fill the stands of the Honda Center," by drawing upon 3 million people in Orange County and millions more in San Bernardino, Riverside, Los Angeles and San Diego counties. The team likely will be named the Anaheim Royals.

Work remains in the Kings' relocation effort, including a formal application to move due to the NBA Board of Governors by April 18, with a presentation likely to be made by Kings owners Joe and Gavin Maloof at the board's April 14-15 meeting in New York.

A majority of the 29-member Board of Governors will have up to 120 days to approve the relocation, and the move to Anaheim would then have to be finalized by NBA owners within 30 days of the Board of Governors' approval.

The bonds are only effective if the Kings and Honda Center managers strike a venue contract within 180 days.

"We are grateful to the entire leadership group of the city of Anaheim, who tonight fully endorsed our shared efforts to bring an NBA franchise to the region," Anaheim Arena Management Chairman Michael Schulman said in a prepared statement.

Experts close to the situation but unauthorized to comment publicly about it say a likely window for Anaheim approval is after the NBA Finals in mid-June and before the league's collective-bargaining agreement with players expires July 1.

Tait dismissed the threat of legal challenges to the Kings' move because of the team's $70-million debt to Sacramento, including Senate President Pro Tem Darrell Steinberg (D-Sacramento) saying Tuesday he is weighing the possibility of trying to block a move unless the Kings repay the loans.

The mayor also didn't feel the need to apologize to Sacramento fans.

"We've been wanting an NBA team for 20 years, we're very excited about it," Tait said. "Most teams — the Kings, the Lakers, the Clippers — have come from a different city."

Honda Center is compiling a prioritized list of fans interested in "NBA relocation and ticket opportunities," asking the public to email in their names and phone numbers to waitlist@hondacenter.com.

lance.pugmire@latimes.com

twitter.com/latimespugmire

Times staff writer Patrick McGreevy contributed to this report.

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