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Mayor, Kings Owner In Court For Downtown Arena Lawsuit

Bob Moffitt / Capital Public Radio

Sacramento Mayor Kevin Johnson in the courtroom during a break in a case involving a lawsuit against the city on June 30, 2015.

Bob Moffitt / Capital Public Radio

The mayor of Sacramento and the majority owner of the Sacramento Kings were in court Tuesday.

The city and the team are the defendants in a lawsuit that claims city assets worth as much as $500 million were given to the team as part of a deal to build an arena.

According to Mayor Kevin Johnson, the assets are worth little today and are a small part of the $258 million the city pledged to the arena project.

"We got a great return on our investment," says Johnson, "and there were other opportunities for the Kings owners potentially to generate revenue, but there was no cost to the city."

The case seems to have come down to how the city defines the word "value" versus the word "cost." The plaintiffs in the case say the city gave away as much as $250 million in land, parking spaces and entitlements. 

According to plaintiff attorney Patrick Soluri, the current value of an asset should be considered on par with the potential value of city land that could be used for billboards.

"A $1.5 million income stream over 35 years to 45 years is a lot of money," says Soluri.

The Kings majority owner, Vivek Ranadive testified in the morning session the team was probably worth $350 million the day before a Seattle group offered $525 million.  

Even though Ranadive says the parking space and digital signs will help make up for the difference, he says he did not consider them when he decided to join the group.

"I was not incorporating city assets in models of purchasing the team," Ranadive says.

He says it came down to whether he was willing to give up a good thing as a minority owner with the Golden State Warriors and take a risk in Sacramento.

"I would have to risk a lot and give up a lot to pursue the purchase of the team," he says. "The act was a risk for me."

Ranadive says he had also tried to buy the New Orleans NBA franchise, but it was a half-hearted effort and he only did so after then-NBA Commissioner David Stern asked him to.

Ranadive says Stern came to him again in February of 2013 and asked him to join the ownership group,  which was expected to match the Seattle offer. 

The mayor of Sacramento testified in the afternoon. There are documents with notes in his handwriting that are part of this case.

They list the parking, land and entitlements that were transferred to the Kings. The plaintiffs argue that on some of those documents, Johnson added up the dollar amounts of the benefits and that should be counted as a cost.

On another, he wrote, "politically tough."

The mayor says he was only taking notes of what other people in meetings were saying and that at the time, he didn't understand half of the concepts being presented.

The city and Kings could face disciplinary action because of the mayor.

Judge Timothy Frawley sent a letter in June 2013 ordering all forms of communication -- texts, emails, notes either on city phones and email or on private phones and email -- be saved in anticipation of a trial.

The mayor says he continued to delete all texts he received "out of habit" and did not realize private texts were included in the judge's order. The judge will decide whether to levy sanctions against the defense.

Attorneys for the plaintiffs say the case could wrap up Thursday.

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