Kings owners ask city to possibly use eminent domain threat in arena site talks

[Fear the Putin]

http://www.sacbee.com/2013/08/09/5636062/kings-owners-ask-city-to-possibly.html#mi_rss=Kings/NBA

Kings officials said Thursday that they anticipated seeking the city's help in negotiating a purchase of the building that houses a Macy's men's clothing and furniture store from a New York-based real estate firm that took control of the property in foreclosure last year. Under an agreement scheduled for a vote before the City Council on Tuesday, the Kings would reimburse the city for all costs incurred in the process.

Macy's, which is the building's tenant, said Thursday it plans to vacate the property this fall and move the men's and furniture operations to the women's store at the other end of the mall.

One tool the city could use to persuade Island Capital and its subsidiary, C-III, to sell the store at 600 K St. is eminent domain, a rare – but not unprecedented – method employed in the past by City Hall in the ongoing push to revamp downtown. The decision to file an eminent domain lawsuit would require City Council approval.

Seems like Island Capital is trying to squeeze every last penny from the Ranadive group.

 

[Trueblood]

This is definitely a leverage ploy by Island to get as much as they can out of the sale.

Not sure if Eminent domain can be claimed though. I followed the Brooklyn situation closely and the Barclays Center itself isn't what qualified for eminent domain but rather the affordable housing tower that will be built in the near future next to the arena. Affordable units are considered a "public good" so Ratner and Prokhorov were able to bulldoze Goldstein's crib in order to make room for Barclays and the rest of the buildings that are part of Atlantic Yards.

OTOH, that's New York. California may have an entirely different set of rules when it comes to eminent domain but knowing how anti sports we are here on the left coast, I have to think that the arena itself won't qualify.

 

[kennadog]

This is definitely a leverage ploy by Island to get as much as they can out of the sale.

Not sure if Eminent domain can be claimed though. I followed the Brooklyn situation closely and the Barclays Center itself isn't what qualified for eminent domain but rather the affordable housing tower that will be built in the near future next to the arena. Affordable units are considered a "public good" so Ratner and Prokhorov were able to bulldoze Goldstein's crib in order to make room for Barclays and the rest of the buildings that are part of Atlantic Yards.

OTOH, that's New York. California may have an entirely different set of rules when it comes to eminent domain but knowing how anti sports we are here on the left coast, I have to think that the arena itself won't qualify.

Having been on the government side of development deals, I can tell you that there are always bumps along the way. Its often a pain in the neck, but most developments look a lot different from proposal to shovel in the ground. But my projects always involved many layers of funding, including multiple levels of government programs, so they were actually far more complicated. The were just a lot smaller.

The Macy's Mens' store thing is a bit of a bother. Especially since the store will be vacant come September anyway. I think the owner of the site is seeing huge dollar signs. Maybe just the threat of eminent domain will urge them to make a deal.

As pointed out, the city successfully used it to pry a bunch of property, near the downtown plaza,from Moe Mohanna. And a lawyer stated this about CA law:

Nick Hornberger, a Los Angeles lawyer who specializes in defending property owners against eminent domain cases, said the city will need to "establish a public necessity for taking this property." But, he added, "the city will probably be able to condemn the property," given that it plans to construct an arena at the site.

"That's the classic use of eminent domain – the property owner standing in the way of a project for public use," he said. "It's kind of hard to fight that."

Read more here: http://www.sacbee.com/2013/08/09/56...-possibly.html#mi_rss=Kings/NBA#storylink=cpy

The issue really is, how long could that delay things. A critical issue. Note however, that this issue can't stop the arena from being built. They have enough land to build the arena. They want it for other development around the arena. I suspect they'd like to push the arena east to abut 5th street and the light rail line. Its a much more visible spot and one that I think is better.

 

[whozit]

This is definitely a leverage ploy by Island to get as much as they can out of the sale.

Not sure if Eminent domain can be claimed though. I followed the Brooklyn situation closely and the Barclays Center itself isn't what qualified for eminent domain but rather the affordable housing tower that will be built in the near future next to the arena. Affordable units are considered a "public good" so Ratner and Prokhorov were able to bulldoze Goldstein's crib in order to make room for Barclays and the rest of the buildings that are part of Atlantic Yards.

OTOH, that's New York. California may have an entirely different set of rules when it comes to eminent domain but knowing how anti sports we are here on the left coast, I have to think that the arena itself won't qualify.

There is a history of "eminent domain" being abused. However, the potential revitalization of downtown is probably enough to pass the smell test.

 

[Trueblood]

Having been on the government side of development deals, I can tell you that there are always bumps along the way. Its often a pain in the neck, but most developments look a lot different from proposal to shovel in the ground. But my projects always involved many layers of funding, including multiple levels of government programs, so they were actually far more complicated. The were just a lot smaller.

The Macy's Mens' store thing is a bit of a bother. Especially since the store will be vacant come September anyway. I think the owner of the site is seeing huge dollar signs. Maybe just the threat of eminent domain will urge them to make a deal.

As pointed out, the city successfully used it to pry a bunch of property, near the downtown plaza,from Moe Mohanna. And a lawyer stated this about CA law:


Read more here: http://www.sacbee.com/2013/08/09/56...-possibly.html#mi_rss=Kings/NBA#storylink=cpy

The issue really is, how long could that delay things. A critical issue. Note however, that this issue can't stop the arena from being built. They have enough land to build the arena. They want it for other development around the arena. I suspect they'd like to push the arena east to abut 5th street and the light rail line. Its a much more visible spot and one that I think is better.

This is starting to look a lot like the Brooklyn situation. Daniel Goldstein was the last holdout who lived on the site that eventually became Barclays Center. He was the #1 activist against the arena and wanted to keep his condo but he also knew, like the owner of the Macy's men's store, that he could hold out and get a large pay day. The only problem was eminent domain. The affordable housing qualified for eminent domain so he was left with less leverage than he thought.

But then along came Prokhorov, buying the Nets and flashing big bucks. Goldstein could've held on a little longer but he wouldn't have gotten as big a pay day. Here's why. The Nets were losing money in New Jersey and realized that the sooner that they could move into Brooklyn, the better. You're literally talking the difference of $50 to $100 million in revenue so Prokhorov paid Goldstein over $3 million for his condo despite it being worth just a tad north of $1 million. A short term loss of $2 million is nothing when you can make over $50 million by moving into Brooklyn in 2012 as opposed to waiting 'til 2013 on a Goldstein holdout. And it obviously made sense for Goldstein to take the $3 million since the average Joe can't afford to just throw away almost $2 million to make a point. He already delayed the arena by 5 years and made his point for future eminent domain cases. Now he kills 2 birds with one stone by taking massive payout.

In Sacramento, the owner's of the Macy's store are like Goldstein only they seem to be purely in it for the money as opposed to making a point like Goldstein claimed to be doing. And the city and the Kings are under pressure to get the ball rolling as well only with them, it's not so much about the extra money they can make downtown as opposed to STA but rather beating the 2017 deadline that the NBA has in front of them. Only I don't think that's a hard deadline when you consider that the league is on Sacramento's side. If they can show that enough progress has been made, I think a January of 2018 opening may be enough to make them look the other way but I don't want to see that. They need to keep their eye on the 2016 opening.

 

[Siranthony]

I wonder if Hansen has anything to do with this. There's an article on sonicsrising insinuating the Kings lied about development land and Hansen is just as true blue and truthful as they come. We also have this law firm in LA trying undermine the arena also. It's really sad we seem to have all these forces trying to remove our team. Seattle will get they're team eventually. It's not Sacramento's fault they lost the one they had. Hang in there Sacramento!

 

[Warhawk]

I wonder if Hansen has anything to do with this. There's an article on sonicsrising insinuating the Kings lied about development land and Hansen is just as true blue and truthful as they come. We also have this law firm in LA trying undermine the arena also. It's really sad we seem to have all these forces trying to remove our team. Seattle will get they're team eventually. It's not Sacramento's fault they lost the one they had. Hang in there Sacramento!

I strongly doubt Hansen is involved in any way. They seem to be on the expansion track and any actions like this (meddling in an existing market after the team has been purchased by a new ownership group) might sink their chances at landing a team in the future.

The ownership group owns all the land they need for the arena itself. The parcel being discussed would be used for additional/related development or would allow some leeway for moving the arena location around a bit depending on how they want the site developed. But they absolutely have all the land REQUIRED for putting an arena on the site.

 

[Section 101]

I strongly doubt Hansen is involved in any way. They seem to be on the expansion track and any actions like this (meddling in an existing market after the team has been purchased by a new ownership group) might sink their chances at landing a team in the future.

The ownership group owns all the land they need for the arena itself. The parcel being discussed would be used for additional/related development or would allow some leeway for moving the arena location around a bit depending on how they want the site developed. But they absolutely have all the land REQUIRED for putting an arena on the site.

I believe they prefer to have the ESC on the Macy's site, but it can be located at the current holdings.