SACRAMENTO — Gerry Kamilos, the developer behind a bid to create a 4,800-acre business complex near Patterson, won the National Basketball Association's backing this week to build a new arena for the Sacramento Kings.
The NBA on Thursday endorsed his dramatic land-swap proposal that would move the State Fair to the Arco Arena site in Natomas and build a new arena and entertainment complex next to the downtown train depot.
The intricate proposal — involving three prime pieces of Sacramento real estate — was unveiled by a team of local developers, with international financiers and NBA executives at their side.
The concept, offered by Kamilos, a suburban Sacramento land developer, is the most spectacular of seven arena concepts submitted in response to a request from Sacramento Mayor Kevin Johnson.
Kamilos on Friday said the new endeavor would not hold up his work on West Park, his proposal to turn the former Crows Landing Air Facility into a business and industrial park anchored by a rail link to the port of Oakland.
"I've handled multiple large projects concurrently. It's not that unusual," he said.
That project is on hold while environmental studies are conducted and a lawsuit filed by the city of Patterson and a community group seeking to block proposal works its way through court.
Kamilos anticipates a decision in the case in March, which would enable him to start negotiating with Union Pacific about the rail line.
Keeping Kings in town
His NBA arena proposal answered a call for a new sports facility from Johnson, who in November called the 22-year-old Arco Arena outdated and warned that the Kings may jump town.
Details of the seven submissions were offered at a City Hall forum Thursday night. But the real action happened later a few blocks away at the Citizen Hotel, where Kamilos and NBA officials unveiled details of an ambitious land-swap concept involving Cal Expo, Arco Arena and an eight-acre piece of city-owned land at the downtown railyard.
NBA officials said they and the Maloof family, owners of the Kings, support the concept because it has what other proposals don't — private investors willing to put up money.
"We wouldn't be here today if (the Maloofs) didn't like it," NBA representative John Moag said.
The Maloofs issued a brief statement thanking the NBA and the mayor.
"We're committed to help any way we can," it said.
The land-swap plan has been in the works for nine months, Moag said.
It is nothing if not complex.
One of those involved, downtown developer David Taylor, called it a "jigsaw puzzle." It will require agreements among many parties, including the state, the city, the Kings and several private developers.
"My biggest concern is it has a lot of moving parts," City Manager Ray Kerridge said. But, he said, "It can happen."
It also appears, on first review, to require more of the Sacramento Kings than any previous arena proposal, and less of taxpayers.
The NBA's Moag said the Kings have agreed in concept to put $300 million into the project by signing a 30-year lease with $10 million annual rent payments.
The arena would be owned during that time by a private development group including developers Kamilos and Taylor and private cash partners.
That group would front the initial costs of an arena — an undetermined amount — with cash from the two key backers, financiers Macquarie Capital of Australia and Pacific Coast Capital Partners of California.
Nicholas Hann of Macquarie Capital said his company is willing to take the risk with cash upfront as well as selling bonds and obtaining loans to construct an arena because of the significance of the project and the money-making possibilities of the Sacramento market.
A critical factor in making the financing work, however, will be the development group's ability to make a deal with state officials to move the State Fair from Cal Expo.
The NBA's Moag said the development group, including the Kings, would seek to buy Cal Expo from the state, then donate the land at and around Arco Arena to the state to relocate the state fairgrounds.
Part of the Arco site is owned by the city, and part by the Kings. Moag said a $70 million loan the Kings owe the city would be retired in the deal but did not offer details.
The group, in its proposal called "The Sacramento Convergence," goes as far as suggesting state officials could turn Arco Arena into an expo hall.
Once the Cal Expo site is in private ownership, developers would build a suburban community of homes, offices and retail, as well as sell off some of the land to other developers — and create a cash flow to help pay off arena construction debt.
The Modesto Bee contributed to this report.