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Kings in dispute with city over arena costs
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The Sacramento Kings said Friday they are still committed to building a new arena in California's capital city despite disagreements over part of the funding.

Co-owner George Maloof said in a phone interview that he does not believe the team should pay $3.2 million in pre-development costs for the estimated $391 million downtown arena.

"It's pretty simple," he said. "We're playing the role of the tenant. We didn't feel like it would be appropriate to pay for pre-development costs as a tenant. On top of that, there was a clause that had the Kings paying for AEG's contribution if the project didn't happen so we'd have to pay them back. We didn't think that was fair and we still don't."

Maloof said the team brought up that issue when first presented with the term sheet for the agreement to keep the Kings in Sacramento, but Mayor Kevin Johnson said all sides agreed to the deal before a news conference in Orlando on Feb. 27.

Under the term sheet, the Kings and arena operator AEG each were to pay about $3.2 million in pre-development costs with the city paying the remaining $6.5 million. The City Council is scheduled to vote next Tuesday to approve its payment.

"The success of the new entertainment and sports complex depends on complete trust and partnership among all parties," Johnson said. "It was with that spirit that we all agreed to a deal in Orlando, including the Maloof family, who looked an entire room in the eye and promised their commitment to Sacramento. In light of the Maloof's promise, we fully expect all parties to live up to their commitments."

The NBA, which helped broker the deal, has agreed to pay about $200,000 to cover the costs until the Board of Governors meets April 12-13 to discuss the arena plan.

Commissioner David Stern said in a statement that the city, the Kings and AEG have been working to resolve the issue of pre-development expenses since the agreement was reached.

"Those discussions have stalled but I have advised Mayor Johnson that the NBA will advance pre-development expenses on behalf of the Kings pending our report to the NBA Board of Governors at its meeting on April 12-13," Stern said.

The Kings appeared determined to move to Anaheim last year before Johnson convinced the NBA to give the city one last chance to help finance an arena. The sides reached a non-binding agreement just before a March 1 deadline and the goal is to have the new arena ready for the season opener on 2015.

Maloof said he believes the sides can resolve the disagreement over the pre-development costs.

"I don't think it can hold up the whole project," he said. "It's our intention to try to work through all the issues and make sure everybody is comfortable, which is normal in any deal. This is just one of them. We always try to be as positive as possible that we can work through it. At the same time, we just don't feel it's appropriate the way it's written now."