The Sacramento Kings have plans to build a new arena at the Downtown Plaza site in Sacramento and open the facility by 2016, but they've run into a problem during the early phases of implementation and may need City Hall to provide some help. Negotiations have broken down between the new Kings ownership and a property owner at Downtown Plaza over the potential sale of a parcel where a building with a Macy's men's store currently sits, according to Ryan Lillis and Dale Kasler of The Sacramento Bee. The ownership group is preparing to ask City Hall to assist in the talks and provide the threat of eminent domain to move the process along.
Macy's plans to vacate the building this fall and relocate to the other end of the Plaza, but the property owner, the New York-based Island Capital group, has walked away from the negotiating table. No eminent domain lawsuit has been filed, but the mention of invoking the city's power is being used as a negotiating tactic. The decision to file a lawsuit could slow down the entire process of building an arena at the site, as the issue would take time to move through the court system, which is why Tom Ziller of Kings blog Sactown Royalty is focused on the leverage the team gains through this process:
The Bee reports that the Kings have promised to pay any costs incurred by city staff working on this issue, and of course eminent domain itself would lead to the property owner getting paid. The Kings will cover all of that. This is really an arrow that the team can line up to put a bit more pressure on the landowner, who -- without a tenant in a couple months, and with no chance another tenant will move into that space at this point -- is just trying to wring a few more dollars out of the Kings. The team's fighting back.
As noted in the report, Sacramento did sue a property owner in 2008 in an eminent domain case over his refusal to sell nine downtown parcels the city was seeking for development. That case was settled eight months after the time of the filing, with the owner receiving $18.6 million for the properties. In essence, eminent domain cases require the government to prove there is a public necessity for condemning property where an owner is standing in the way of a project intended for public use. The owner has the right to dispute the condemnation and the right to be compensated for any taking.
With the plans to build a new arena already in place, the threat of an eminent domain case may be potent enough to assist the Kings in their current talks. It shouldn't take too long to find out whether this development jump starts the negotiation process.