Negotiators for the National Basketball Association and Cal Expo on Friday announced they'd reached an agreement to move forward jointly on a plan to build a Kings arena in the state fairgrounds.
According to a letter of understanding, which still must be approved by the Cal Expo board of directors, the NBA would shoulder the majority of the costs over the next 180 days as the two parties work together on a development plan that would accommodate both an arena and a revamped fairgrounds.
The parties plan to ask developers to submit proposals for turning the 360-acre fairgrounds into a mixed-use and entertainment development.
Cal Expo's board is scheduled to consider the letter of understanding at its May 21 meeting. Both NBA Commissioner David Stern and former Gov. Pete Wilson, the lead negotiator for Cal Expo, plan to attend.
The Maloofs, who own the Kings, are scheduled to be briefed by phone on the progress next week, said spokeswoman Donna Lucas. "They continue to be very supportive and appreciative of the work the commissioner and the NBA have been doing on the issue," she said.
The agreement is not legally binding, but representatives of both the NBA and Cal Expo said it represents a significant step forward. They cautioned that major challenges lie ahead, however.
"We wouldn't be doing it if we didn't think there was a more than fair chance it could be done, but recognizing that it's not a slam dunk," Stern said Friday.
Negotiators for both sides said they were confident enough that they could come up with a mutually acceptable development proposal to move to the next step -- crafting an actual plan and finding a developer to design and build it.
Wilson said Friday that negotiations thus far have led him to be "optimistic that it may lead to something really important for the city, and the state and for basketball fans, and ultimately for the people who are the daily inhabitants ... of this development."
The goal is to attract a developer that can both build a 17,000- to 20,000-seat arena and revamp the tired fairgrounds -- without using taxpayer dollars.
"We're going to squeeze these numbers every way possible," Stern said in a telephone interview.
Such a development -- which could include retail, office or housing -- would have to produce enough profit to pay for the arena and fairgrounds update, two items that could easily cost $650 million, based on past estimates.