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Why Anaheim Residents Ought To Be Worried About Secretive Arena Funding

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I hope this doesn't come off as trolling, and certainly few Anaheim residents who aren't NBA fans will ever see this post. But for those of us following the Sacramento Kings relocation story with particular interest, I thought it'd be worth laying out why fears by Anaheim residents in the face of a secretive measure to extend funding for Honda Center upgrade are founded.

From today's Orange County Register:

While evidence is mounting that Anaheim officials are indeed trying to help get the Sacramento Kings to move here, word that the City Council is considering approving funding to upgrade the Honda Center has confused and angered some residents.

"Aren't we already facing a huge deficit?" resident Nathan James asked in an e-mail. "What sense does it make to spend more money, especially when this area already has two pro (basketball) teams?"

By all accounts, the Anaheim City Council would not be directly funding the upgrades. So cash would not come from city coffers to build Francisco Garcia's locker or Joe Maloof's carport. The city would issue bonds to investors; profits from the Honda Center would pay back the investors. The city is the middle man.

But this relies on the Honda Center making a profit, which it has reportedly struggled to do. The Kings -- a second anchor tenet, to go with the Ducks -- are supposed to help. The Kings, however, are awful, and there's no fan mandate in Anaheim for a third area NBA team. What if the Kings struggle mightily in Anaheim? What if they -- a family with great signs of financial wear and tear, and a company in MS&E that many feel is years away from insolvency -- fail to boost Honda Center's revenues enough to pay back bondholders? What if the Maloofs and their degrading entertainment empire wilt in the Entertainment Capital of the World, and drag Henry Samueli and the Honda Center down with them?

It's essentially the same situation as the city of Sacramento currently faces with the Maloofs. The city loaned the Kings money directly in the late 1990s, with ARCO Arena and a $25-million stake in the team as the collateral. If the Maloofs default on the loan, the city of Sacramento is kinda screwed and residents will suffer with reduced services. If the Honda Center can't make good on its bond debt, the city of Anaheim is kinda screwed, and residents will suffer with reduced services.

Now, odds are that the Honda Center won't fail, that with a second anchor tenant it will in fact thrive and pay back bondholders on time, no problems. But there's a chance (however small) it could gowrong, and given how secretive the city and the protagonists have been, the residents have every right and duty to ask questions. I'm not being selfish when I say I hope this decision gets a complete airing in Anaheim. I'd want the same in Sacramento, even if it hurt the city's chances of keeping the Kings.

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In case you're wondering, we are indeed at that point of the season where we herald victories and completely ignore devastating defeats.