In early April, the state of California was scrambling to find space to put thousands of hospital beds in anticipation of a surge of COVID-19 patients, and the Sacramento Kings had a big, empty arena north of downtown that seemed like an ideal spot.
In an interview with The Sacramento Bee on April 3, Matina Kolokotronis, chief operating officer of the Kings, said her boss, the team’s owner, Vivek Ranadivé, called her and said, ‘What about offering the arena?’ ”
“He asked how we could use our platform to do good.”
Turns out Sleep Train Arena, the team’s home in Natomas until 2016, is coming at a cost to taxpayers. The state is paying the Kings $500,000 a month for use of the facility for three months, though the team has donated the use of adjacent practice facility.
The expenses are detailed in a state contract The Bee obtained after filing a request under the California Public Records Act with Gov. Gavin Newsom’s Office of Emergency Services.
The contract — signed quietly and without public announcement — now raises questions about the expenditure of taxpayer money to enrich an NBA franchise that paid its top player Harrison Barnes $24.1 million in 2019. The Kings are owned by a wealthy group of investors that includes Ranadivé, a software multi-millionaire.
No mention of the financial arrangement was made on April 6, when Newsom stood on the empty floor of the Kings’ former home and praised Ranadivé for his generosity for opening up the arena and for other donations through the Kings’ charitable foundation, which included 100,000 masks.
“We wouldn’t be here without him and without his support,” Newsom said. “It’s just an example of people all stepping in to meet this moment head-on.”
The Kings contract is among a handful the state has signed in an effort to build field hospitals to handle a possible surge of COVID-19 cases. In San Luis Obispo County, the Cal Poly Recreation Center is now a makeshift hospital, set to take in as many as 930 patients. The agreement states there is no cost to the county for rent.
Brian Ferguson, a spokesman for Cal OES, said Friday there was no intent to deceive the public about the contract between the Kings and the state.
The arrangement with the Kings “is consistent with what’s being done at the other sites,” Ferguson said. “We are paying a consistent rate at all the alternative (hospital) sites.” He added that the Kings have made available the team’s old practice facility, a separate building next to Sleep Train, at no charge.
If the temporary hospital at the Sleep Train complex were fully occupied, the rate “would work out to $41 per night per guest, which for hospital care is a pretty nice price,” he added.
The Sleep Train site was quickly refurbished to accommodate 400 patients. Ferguson said “a small number” of patients have been moved into the arena. The site is part of the state’s efforts to create 20,000 additional beds outside of medical facilities to address a COVID-19 surge.
In a statement, the Kings said they were “incredibly proud of our public-private partnership to operationalize the team’s former home in Natomas in record time.” They said the lease agreement is “consistent with other similar alternate care facilities that have been created to support the growing medical needs of the COVID-19 crisis across California.”
“Our intent was, and is, to continue to use our platform for good and to help support our community,” the spokesperson said.
NEWSOM: ‘I’M SO VERY GRATEFUL’ FOR KINGS
The contract with the California Department of Public Health was signed on behalf of a Kings affiliated company, SBH Natomas LLC, by the team’s senior vice president and general counsel Jeffrey Dorso
The agreements say the state will pay $500,000 a month, plus utilities, through June for use of the facility for a total of up to $3 million.
Newsom said at the arena in early April that Ranadivé offered up the facility “before we even asked.”
“The fact we’re here in such a short period of time and already seeing the construction is testament to your support and to the spirit that you have advanced,” Newsom said. “So I’m very very grateful to you.”
Ranadivé stood at the podium and praised Newsom in turn and said: “The Sacramento Kings have always believed it’s bigger than basketball and if we can use our platform to impact the world in a positive way and make a difference then that’s what we need to do.”
“The city has always been there for us, and we will be there for the city in any small way that we can,” Ranadivé said. “This where we’re standing right now is actually one of the iconic venues in sports history. This is actually where LeBron (James) played his first game, and now it’s going to be taking care of Californians. Its history of big moments continues. We thought we were done with this arena when we moved out, but in fact, the arena still lives on and hopefully will play its part contributing to the state.”
On Thursday, Legends, a sports arena food concessionaire that handles concessions at Golden 1, announced it will provide meals to staff and patients at the Sleep Train hospital site. The food will be prepared at Golden 1 Center’s kitchen facilities. The financial terms of that deal weren’t disclosed.
CITY SUBSIDY FOR GOLDEN 1 CENTER
Ranadive, who made hundreds of millions of dollars in the software business in Silicon Valley, is the leader of a group that bought the Kings in 2013 from the Maloof family. Other owners include Paul Jacobs, former chief executive of San Diego tech giant Qualcomm; and Sacramento developer Mark Friedman, whose family owns Arden Fair mall.
The city of Sacramento gave the new owners a $255 million subsidy to help build Golden 1 Center. The subsidy included several parcels of city-owned land, including land adjacent to Sleep Train, formerly known as ARCO Arena.
In response to the COVID-19 crisis, the Kings Foundation announced it also had donated $250,000 to community organizations providing food services and other essential needs of vulnerable people in the Sacramento area.
The Kings said they were planning to donate 100,000 medical masks to state and local agencies that need them. Separately, individual players and employees have donated to coronavirus efforts; general manager Vlade Divac and two players teamed up to send ventilators and other equipment to their native Serbia.
When the pandemic began shutting down much of the economy, including the Kings’ season, the team said it would pay hundreds of furloughed team employees through the end of March.
A week ago, Kings players and other NBA players agreed to a 25 percent salary cut. The Kings’ player payroll for the full season is an estimated $118 million.
At the same time, the Kings have lost millions of dollars in ticket sales from Kings games and concerts that have been canceled at Golden 1.
Jon Coupal of the Howard Jarvis Taxpayer Association said billions of dollars in taxpayer funds are being spent across the country on the fight against COVID-19, with limited transparency and oversight. He said when this is all over, there needs to be a major accounting to ensure the money didn’t enrich those who didn’t need it or that it went to waste.