Dirt Cheap

Here’s the Kings’ deeper problem: real estate

By R.E. Graswich
December 2022

After 37 years, I’ve finally figured out the curse of the Kings. It’s all about real estate.

I’m not talking about a real estate curse that involves ancient Native American burial grounds.

For some Kings fans, the fictional image of bones beneath old Arco Arena explained why the team was so lousy.
The burial grounds theory collapsed when the team moved Downtown. If anything, the Kings got worse on K Street.

The real estate curse haunted the team’s ownership from the start. Since the Kings left Kansas City in 1985, they were run by men whose basketball wisdom was fogged by real estate. At some point, passion for dirt takes control.

The current owner, Vivek Ranadivé, was a Silicon Valley tech tycoon and electrical engineer when he bought the Kings in 2013. Today he’s a real estate guy.

The Kings and their private equity partners control big chunks of property. Their purchase of the River Cats baseball team, presented as a marriage of sports interests, isn’t about baseball. It’s about real estate. Buying the River Cats gives the Kings and their investors access to waterfront land in West Sacramento.

Ranadivé’s investments include 7 million shares of WeWork, a real estate company that lost about 85% of its value in the past 14 months. Vivek serves on the board of directors.

The real estate curse seems to have burrowed deep into Ranadivé.

Consider what he gave up to take control of the Kings (his stake is secret, but I believe he owns about 37%). When Ranadivé bought the Kings in 2013, the NBA required him to sell 7% of the Golden State Warriors. That seemed reasonable a decade ago.

Today the Warriors are worth three or four times more than the Kings. They have a bigger, newer, fancier arena overlooking San Francisco Bay.

Even worse, the Warriors have won four championships since 2015. It’s almost like they needed Ranadivé to leave before they turned everything around.

The real estate curse started with Joe Benvenuti, who purchased the Kansas City Kings and moved them west. He owned 50%. Gregg Lukenbill and several partners bought smaller pieces.

Lukenbill and his friends were dreamers. Benvenuti was a real estate guy.

The master plan for the Kings involved real estate, not basketball. Joe never attended an NBA game before he bought the team. He used the Kings as leverage to open Natomas for development.

Benvenuti knew if he showed up at City Hall with an NBA team and plans for an arena, the City Council couldn’t deny his application to rezone hundreds of agricultural acres for industrial development.

The scheme was simple. No entitlements, no team, no arena. The city rezoned the farmland.

When Benvenuti died in 2012, his estate included $600 million in warehouses, distribution hubs, call centers and offices. About half were within 2 miles of Arco Arena. The Kings were losers, but Joe didn’t care. He died a winner.

Next came Jim Thomas, who purchased the Kings in 1992. Thomas was a real estate guy. He built skyscrapers in Dallas and Philadelphia and especially Los Angeles, where he claimed four of the tallest buildings in the 1990s.

Thomas talked about developing commercial properties in Sacramento. He completed just one. Working with city officials to replace an old garage at 10th and I streets, he built the 25-story California EPA building. The tower was a success, but the Kings leaked money. Their failures prompted Thomas to sell.

When the Maloof family bought the team in 1998, they were small-time Las Vegas casino operators and beer distributors. They weren’t real estate developers. Unfortunately, they became real estate guys two years later when they built the Palms hotel and casino.

Within a decade, Palms and its adjoining towers buried the family financially and forced the Maloofs to sell their beer distributorship, hotel, condo tower, casino and basketball team in 2013.

Maybe Ranadivé can break the real estate curse, but I doubt it. He’ll have to go back to electrical engineering or tech. He’ll have to forget real estate. He blew it with the Warriors. Quitting real estate is his only hope.

R.E. Graswich can be reached at regraswich@icloud.com. Follow us on Facebook, Twitter and Instagram:

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