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APPROVE TEAM LEASE AGREEMENT BETWEEN BASKETBALL DEVELOPMENT LLC AND THE CITY OF STOCKTON FOR THE USE OF ADVENTIST HEALTH ARENA AS THE HOME COURT FOR THE STOCKTON KINGS
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution:
1. Authorizing the execution of a new lease with Baskebtall Development LLC (Sacramento Kings) for their G League team (Stockton Kings) to use the Adventist Health Arena for their home games.
2. Authorizing the City Manager to exercise available options to extend the term of the lease by written amendment, not to go beyond the term stated in the lease.
3. Authorizing the City Manager, or designee, to take all the necessary and appropriate actions to carry out the purpose and intent of this resolution.
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Summary
The Sacramento Kings have expressed their interest in continuing to use the Adventist Health Arena for their Stockton Kings’ NBA G League (Stockton Kings) home games. The previous lease, executed in 2018, was in good standing but expired in April 2024. The City is seeking to enter a new three-year lease between the City and Sacramento Kings, with three additional one-year options to renew the lease (Exhibit 1), ensuring the continuation of high-level basketball entertainment in Stockton.
DISCUSSION
Background
The Stockton Kings are a basketball team in the NBA G League. The NBA G League serves as the official minor league for the NBA, designed to prepare players, coaches, officials, and staff for professional basketball. With 31 teams affiliated with the NBA franchise, the G League provides affordable, elite basketball in a family-friendly environment. The Sacramento Kings’ G League affiliate, the Stockton Kings, became part of the organization in 2016. In 2018, the City of Stockton executed a three-year lease with three additional one-year terms with the Sacramento Kings (Attachment A), which was approved by Resolution 2018-04-17-1401. Since then, the Kings have garnered significant attention for their performance, even making it to the playoffs in 2023 and 2024.
Present Situation
The Stockton Kings are committed to maintaining a strong presence in Stockton and have indicated their interest in continued community involvement. The new lease would enhance the range of entertainment options available to residents and contribute positively to the local economy through increased arena usage.
The term of the proposed lease includes competitive rental agreements, revenue sharing from food and beverage sales, and support for community engagement initiatives (Exhibit 1). Approving this lease will ensure that Stockton retains a high-quality basketball experience while enhancing the overall quality of life for its residents.
Notification
Per the City Charter, a “Notice of Intent to Lease Real Property Interest” will be published in The Record at least ten days prior to the execution of the Team Lease Agreement.
FINANCIAL SUMMARY
The Sacramento Kings will pay $14,000 per game for home games per season, with a 3% annual increase. The net revenue per game varies depending on attendance and concession sales and is part of the Venues fund operating budget, under the management of ASM. Approval of this lease will continue the anticipated revenue received from the Stockton Kings’ games. The FY2025-26 proposed budget will include any anticipated increase based on this new Tenant Agreement.
Attachment A - Original Lease