Cal Expo officials on Friday strongly rejected a proposal to move the State Fair to the site of Arco Arena in North Natomas, which hurts the Kings' chances of getting an arena built.
Arena proponents, however, say they haven't given up.
"Is this deal dead? Absolutely not. But we have an uphill battle," said local developer David Taylor, a partner with developer Gerry Kamilos in what has been called the Sacramento Convergence proposal.
Sacramento Mayor Kevin Johnson said through a spokesman that the city would continue to work on getting a new arena built.