Don’t believe the hype

Picture it: A downtown arena for the Kings.

In place of the dilapidated rail yard along the American River stands a shining new stadium complex, complete with state-of-the-art transit center. People walk from downtown high-rises or take the light rail in from the suburbs to a vibrant new entertainment district bustling with restaurants, nightclubs, shops and services. The crowds spend money, the money creates jobs, and before you know it downtown has undergone a remarkable revitalization. Sounds pretty good, doesn’t it? In fact, it’s literally too good to be true.

Over the coming weeks, you’re going to hear a lot of talk about a downtown arena. A $150,000 feasibility study is set to be released, and you’re going to hear people tell you that a downtown home for the Kings is a worthwhile investment of your tax dollars because it will spur redevelopment of the city’s urban core. Committees will be formed. Petitions will be signed. One plan or another may even wind up on the ballot.

But don’t believe the hype. A downtown arena should not—and clearly will not—be built unless the Kings build it themselves using private money. And that, sports fans, just ain’t going to happen.

Why not? Let’s break it down.

First of all, the cost would be enormous—at least $300 million for the arena building alone. Given the Kings’ immense popularity, it’s a safe bet that no local politician is going to come out against the plan. But it’s equally safe to say no one is going to be willing to propose a tax increase or bond measure big enough to pay for it, either.

Nor should they. It’s now a matter of record that most cities that financed new arenas in the ’70s and ’80s amid promises of economic revitalization wound up with enormous debts and far fewer benefits than expected. That’s because, unlike many businesses, sports franchises do not enlarge the economic pie when they increase profits. They merely take a bigger slice of the local population’s entertainment budget, and money that might have been spent on movies or restaurants goes for a game ticket and a hot dog. New arenas don’t create jobs or tax revenues; they siphon them from nearby businesses. Rather than an economic stimulus, they are merely public subsidies of private businesses, and with so many other pressing needs, Sacramento can’t afford to subsidize the Kings.

But what about the Kings? Why wouldn’t they pay for it?

Because they don’t need to. The Kings already sell out every game. The team might be able to eke a few more dollars out of the local market but the ownership isn’t going to invest $300 million in the hope of pulling in an extra couple of million a year, and city officials know it.

All of which means that this project has less chance of going through than a Shaquille O’Neal free throw. City leaders should publish the study, admit it’s a pipe dream, and move on to promoting a more feasible plan for downtown.