Thinking big for dummies: A guide to the coming Kings arena-pocalypse
Will city council approve a new home for the Kings?
Ever since Chris Lehane, executive director of arena-booster organization Think Big Sacramento, declared that a new Sacramento Kings arena downtown would be the biggest thing for Sacramento since the transcontinental railroad, we’ve suspected that the hype around a sports facility might be getting a bit overblown.
Still, there’s a big vote by the city council coming on Tuesday, March 6—maybe—and details of a possible agreement between the city, the Maloof family and the NBA are finally becoming public—at the last-possible moment before the vote. It’s tough not to get caught up. Are you ready for some arena-pocalypse?
We figure the city council will vote yes, narrowly, and approve the general framework of the agreement—tenatively putting $200 million to $250 million in public money toward the deal.
That doesn’t mean it’s a good deal. And whatever hype you hear in the next few days, the inevitable vote is not binding, and there’s still some time to wriggle out if it gets dicey. That’s a good thing, given the prospects of having a rough arena-financing plan in place or possibly lose the team to other suitors such as Anaheim or even Seattle. Here a few things to look for—when the much anticipated “term sheet” hits the streets on March 1.
Who pays what?
Up to now, the speculation has been that the city would be on the hook for $200 million toward the new arena. More worthless speculation, arena operator AEG is willing to kick in $50 million. And of course we all want to know just how little the Maloof family, who own the Kings, will be asked to pay. Rumor is about $85 million—$60 million in cash and $25 million in property they own near the current Arco Arena site. That doesn’t add up to $387 million, the arena’s estimated price tag. And it seems as likely as not that number is pretty low.
Oh yeah, what’s the arena really going to cost?
That $387 million price tag doesn’t take into account the “premium parking structure” that’s been suggested by Think Big Sacramento. It doesn’t include any of costs of new infrastructure needed for a new arena—certainly up into the tens of millions of dollars, some think as much as $100 million. It sure would be good for the city council to have a firm grasp of some of these additional costs—and where that money will come from—before voting yes. It will also be good to know who pays for cost overruns.
What about the Kings loan?
It just bugs us that the $85 million number from the Maloofs is so close to what they already owe the city for the last Kings bailout. We know that Assistant City Manager John Dangberg and other city officials have repeatedly said that the 1997 loan is not being forgiven. Still, it’ll be nice to know just when and how that’s going to be paid off.
How do we get our parking money back?
The council is expected to go forward with a “request for proposals” to find a company to privatize the city’s public-parking system, and take about $9 million in parking revenue each year (and more as rates go up and demand increases) for the next 20 to 50 years. In exchange, the company will make a big cash payment upfront to build an arena.
Several council members have said that kind of hit to the city’s general fund is not acceptable. And the term sheet due out this week is expected to explain in some detail just that money will be paid back. Ticket surcharges are one possibility. But what if ticket sales lag? Sales tax generated at the new arena could be used, but is that really new money to the city? Does the city’s general fund get tapped if those revenue streams fall short?
Is there a better use for that public money?
If the city does privatize its parking system, there are any number of worthy investments that money might be used for. A couple of council members will probably raise the question on Tuesday. But don’t expect there to be any real debate on it.
A tale of two deals
Sacramento and Seattle aren’t a world apart. Just 9 degrees latitude, in fact. So why, then, are the city’s two proposed NBA arena deals night and day—and who’s denizens are getting the proverbial screw job?
Public vs. private money
Mayor Kevin Johnson’s asking the city to pony up more than $203 million in parking assets, this in addition to $40 million in downtown rail-yard acreage. King County in Washington simply must back $200 million in bonds. Advantage Seattle.
What’s the split?
Seattle will cover 40 percent of the deal. Here, the original idea was a 30-30-30 three-way divvy—but now, apparently, Sacramento has to cover more than half the costs. Advantage Seattle.
On the clock
Seattle seemingly busted out a plan in a week. Sacramento? Going on a year. Advantage Seattle.
Roseville vs. Tacoma
In the beginning, there was a lotta talk about “regionalism” and the suburbs kicking on the arena deal. In the end? Sorry, Sacramento. Meanwhile, the King County, Wash.—not just Seattle—is backing bonds for the proposal up north. Advantage Seattle.
Handicap the vote
There’s a Twitter hash tag making the rounds—“#5votes”—that references the handful of yeas needed to move the arena deal forward. But what’s really the likelihood of getting five nods? In true Maloof fashion, SN&R places its bets:
Angelique Ashby YES
Ashby gives project the nod despite the prospect of an Arco ghost ship and collateral damage to Natomas.
Sandy Sheedy NO
You’ve read this paper before, right?
Steve Cohn LEANING YES
Cohn, who’ll take over as councilman of the land of the proposed arena site, has said he won’t vote for a bad deal. Chances are he’ll think this deal is just good enough.
Rob Fong YES
Fong is the original arena hawk. He’ll likely vote “Hell yes.”
Jay Schenirer LEANING YES
Back in 2010 when Schenirer was running for city council, he opposed the “Convergence” arena proposal because it meant a big donation of city land in Natomas. “I don’t see how we can give away a resource that’s worth at least $30 million,” he told SN&R at the time. Today? We figure he sticks with the “power trio” he’s formed with Mayor Kevin Johnson and Ashby.
Darrell Fong NO
Still the most fiscally conservative member of the council, and still a no.
Kevin McCarty NO
Look for McCarty to ask about other possible uses of parking money, and for city staff to quickly change the subject.
Bonnie Pannell ???
Pannell has made supportive noises for an arena in the past. But then, a couple of weeks ago, she voted with Sheedy, Fong, and McCarty to put any public subsidy to voters—which boosters say would have killed the project. It was a confusing vote to us, and maybe to her as well.
Mayor Kevin Johnson YES
Short of some kind of Manchurian Candidate moment, it’s a resounding no-brainer.