do you think Sacramento will get a new arena built for the Kings? (Stockton: condo, university)

[CeJeH]

Sacramento railyard projects a tight squeeze - Arena Issue - The Sacramento Bee

[Mr. Ozo]

I'm cautiously optimistic. I think putting the new transit center to the west isn't the worse idea, especially with the proposed Street Car connection down 3rd street.

[wburg]

I'm less worried about the location than the money--now that the cockamamie parking scheme is pretty much out of the picture, the only way for the city to pay for this is with bonds. And Stockton is desperately trying to avoid going into bankruptcy due to their bond debt, as a result of their own arena project! Will they serve as a lesson to us, or as a vision of our future?

[CeJeH]

Right cuz stocktons arena and Our arena are Pretty much the same thing right?

[pistola916]

Originally Posted by wburg

I'm less worried about the location than the money--now that the cockamamie parking scheme is pretty much out of the picture, the only way for the city to pay for this is with bonds. And Stockton is desperately trying to avoid going into bankruptcy due to their bond debt, as a result of their own arena project! Will they serve as a lesson to us, or as a vision of our future?

Can't compare Stockton and Sacramento's arena situation. Stockton doesn't have a major sports tenant like the Sacramento Kings (they have minor league hockey but that doesn't really generate revenue. Second, Stockton's location is a disadvantage, acts/performers would much rather go to Sacramento and the Bay Area because they can get more cash. It's tough to book acts when they have to compete with the larger metros. Third, Stockton's population is 3x less than the Sacramento area. Fourth, Sacramento benefits from the affluent communities surrounding the city. There are a lot of wealthy folks in Sac metro than Stockton.

Sacramento will benefit from a new arena. It's time. Yes, i do agree, the NBA didn't give the city enough time to look over the details. I get that. The parking scenario definitely needs more clarification because it is risky. This arena is for the City of Sacramento and the Kings will act as tenants. Therefore, it is the city that should contribute more money than the team. Major cities don't let go of their sports teams. it is very rare and stupid. A lot of cities would kill to have the Kings regardless of how their economy is. They will take them because they see the benefits it can bring to the city. If Sacramento lets go of this team, they will regret it. Sacramento will never gain another professional franchise unless it is in the minor leagues.

Finally, don't you think it is better to get the arena done now while construction cost is low. If we wait another 10 years this arena would cost 600 million. And the city will have to cover everything. While the monetization of parking is risky and could jeopardize the city's future, at least Sacramento doesn't have to cover the whole cost of the project. $400 million suddenly sounds like a bargain.

[Malloric]

Wait the parking is off the table? When did that happen? Last I knew they were pushing ahead with and planning to back fill the $9 million gap with unicorn farts (arena profit sharing/sales tax dollars).

[Majin]

Parking is still the source of the city's 250 million contribution. Nothing has changed. I'm not sure where wburg is getting his info from.

[wburg]

Instead of leasing the parking for 50 years to a private operator, they're going to create a city-operated "parking authority" so they can borrow the money as a bond and pay it back with future parking revenue.

Its all in the term sheet:

http://sacramento.granicus.com/MetaViewer.php?meta_id=380674&view=&showpdf=1 (broken link)

Page 17 outlines the "Public Sector Model", after the previous page explains the problems with the "Concession Model" (leasing the parking to an operator.)

The other chunk of the city money will come from the sale of city-owned land, primarily a chunk in Natomas that can't be sold until the Army Corps of Engineers lifts the building moratorium in Natomas. So it probably can't be sold for quite a few years--the city will have to borrow that money too, initially, if they want to get started building the arena by next April.

The hitch is that using parking revenue to pay off the bond assumes the bond payment will be less than the money lost from parking, and even using pretty sweetly low rates, that just doesn't work--$230 million borrowed at 3% means a payment of $12 million a year. That money is also lost to the general fund, and the proposed replacement for the money to the general fund (a ticket surcharge for arena events) is only about one-third of the gap--the city general fund loses the difference.

There are some other hinky things in there--the city will be expected to build a private parking garage for the Kings and VIPs at the city's expense, city staff gets a private box of their own, the arena's location means we have to buy more land from Inland and could lose other funds already spent on the planned transit center (since the arena will go on top of the intermodal depot's planned location.)

This is all in the term sheet--it doesn't have any pretty renderings but has lots of interesting details.

[Majin]

Page 17 outlines the concession model, but where does it say they are pursing it? No news has come out saying they are not going forward with the original plan of taking bids on city parking.

[Chimérique]

Originally Posted by Majin

Page 17 outlines the concession model, but where does it say they are pursing it? No news has come out saying they are not going forward with the original plan of taking bids on city parking.

The parking/concession model is STILL IN.

Anti-Arena folks will spin this every which way they can to put doubt in peoples minds including maligning the leaders of the plan.

Excellent, credible, successful groups are involved:

AEG - the best entertainment/arena operator in the world. AEG says (with this ARENA) Sacramento will get ALL big popular shows and concerts all year long.

NBA - committed to making basketball competitive and profitable for small markets like Sacramento.

ICON - Successful Construction Company - They built the Pepsi Center and Sports Authority Stadium in Denver, Sprint Center in Kansas City, O2 in London.

David Taylor - the local guy construction company who has built some of the best and largest Sacramento projects to date.

The city will own all assets, and will receive share of profits from both AEG and the Maloofs.

Parking revenue is guaranteed to go up because the Arena will bring a valuable asset to downtown, which means profits for all involved including the City.