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BTW, the Mermaid Bar and Pizza rock were funded with federal grant money. This is in fact no different than the city funding a portion of the stadium construction. Same concept. So far, it is working.
Mermaid Bar and Pizza Rock were funded with proceeds from the sale of the Sheraton Hotel. The arena is being funded by borrowing money (at fairly steep interest) from Goldman Sachs. So, actually, the funding is quite different, and neither involved federal grants. One was using money the city already had, the other is borrowing against projected future income, based on very rosy projections over the next 35 years.
Malloric is wrong for entirely different reasons: the delay of 700 K was due to the end of redevelopment and a lawsuit, and now that the lawsuit is resolved, it is moving forward.
Obviously, people see the economic balloon being squeezed downtown, and they're moving to take advantage of it. But there's a long-term difference between speculators making money shuffling properties and a long-term net gain for the city over the course of the next four decades. The jury is still out on that point and will be for a long time. The folks who built the K Street Mall and Downtown Plaza made money on those projects too, as they did on the resulting waves of commercial office building, even if the long-term result for the city was deemed a failure by those who didn't make money on the deal. But you don't build a vibrant downtown on commercial office projects--and an arena is, at best, a stop-gap, and, as I said, more a symptom of the changing interest in downtowns than a cause of net gain in the long term for downtown Sacramento.
Mermaid Bar and Pizza Rock were funded with proceeds from the sale of the Sheraton Hotel. The arena is being funded by borrowing money (at fairly steep interest) from Goldman Sachs. So, actually, the funding is quite different, and neither involved federal grants. One was using money the city already had, the other is borrowing against projected future income, based on very rosy projections over the next 35 years.
Malloric is wrong for entirely different reasons: the delay of 700 K was due to the end of redevelopment and a lawsuit, and now that the lawsuit is resolved, it is moving forward.
Obviously, people see the economic balloon being squeezed downtown, and they're moving to take advantage of it. But there's a long-term difference between speculators making money shuffling properties and a long-term net gain for the city over the course of the next four decades. The jury is still out on that point and will be for a long time. The folks who built the K Street Mall and Downtown Plaza made money on those projects too, as they did on the resulting waves of commercial office building, even if the long-term result for the city was deemed a failure by those who didn't make money on the deal. But you don't build a vibrant downtown on commercial office projects--and an arena is, at best, a stop-gap, and, as I said, more a symptom of the changing interest in downtowns than a cause of net gain in the long term for downtown Sacramento.
That's incorrect Burg. Almost half of the funding for the Mermaid Bar came from Federal Money i.e the Redevelopment Agency Sacramento. I knew this before I even read it because Kevin Johnson publicly stated it.
As to your second point, it's a bit of a chicken V egg question. So investors and businesses are now pouring money into downtown, and you're betting that they'll fail. If these ventures did fail, would that be because of the stadium? The economy? A freak tornado that decimates the entire downtown core? Who knows. Geez man, nothing is guaranteed over 4 decades. The point is, there is no denying that people who are much more intelligent and experienced than you or I when it comes to economics/investing are now pouring a ton of money into downtown. That was the hope in building this stadium downtown. I am not sure how or why anyone could ask for anything more than that.
Redevelopment funds aren't federal money--generally, they are local bonds issued against the future value of the land. But in the case of Pizza Rock et al, the money came from Taylor's purchase of the Sheraton Grand, another redevelopment project, half of which was earmarked at the time of purchase for use in another future redevelopment project involving Taylor. These funds were called the "MOPA" fund, and a small portion that was left over is being used to fund a little bit of arena construction. The bulk of the city's contribution is a large loan from Goldman Sachs. To repeat, neither involves federal money. Oh yeah, thanks for the link above--it cites the following document by Downtown Sacramento Partnership:
The City's investment is derived from proceeds of the Sheraton sale in 2008. Under the sale terms, half of the transaction proceeds would be available for DSTI/CIM projects in the JKL Corridor with City approval.
Not sure how acknowledging that something might fail is somehow betting that they will fail. All I'm saying is exactly what you just said--nothing is guaranteed over 4 decades--but the arena cheerleader brigade is saying that it IS guaranteed, based on the predictable results of an economic upturn spilling from the Bay Area into Sacramento, and the predictable localized economic effects of a large public-funded project. It's a bit like assuming that your team is a shoo-in to win a championship based on a few early-season wins, disregarding even the possibility that the winning streak might end. Awareness of risk isn't a liability--it's the main way to avoid risk and move toward success.
In fact, I'm betting on the long-term success of downtown, over the course of decades--if we play our cards right and pursue an aggressive policy of repopulating the central business district. Entertainment and offices are part of that picture, but it starts with housing and residents, in a part of the city where people already want to live but there is insufficient supply. But if you think that people more intelligent and experienced than you or I when it comes to economics/investing are immune to mistakes, you must have fallen into a coma in about 2007 and just come out of it last year.
Malloric is wrong for entirely different reasons: the delay of 700 K was due to the end of redevelopment and a lawsuit, and now that the lawsuit is resolved, it is moving forward.
No, you just misunderstood. Had the Ed Hardy Pizza building done what Redevelopment Math said it would do, the 700 Welfare Street location would have had so much demand it would have gone ahead anyway without the taxpayer funding it. It didn't because there's no demand for much of anything at 700 Welfare Street.
The fact is that if there was demand for development 700 Welfare Street would have been built. I'm not saying they wouldn't have still sued. They would have. The City illegally broke a contract it tried to rush through before Redevelopment was shut down. They got sloppy and it bit them in the behind to the tune of millions of dollars. Part of the legal process, however, is mitigation of damages. D&S and CFY had a duty once the City backed out of the contract to mitigate damages as best they could. The fact that the next best alternative absent Development funding was to do nothing with the site speaks for itself. The best outcome that D&S and CFY was left to due to the City's malfeasance was to let the site sit empty while everyone sued everyone. Last I heard in October, they were still trying to bridge the $7 million shortfall gap in the project. The City approved covering $2.1 million with the rest to come from the developer. So now it's just a waiting game. The welfare housing money still needs to be secured which is the last bureaucratic hurdle left.
Redevelopment funds aren't federal money--generally, they are local bonds issued against the future value of the land. But in the case of Pizza Rock et al, the money came from Taylor's purchase of the Sheraton Grand, another redevelopment project, half of which was earmarked at the time of purchase for use in another future redevelopment project involving Taylor. These funds were called the "MOPA" fund, and a small portion that was left over is being used to fund a little bit of arena construction. The bulk of the city's contribution is a large loan from Goldman Sachs. To repeat, neither involves federal money. Oh yeah, thanks for the link above--it cites the following document by Downtown Sacramento Partnership:
Not sure how acknowledging that something might fail is somehow betting that they will fail. All I'm saying is exactly what you just said--nothing is guaranteed over 4 decades--but the arena cheerleader brigade is saying that it IS guaranteed, based on the predictable results of an economic upturn spilling from the Bay Area into Sacramento, and the predictable localized economic effects of a large public-funded project. It's a bit like assuming that your team is a shoo-in to win a championship based on a few early-season wins, disregarding even the possibility that the winning streak might end. Awareness of risk isn't a liability--it's the main way to avoid risk and move toward success.
In fact, I'm betting on the long-term success of downtown, over the course of decades--if we play our cards right and pursue an aggressive policy of repopulating the central business district. Entertainment and offices are part of that picture, but it starts with housing and residents, in a part of the city where people already want to live but there is insufficient supply. But if you think that people more intelligent and experienced than you or I when it comes to economics/investing are immune to mistakes, you must have fallen into a coma in about 2007 and just come out of it last year.
I stand corrected on the Dive Bar. While it was under construction, I walked by and spoke with someone who represented himself as a principle owner of the bar and claimed that the money came from federal grants. LOL maybe he was some random employee that BS'd me. Either way, you are right.
That said - I am not sure what a 4 decade period has to do with the success of the stadium or downtown. I mean, you are going a little off topic here. You bring up 2007, and that is a perfect example of why I say that. No one could have predicted the housing crash or what the local (or world economy) will do over 4 decades. Wars, natural disasters, laws, dwindling natural resources and an endless number of other factors can effect the economy. Nobody is claiming that this stadium is going to solve every problem or cure world hunger. All we've said is that (A) it will not "flop", and (B) it will stimulate the downtown economy. I think both are pretty safe assumptions at this point.
Beyond that, and possibly more importantly, this stadium gives the local community something to be proud of. In my opinion, for that reason alone it is worth the incremental increase that we will pay in parking, rent, etc. This city is too big at this point to go without a venue to accommodate the demands of 500,000+ people. Political events, concerts, sporting events etc will all come through here now and they will be accessible for the majority of the population. I believe the NCAA has already agreed to host a round of the NCAA March Madness Tournament in 2016? Not sure the exact date, but I think that is awesome. I think it's great that cameras will pan on our city during any number of nationally televised events now, and I am all but certain that is a big impetus for Kaiser moving its headquarters right next to the stadium. It's just a good thing for our city on so many levels.
No, you just misunderstood. Had the Ed Hardy Pizza building done what Redevelopment Math said it would do, the 700 Welfare Street location would have had so much demand it would have gone ahead anyway without the taxpayer funding it. It didn't because there's no demand for much of anything at 700 Welfare Street.
The fact is that if there was demand for development 700 Welfare Street would have been built. I'm not saying they wouldn't have still sued. They would have. The City illegally broke a contract it tried to rush through before Redevelopment was shut down. They got sloppy and it bit them in the behind to the tune of millions of dollars. Part of the legal process, however, is mitigation of damages. D&S and CFY had a duty once the City backed out of the contract to mitigate damages as best they could. The fact that the next best alternative absent Development funding was to do nothing with the site speaks for itself. The best outcome that D&S and CFY was left to due to the City's malfeasance was to let the site sit empty while everyone sued everyone. Last I heard in October, they were still trying to bridge the $7 million shortfall gap in the project. The City approved covering $2.1 million with the rest to come from the developer. So now it's just a waiting game. The welfare housing money still needs to be secured which is the last bureaucratic hurdle left.
There is a difference between planting a bar or a mall somewhere and hoping people will show up and building a stadium where you can actually mathematically predict the number of people that will show up for any number of planned events with probably 90%+ certainty. I am not trying to be sarcastic, but I honestly don't understand why it is so difficult for some people to understand the difference between the two.
A 4 decade period has a lot to do with the success of the stadium, because that is the period over which the city will be paying off that loan to Goldman Sachs.
Kaiser probably would still have bought that office building, they know the way cities are going and the Morse facility isn't getting any newer, it just probably would have sold for $30 million instead of $40 million. The balloon has been squeezed, time to start building housing around the balloon before it starts deflating!
A 4 decade period has a lot to do with the success of the stadium, because that is the period over which the city will be paying off that loan to Goldman Sachs.
Kaiser probably would still have bought that office building, they know the way cities are going and the Morse facility isn't getting any newer, it just probably would have sold for $30 million instead of $40 million. The balloon has been squeezed, time to start building housing around the balloon before it starts deflating!
FN A man, you guys are going to use this excuse for every single project moving forward, aren't you lol. You are a real intelligent guy, but it's ok to give a little or admit you are wrong. That is actually the mark of an intelligent person. I'll take the article Majin posted at face value and assume the stadium impacted Kaiser's decision until some factual evidence proves otherwise.
And isn't the stadium paid for primarily through parking revenue? Maybe the idea was that more foot traffic through the area would indirectly increase that revenue stream, but the stadium isn't being paid for by the private investment in downtown. That was just the hope behind it. And obviously, it is already working.
I don't understand how Majin posts an article and even quotes it at the beginning of the thread and several of you are denying the ties to the stadium. I have no idea what that's about lol.
Hoped some of you watched KCRA 3 news tonight. Per Michael Alt in response to downtown developments, including two proposed residential towers: "The stadium has changed EVERYTHING".
There is a difference between planting a bar or a mall somewhere and hoping people will show up and building a stadium where you can actually mathematically predict the number of people that will show up for any number of planned events with probably 90%+ certainty. I am not trying to be sarcastic, but I honestly don't understand why it is so difficult for some people to understand the difference between the two.
Irrelevant
The City will never come close to recovering its "investment" based on the 5% ticket sales surcharge.
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