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SBD/March 25, 2013/FacilitiesPrint All
Sacramento officials on Saturday announced that they have “reached a deal” for a $447.7M arena at the Downtown Plaza that would house the NBA Kings, according to a front-page piece by Bizjak, Lillis & Kasler of the SACRAMENTO BEE. The agreement calls for a private development team of Penguins co-Owner Ron Burkle, 24 Hour Fitness co-Founder Mark Mastrov and Warriors Vice Chair Vivek Ranadivé to contribute $190M "to building the arena." The city would “own the arena; the private group would operate it and be responsible for its ongoing upkeep.” The city would be “guaranteed a minimum of $1 million in arena revenues annually, with bump-ups if arena revenues hit certain levels.” The deal, which sets a “September 2016 date for opening the new arena, also involves a 5 percent surcharge on tickets for two years at Sleep Train Arena, and continuing for the 35-year term of the lease at the new arena.” City officials said that they “also agreed to give the developers the 3,700 city-owned parking spots beneath Downtown Plaza.” The private partnership group “would shoulder the burden for getting the arena built and handling potential cost overruns." The news of the deal broke just after 3:00pm PT when Sacramento Mayor Kevin Johnson in a series of tweets noted that the deal “avoids new taxes, protects the city on an existing $70 million loan to the Kings and involves ‘no net impact on the general fund.’” City Manager John Shirey said that he will ask the city council “to approve the term sheet” tomorrow. But the “rushed nature of the new deal ... has caused concerns.” Council member Steve Hansen, who represents the downtown area, said, "I don't think there is sufficient time for the council and public to review this and vote on it Tuesday. I don't think that is practical" (SACRAMENTO BEE, 3/24).
DEAL DETAILS: Bizjak, Lillis & Kasler in a front-page piece write “only a handful of U.S. cities have done what Sacramento is contemplating” with the city's financing plan for an arena at Downtown Plaza, and the few have had “decidedly mixed results.” But Sacramento officials insist that they have “minimized the city's financial risk -- while laying the groundwork for a downtown renaissance that would spread well beyond the footprint of the proposed new arena.” The city said that it can raise $212M by "setting up a nonprofit corporation to borrow against future revenue generated by its downtown garages.” That would represent “the bulk of the city's $258 million contribution” to the new arena. City Treasurer Russ Fehr and other city officials said that they are “confident the garages, meters and parking tickets would generate more than enough cash -- roughly $32 million a year in gross revenue -- to make the debt payments.” About $20M in annual hotel tax revenue “would be used as a backstop to increase lenders' comfort levels.” Repaying the debt in many ways “would depend on people coming to Kings games and other events at the arena.” Assistant City Manager John Dangberg said that the financing model “assumes annual attendance of about 1.4 million a year.” City officials admitted that the number is “in line with what" the team used to draw when the Kings "were successful.” Fehr said that the “only significant financial risk would come in the early years, because the city is still paying about $4.7 million a year to repay debts on some of its garages.” Fehr said that to minimize the risk, the bonds “would be interest-only, with no principal payments, until much of that existing debt comes off the books in 2022” (SACRAMENTO BEE, 3/25). The BEE provided a link to the term sheet on the agreement (SACBEE.com, 3/23).
A CROWNING ACHIEVEMENT? USA TODAY’s Sam Amick noted between the “proposed purchase of the team, the investment in the downtown plaza arena and related real estate development around the site, Ranadivé, Mastrov and Burkle will be investing nearly a billion dollars.” NBA Commissioner David Stern recently said that Sacramento's first bid, which "previously did not include Ranadivé, fell well short of being competitive enough to be considered by the league's Board of Governors.” A source “would not disclose the size of the updated offer, but indicated that the addition of Ranadivé to the group was a sign that their pursuit should be taken even more seriously than before and that the offer would likely meet Stern's perceived expectations” (USATODAY.com, 3/23). CBSSPORTS.com’s Royce Young wrote the announcement “means that the biggest hurdle appears to have been jumped for Sacramento,” as the entire motive for selling or moving the team “has been because of the city's inability to reach a new arena deal” (CBSSPORTS.com, 3/23).
IN THE NICK OF TIME: A SACRAMENTO BEE editorial stated what “absolutely cannot happen” is for city council members to “be forced into a vote on a proposed pact without enough time for them and the public to study it closely.” That would “make a mockery of the transparent and deliberative process that is necessary for a decision of this magnitude.” Council members should get “several days at the very least to scrutinize the terms and to hear from their constituents.” The council “could schedule a special meeting” later this week to get more time, or could “vote at its already scheduled meeting on April 2.” While that may be “cutting it close, it would still be before the April 3 meeting of key NBA owners” (SACRAMENTO BEE, 3/23).
Dolphins CEO Mike Dee said the team is “willing and interested” in reimbursing Miami-Dade County for any costs related to a stadium referendum, according to Adam Beasley of the MIAMI HERALD. Dee said, “If the opportunity presents itself to reimburse the county for any and all costs for the special election, we are supportive and want to do that. It’s been our position since Day One.” Miami-Dade Mayor Carlos Gimenez on Thursday “asked the Florida Division of Elections for an opinion on whether the Dolphins could pay for the potential referendum, which the county elections department estimates would cost $3 million to $5 million.” During a meeting with Dee and Dolphins Owner Stephen Ross last week, Gimenez "asked them to agree to pay for the election if the state allows them to.” The date of the referendum “will likely be either May 7 or 14.” Gimenez said, “I don’t think the people of Miami-Dade should bear the cost” (MIAMI HERALD, 3/23). In Miami, Armando Salguero wrote season-ticket holders that “spent their money last season are not so far buying in as well this offseason despite the apparent upgrades in free agency and the hope that some of the club's upcoming 11 draft picks will be contributors to turning the Dolphins into winners for the first time since 2008.” Many want to “see results before they invest in tickets again” (MIAMIHERALD.com, 3/23). Salguero noted the team reportedly has “gotten less of an initial season-ticket sales bump this year than" in the '10 offseason, when the team made several bold moves. Although new customers are “signing up at a solid rate, the club’s ability to retain old season-ticket customers is way, way down.” And the team is “not really certain why that’s the case because, internally, the organization’s mood is upbeat and optimistic and expectant.” Everyone but “paying fans, it seems, is excited.” Perhaps the reason some of those fans “aren’t jumping on the ticket-renewal bandwagon is because they’ve been here and done that before” (MIAMI HERALD, 3/24).
APPLES TO ORANGES? In N.Y., Ken Belson examines the impact the Marlins’ tax payer-funded ballpark is having on the Dolphins’ attempt to get public funds for renovations to Sun Life Stadium. Gimenez said the Dolphins’ proposal has “a much more tangible public benefit.” But he added, “The Marlins’ stadium has created such an adverse appetite for another deal because the Marlins have really poisoned the well” (N.Y. TIMES, 3/25).
Charlotte City Council member James Mitchell on Saturday said that the North Carolina General Assembly "likely won’t grant Charlotte a tax increase to pay for renovations at Bank of America Stadium, but he’s still committed to finding" $144M for the NFL Panthers, according to Steve Harrison of the CHARLOTTE OBSERVER. Mitchell said that the city will "try again this week to persuade the legislature to increase the local prepared food and beverage tax by a half-cent to help the Panthers." He added that the city "won’t attempt to cover the $62.5 million requested from the state." Mitchell: "We won't go higher than $144 million." It is "unclear how the Panthers would respond if the city gives the team $144 million but the state doesn’t offer any money" (CHARLOTTE OBSERVER, 3/24). In Charlotte, Morrill & Harrison in a front-page piece noted of the 20 stadiums built or renovated since '97, "all but one have used public money." However, the Panthers' proposal is "difficult to compare to other recent deals." Their proposal is "similar to how much taxpayers will pay in Buffalo each year to anchor their team to the area" (CHARLOTTE OBSERVER, 3/24).
Cubs Owner the Ricketts family "set their sights on getting a bigger piece of Wrigleyville" shortly after buying the team in '09, according to Sachdev & Dardick of the CHICAGO TRIBUNE. That makes the rooftop owners, who own businesses overlooking Wrigley Field, "perplexed." The rooftop owners are arguing that they are "willing to negotiate a new deal with the family that would preserve their sightlines, but they think they are being treated as interlopers, not the long-term partners they have been since before the Rickettses arrived on the scene." If ballpark signs "obstruct their views and drive the rooftops out of business, several of the property owners, who have taken out loans in recent years to renovate their buildings, worry that they might not be able to afford their mortgage payments." They have "expressed concern that the Ricketts family would be positioned to buy their distressed properties, move some of the outfield signs and reopen the rooftop businesses." George Loukas, owner of three of the 16 rooftop clubs, said, "Based on everything I've seen from the Ricketts family during this recent process, they are not interested in a true partnership. In fact, it appears they would like to put the rooftops out of business." The two sides are "barely talking to each other" (CHICAGO TRIBUNE, 3/24). In Chicago, John McCarron in a special writes the takeaway for Cubs Chair Tom Ricketts is to "think of the entire Clark and Addison scene as the big draw, not just his quaint ballpark and wait-until-next-year team." This means he should "agree to affix his hoped-for advertising signs on the facades of those apartment buildings across Sheffield and Waveland avenues … not on top of the outfield back-wall, where they'd block views from the rooftops." By being "agreeable," Ricketts would be "owed -- big time -- not just by the rooftop owners but also by Ald. Tom Tunney and, more important, Mayor Rahm Emanuel" (CHICAGO TRIBUNE, 3/25).
ROSEMONT-COLORED GLASSES? In Chicago, Rick Morrissey in regard to the city of Rosemont, Ill.'s efforts to lure the Cubs to the suburb wrote the more you "think about it and the more your blood boils about the alderman and his leasable soul, the more you start to think that this isn’t so silly, that maybe the Cubs should take their scoreboard and go to a new home along lovely Interstate 294." To say such a thing is "heresy, of course." But there are two things that "can’t be denied: (a) Ninety-nine-year-old Wrigley is a monument to decay, which is why the Ricketts family wants to renovate it; and (b) the rooftop owners, the ticks burrowed under the Cubs’ skin, aren’t going anywhere." However, the situation "likely won't get as far as Rosemont." It is "hard to see" Emanuel "allowing an alderman to drive away the Cubs and all the money they bring into the city" (CHICAGO SUN-TIMES, 3/24). Also in Chicago, David Haugh wrote Ricketts "needs to seriously consider the plan" that "enthusiastic" Rosemont Mayor Brad Stephens detailed. Stephens "offers the Cubs an incentive-laden option free of government restrictions." Haugh: "How refreshing: a politician who seeks creative ways to give the Cubs a chance to grow their business in a way that benefits everybody" (CHICAGO TRIBUNE, 3/24). The TRIBUNE is running a poll asking whether the Cubs should "consider moving to Rosemont." At presstime, 76% of 3,216 respondents voted "Yes," while 24% voted "No" (CHICAGOTRIBUNE.com, 3/24).
Dodgers President & CEO Stan Kasten said that the "majority" of the $100M worth of renovations to Dodger Stadium will be "completed by Friday for the Freeway Series exhibition against the Angels," according to Dylan Hernandez of the L.A. TIMES. The Dodgers will "have a new clubhouse and there will be new amenities on every level of the stadium." Wi-Fi will be "upgraded throughout the stadium, but in June." Kasten said, "By then, we will have the most elaborate and most extensive Wi-Fi network anywhere in baseball. Pretty good for a 50-year-old stadium.” The Dodgers "expected to have the equivalent of 31,000 full-season ticket accounts by opening day" (LATIMES.com, 3/23). Kasten added that cell phone service and Wi-Fi access throughout the stadium are the "only elements" of the Dodgers' renovations that will "bleed into the season" (L.A. DAILY NEWS, 3/24).
RAVING ABOUT RAVINE: Dodgers investor Magic Johnson on Friday said that "nothing is happening" in regard to making Chavez Ravine the site to house a potential NFL franchise. He said, "Have we explored that? No. ... I think the first thing (the NFL) wants to see is what's going to happen with" AEG-owned Farmers Field. Johnson: "If (you’re asking) if we want football back in L.A., we hope it’s downtown. But if they ever approach us, I’m sure that (Dodger ownership) will deal with it at that time" (DAILYNEWS.com, 3/22). In L.A., Steve Dilbeck asked, "Why wouldn’t you explore an NFL stadium on your 300-plus-acre site? Wouldn’t that simply be good business? Wouldn’t they be lax as owners if they did not at least explore it?" Johnson said that the first thing the NFL "wants to do is resolve the downtown site." However, Dilbeck noted he is "leery of that too." If anything, AEG Chair Phil Anschutz' decision to pull AEG off the sale market and President & CEO Tim Leiweke's departure from the company "almost smacks of an ideal situation to return the NFL's focus to Dodger Stadium." Johnson and any other officials from Dodgers Owner Guggenheim Partners can "say anything, but it simply makes too much sense for the group not to explore bringing the NFL to Chavez Ravine" (LATIMES.com, 3/23).