Sacramento Approves Term Sheet For Downtown Arena; NBA Owners Set To Vote
The Sacramento City Council yesterday voted 7-2 in favor of a "nonbinding term sheet" for a $448M arena at Downtown Plaza, according to a front-page piece by Kasler, Lillis & Bizjak of the SACRAMENTO BEE. The city will contribute $258M, "most of it by borrowing against future revenue generated by downtown parking meters and garages." The city would borrow $212M "against future parking revenue," while much of the rest of the financing "would come from donating city land" worth $38M to the investor group consisting of Penguins co-Owner Ron Burkle, 24 Hour Fitness co-Founder Mark Mastrov, Warriors Vice Chair Vivek Ranadivé and Qualcomm Owner the Jacobs family. None of the investors "appeared at the council meeting." The arena proposal and the bid to buy the team itself will be presented in N.Y. on April 3 to "a select committee of NBA owners, who will weigh Sacramento's plan alongside a competing offer from Seattle." All NBA owners will then meet April 18 "to vote on whether the team should stay or go." Sacramento Mayor Kevin Johnson said that he "immediately texted the voting results to NBA Commissioner David Stern, but the commissioner was apparently asleep." The vote "brought a standing ovation and chants of 'Sacramento!' from the Kings fans" in attendance (SACRAMENTO BEE, 3/27). The Sacramento Bee's Ailene Voisin wrote on her Twitter feed, "Ron Burkle spokesman says all major investors will be in new york to address owners."
WHATCHA THINK? Sacramento City Council members said that they were "swayed by the potential for a grand revival of downtown." But the two council members who voted against the proposal, Kevin McCarty and Darrell Fong, said that the plan "amounted to an overly generous subsidy that could bring the city enormous misfortune if arena revenue doesn't pan out as projected." City Treasurer Russ Fehr said, "There's very minimal risk to the city's general fund" (SACRAMENTO BEE, 3/27). Council member Steve Hansen said, "I think this is the best investor group we've ever had come to the table. This is our opportunity. This is our moment. This could be the golden age of Sacramento that we are bringing." McCarty said he would support the deal if it was "a Seattle-like deal with a 40 percent city contribution with a return on our investment. Is the deal good enough? For me, it is not. The risks, I believe, outweigh the rewards" (SACRAMENTO BEE, 3/27).
BUILDING OUT: The AP's Tracie Cone notes the arena term sheet includes a 35-year "non-relocation agreement with two five-year extensions that would keep the Kings in the city until the last quarter of the century." Development partners "compared their vision of a downtown arena to other projects that have revitalized urban areas" such as Barclays Center and Staples Center. Barclays Center architect AECOM was "tapped to build" the new Kings arena. Development around the arena would "include 475,000 in office space, 300,000 in retail space, 250 hotel rooms and 600 housing units" (AP, 3/27).