MALOOF’S SACRAMENTO HERO’S? Arena Deal (Would) Cost Taxpayers MILLIONS

Posted on April 18, 2012



What a difference a few days makes.   Just last week, we villainized  the Maloof‘s ,the Owners of the Sacramento Kings when they backed out of the Downtown Arena deal at the eleventh hour.  Last year they wanted out, Anaheim was calling, but at the NBA board of governors meeting last year, they were smacked down.   Ordered to stay in Sacramento another season.

Sacramento had to come up with workable plan for a new arena, failure meant , the Maloof’s were free to leave.

February 28,  the family says Sacramento is the place they want to be.  April 13, the NBA Commissioner David Stern says arena deal is dead.

The National Basketball Association has several wild fires, with Sacramento burning the longest.  They not only agreed to contribute to the building of an arena, they agreed to loan the Kings money and made a payment on the behalf of the Kings, they simply wanted the Sacramento fire extinguished, allowing them to move on to other fires.

The Maloof’s are now Sacramento’s public enemy #1 with a bullet.

Today, they insist, Sacramento is where they want to be.  Time will tell.

NBA blog coms: Scott Howard-Cooper writes: Publicly, the Kings say they want to stay in Sacramento and find a new solution, which is what they have to say and which is also partly true. They have to say it because every indication is that the team will call Power Balance Pavilion home for at least 2012-13, and just the uncertainty is bad enough as the business side tries to sell season-ticket packages for next season. But there is also some truth.

If the Maloofs truly wanted to jailbreak Sacramento, they could have been gone years ago, rather than swallowing annual exercises in patience. Only last season did they come close to leaving, when talks with Anaheim got serious. The Kings could have kept their head down the last nine months, put on a show they were interested in staying but rejected every proposal as unfair, and left this summer with Stern holding the door open.

That they pulled the plug this late and this shocking manner is another deep bruise to their image in Sacramento, but it cannot be overlooked that an ownership group in a financial struggle has invested serious money to gather information, design plans and do studies. They didn’t spend that for show.http://hangtime.blogs.nba.com/2012/04/13/sacramento-arena-deal-goes-bad/ 

There are two sides to everything, knives, coins and downtown Arenas.  The City of Sacramento‘s  Spin machine say’s they were completely taken off guard by the Maloof’s .

However, One local blog , ransackedmedia.com has copies of documents suggesting the Maloof’s began expressing concerns as early as March http://ransackedmedia.com/2012/04/16/just-when-did-the-city-know-the-maloofs-were-worried-about-the-arena-deal/

FUZZY NUMBERS  IN A PERFECT WORLD 

If a new arena is built is must be downtown!

The City of Sacramento owns land adjacent to Power Balance Pavilion,  in the fact, there is enough room to build two more  Arena’s without effecting parking  at the Natomas location.  A location preferred by most Sacramentians.

In the April 16 ,Sacramento Bee(Viewpoints: Decision to kill the arena plan will benefit Sacramento in the long run).Christopher Thornberg a consulting  hired by the Maloofs

Here are some  of the key point he made:

The current plan assumes that ticket revenues generated at the new arena will triple in four years from their current level. This is twice the rate of growth that was seen in ticket sales in the middle of last decade when the massive real estate bubble was in full swing and overheating all aspects of the local economy – including ticket salesat Power Balance Pavilion. Unless we are to assume that home prices will again rise to the $400,000 range in the near future, it is unlikely that such growth rates can be expected again, even with a new state-of-the-art arena.

There is no room for error in the city’s plan. There are no contingencies in place for cost overruns and delays, or in the event that the parking plan should fail to realize expected revenues.

Now that Gov. Jerry Brown and the courts have eliminated the redevelopment agency that was in charge of building the critical infrastructure in and around the railyard, the question remains, how will these expenditures really be funded?

The city contends that the anticipated general fund backfill would cover the balance of the needed revenues. This assumption is based on an economic impact study that estimates the new arena will bring more than twice as many people into the city as now attend events at Power Balance Pavilion. The study completely ignores the reduction in economic activity as this venerable structure is mothballed. In short, the city will not see the type of economic impact it is expecting. Financing the arena will have to come from higher taxes on local residents or directly out of other budget items.http://www.sacbee.com/2012/04/17/4419010/decision-to-kill-the-plan-will.html
Bloomberg Com( 4/16/12):  Sacramento is fresh victim of bad stadium deals : Steven Greenhut

Officials in Sacramento, California, are furious that the owners of the Kings basketball franchise, the Maloof family, said they are backing out of a handshake deal in February to invest $73 million in a project to build a new arena downtown.

This publicly funded stadium issue has raged in cities across the U.S., including Indianapolis, where the highly subsidized Lucas Oil Stadium was host to this year’s Super Bowl, andMinneapolis, as Minnesota legislators ponder a deal to build a new football stadium for the Vikings.

Economists have long understood that new arenas and sports stadiums rarely bring new economic activity into a city, but merely move entertainment money around the region.

“Economic growth takes place when a community’s resources — people, capital investments and natural resources like land — become more productive,” wrote the economists Roger Nolland Andrew Zimbalist in a still-quoted 1997 Brookings Institution study. “Building a stadium is good for the local economy only if a stadium is the most productive way to make capital investments and use its workers.”

MALOOF HERO’S?
Our position is and always been the city can not afford to build an arena during these economic times.  
There are many who believe the city has spent millions on consultants and staff hours to construct  a contract for a building  that may employee 200 full time workers.  Monies spent could have rehired much needed and police and fire personal and partially restored services to Sacramentians.     The argument of millions of taxpayer dollars  generated by a new arena is unfounded.
With the  retail activity in Natomas is a  linked to the  areas resent  population growth.here.
One simple question remains unanswered….. If having an arena would generate thousands of jobs, why  hasn’t  that happened in Natomas?  As most of the land surrounding the 20 year old building is vacant.
The Maloof’s withdrawal will save taxpayers millions.
 The Mayor Plans to press on with a new arena without a major tenant is beyond frightening and should be major consideration in his ballot box.
Sacramentians love their Kings, and would like them to stay.    Its clear to many, the Maloof’s have a cash flow problem, it is also clear, they could have said yes to the arena, the  NBA would have made it so…..  However,their actions, has saved many jobs and services for years to come.
The Maloof ‘s Hero’s?     A reluctant Yes……
Cityfella
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